Prologue

Garik: Doc, what is economics?

Doc: What kind of economy are you interested in: the one that currently exists or the ideal version of it? These are quite different areas, mostly mutually exclusive.

Garik: What should it ideally be like.

Doc: So it should be fair?

Garik: Exactly! What should we strive for if not justice?!

Doc: A brain twist won't ensue? Economics is a complex subject, meant for exceptional minds.

Garik: Explain it clearly enough for a fool to understand. I can manage the details later.

Author's warning: Doc isn't joking, economics is complex, and the material below is extensive. Think thrice before you decide to get acquainted with the principles of fair economics.

Exchange

Doc: Okay, I'll try, but it's on you. Let's begin. Is it fair for everyone to receive according to their labor?

Garik: I'm sure it's fair.

Doc: So, receiving according to labor is a necessary condition for a fair economy?

Garik: Yes.

Doc: How is receiving according to labor realized in economics?

Garik: In the form of salary.

Doc: So, in the form of receiving money?

Garik: Yes.

Doc: For what do you receive money?

Garik: For creating things necessary for life.

Doc: Let's call such things goods for brevity.

Garik: Agreed.

Doc: What do you do with the money?

Garik: I buy goods with it.

Doc: You earn money for producing one type of goods and spend money to acquire another type. Can we say that you're exchanging goods with other producers?

Garik: Yes.

Doc: And the essence of economics lies in this exchange?

Garik: It seems so.

Doc: Should the exchange of goods be proportional?

Garik: What do you mean by proportional exchange?

Doc: Each good contains a certain amount of labor. Goods should exchange according to this proportion.

Garik: I understand.

Doc: We have two conditions for fair exchange of goods. First: every producer should receive according to their labor. Second: the exchange of goods should be proportional. Do you agree with me?

Garik: Absolutely.

Doc: By the way, have you heard anything about profit?

Garik: Of course! The boss has driven me crazy about it.

Doc: In that case, answer how profit can be possible while adhering to the two conditions we've accepted?

Garik: Hmm... I haven't thought about it.

Doc: Well, think about it.

Garik: If everyone receives according to their labor and the exchange is proportional, it turns out that profit is impossible. What you earned, you spent. If someone made a profit, then someone else made a loss. The former is a robber, and the latter is the robbed.

Doc: It's not me, it's you who said that.

Garik: Strange.

Doc: What is strange?

Garik: But the entire modern economy is built on the concept of profit.

Doc: This is not economics, it's anti-economics. Let's forget about it, especially profit. Profit is an anti-scientific concept that leads us away from a fair economy.

Garik: Alright.

Money

Doc: Let’s continue our enlightening conversation. Answer me this question, Garik. If the essence of the economy is the exchange of goods, why is there a need for monetary circulation? Why couldn't we just exchange goods?

Garik: It's more convenient.

Doc: What exactly makes it convenient?

Garik: Because you can buy anything with money. You don’t need to look for a producer who is interested in your goods and vice versa.

Doc: I completely agree with you. Now tell me, where should money come from in a fair economy?

Garik: The state will print them?

Doc: If the state prints and distributes them to its employees, they will buy goods with freshly printed money without producing anything. This will violate one of the basic rules: everyone receives according to their labor.

Garik: But the employees are working!

Doc: Whether they are working or not is something we still need to determine. Imagine there are no employees, and there is no state. Where will the money come from?

Garik: I don’t know.

Doc: Either some commodity suitable for circulation, like gold, will have to be used as money. But that’s an outdated option. Or—progressively—the money should be printed by the producers themselves.

Garik: The producers themselves??? How?

Doc: When you exchange goods with someone, do you need money?

Garik: No, you don’t.

Doc: But if you need some product, and the producer doesn’t need your goods?

Garik: I will have to buy that product.

Doc: Buy, meaning to acquire it for money?

Garik: Yes.

Doc: For that, you should have money on hand?

Garik: Well, of course.

Doc: And to get the money in hand, you need to sell your goods to someone?

Garik: Exactly.

Doc: And where do you think that person will get the money if they have the same problems as you?

Garik: Indeed. It turns out to be a deadlock situation.

Doc: Why is it a stalemate? You can transfer your goods on credit, for which you receive a receipt. We will agree to consider this receipt as money.

Garik: Did I understand correctly that in a fair economy, money only arises when goods are transferred on credit?

Doc: Yes, you understood correctly. We will call this type of credit commodity credit.

Garik: Alright.

Doc: Can you tell me the volume of money in the economic system?

Garik: The amount of commodity credit issued is the volume.

Doc: The answer is incorrect. The issued receipt implies two sides to the transaction: the recipient and the payer. One has a plus, the other has a minus. Thus, the monetary system assumes not only positive but also negative amounts in circulation. Positive amounts – receipts in hand, negative amounts – issued receipts.

Garik: I think I get it.

Doc: So tell me, what is the volume of money in a closed economic system?

Garik: If we consider both positive and negative amounts, it is always zero. After all, in commodity credit, one side receives exactly as much as the other side gives away.

Doc: Well done!

Garik: This does not resemble modern monetary circulation. It turns out that half of humanity will have negative amounts in their accounts.

Doc: That's right, but that's not all the differences between the monetary circulation of modern anti-economics and a fair economy.

Garik: What is another difference?

Doc: If money is essentially a receipt for receiving commodity credit, then money should be annulled at the moment of its return. The creditor, upon receiving what is due from the debtor, tears the receipt. The receipt simply ceases to exist.

Garik: But if I understood correctly, you intend to use receipts as money!

Doc: I do, and so what?

Garik: Then they cannot be destroyed; receipts must remain in circulation.

Doc: Not at all. We have long been living in a world with cashless monetary circulation. So what can we say about the ideal economic world being discussed?! Obviously, there will be no receipts: there will be personal accounts with positive or negative balances.

Garik: Will positive amounts be counted as negative?

Doc: Exactly.

Garik: And the total amount of money in circulation will constantly change?

Doc: It will depend on the size of commodity credit in the system, as it should.

Garik: And the total volume of such money in the system will always be zero?

Doc: Yes.

Garik: I understand what you're talking about.

Labor

Doc: I am happy for you and for myself. However, let's continue our brief excursion into fair economics. I recall we agreed that everyone should receive according to their labor.

Garik: Yes.

Doc: But we forgot to establish what labor is.

Garik: What do you mean? Actions involved in the production of goods.

Doc: How can we understand what actions a person is performing – whether they are producing goods or doing something else?

Garik: Well, the person themselves should say that.

Doc: What if they lie or are mistaken?

Garik: Yes, you're right. We can only establish what actions a person is taking based on their output. If the output is a product, then the person labored; if no product is produced, then they did not labor.

Doc: How do we know what someone has produced? When does the fact of the product's existence become evident to the system?

Garik: At the moment of the exchange of goods.

Doc: That's correct, but it's not that simple. Suppose the product has passed to a new owner but is defective. Is it fair that the manufacturer receives a defective product in exchange for their quality product?

Garik: No, that's unfair.

Doc: What should you do?

Garik: We need to check that the product is not defective.

Doc: How can we verify this?

Garik: Conduct an examination.

Doc: What if the defect is hidden and can only be revealed through the use of the product?

Garik: Then the product needs to be used as intended to see if it's defective or of good quality.

Doc: So, it turns out that checking the quality of the product – essentially whether the product is a good one – is only possible at the moment of its use? If the use is successful, the product is of good quality; otherwise, it's defective.

Garik: Yes.

Doc: And determining whether a person labored is only possible after the product made by that person has been used?

Garik: It appears so.

Doc: And do you know what logically follows from this?

Garik: What?

Doc: That no exchange of goods is possible.

Garik: But why???

Doc: Because the exchange of goods occurs before the use of the goods. At the moment of exchange, it is unknown whether the exchanged goods are actually goods or merely defective products. From this perspective, any exchange is invalid.

Garik: But exchanges do happen!

Doc: No, they do not happen. In reality, what is called an exchange is actually a reciprocal commodity credit.

Garik: When two manufacturers lend each other goods?

Doc: Exactly. They provide goods on credit and expect those goods to be used. If the goods are successfully used by both parties, the exchange has occurred. If any of the goods were not used due to a defect, what kind of equivalent exchange are we talking about?! Of course, I'm not referring to the legal aspects of the transaction in the current anti-economy, but to the factual aspects of the transaction in a just economy.

Garik: I understand. There is no reimbursement for defective products.

Doc: That's the essence of it. Therefore, calculations through monetary transactions should not occur at the moment of exchange — which, as we established, doesn't exist — but as goods are issued on credit and subsequently redeemed.

Garik: Wow!

Doc: Are you surprised by something?

Garik: The consumer takes the product from the producer but is obligated to pay for it later — at the time of using the product.

Doc: Doesn't the consumer pay for the labor performed by the producer?

Garik: For the labor.

Doc: And how we established whether the producer worked is determined at the moment of using the product. What's surprising about the moment of payment? When it becomes clear that the producer worked, he should receive — must receive — compensation for his labor.

Market

Garik: Something doesn’t seem right. The consumer may accept the product but intentionally not use it, for instance out of spite.

Doc: It is possible.

Garik: The product is accepted, but the consumer owes nothing to the producer since the product was not used by them.

Doc: Why would the consumer do that?

Garik: Out of spite, as I said. Let's say the consumer has negative feelings towards the producer and wants to harm them.

Doc: This will backfire on the unethical consumer.

Garik: How so?

Doc: By providing goods on credit, producers expect that the goods will be used?

Garik: Yes. Then the actions of the producers will be recognized as labor, and the producers will receive compensation.

Doc: In that case, the consumer risks no longer receiving goods on credit. Producers will be scared that the consumer won’t use their goods, so they will pass the goods on to someone else. The unethical consumer will face problems, potentially leading to starvation. As you can see, in a just economy, it's not just about having money, but also about reputation.

Garik: Now I understand why.

Doc: Consider who manufacturers would prefer to pass their goods to, and much will become clearer. Put yourself in the manufacturer's shoes.

Garik: Let me try. So, I am the manufacturer; I've produced a product.

Doc: Who will you pass the product to for consumption?

Garik: So, I'm not selling the product as I do now, but passing it for consumption on credit?

Doc: Yes. It's not the consumer who chooses the product for which they have enough money, but the manufacturer who selects the consumer from whom they believe they will receive compensation more quickly.

Garik: How do I find out which consumers want to receive my product?

Doc: A consumer wanting to receive the product makes a request. You either allow them to take the product or deny them.

Garik: What if there are many products? That will take time!

Doc: Garik, don't be childish. It's obvious that an algorithm is needed to distinguish between consumers who meet your conditions and those who do not. The consumer sees in the system which products they are allowed to obtain and which ones they aren't.

Garik: The basic principle is clear.

Doc: So, to which consumer will you pass the product?

Garik: Probably to the one with a positive balance in their account. That way, I'll receive compensation more quickly.

Doc: What if a consumer with a negative balance makes a request?

Garik: Indeed. So, I will have to set a minimum positive balance or a maximum negative balance at which the product can be passed for consumption.

Doc: Well done! One question remains unresolved. Some consumers use your product immediately after receiving it, while others do not. Some may want to take a product, so to speak, for reserve. How do we handle such reserve-seeking consumers?

Garik: You'll have to decide whether to release the product or not in each specific case. Certain conditions need to be added to the product release algorithm.

Doc: And according to your algorithm, who will not be allowed to receive the product even with a satisfactory amount of money in their account?

Garik: Those who do not use the product within acceptable time frames.

Doc: Do you realize what your words mean?

Garik: What?

Doc: In a fair economy, obtaining goods beyond necessary personal consumption is impossible.

Garik: I have no objections to that.

Doc: Note that the market in a fair economy regulates everything — truly regulates, unlike modern anti-economics. Anti-economics implies excessive trading and arbitrary use of money, thereby fostering the worst qualities in a person...

Garik: Wait, what do you mean by arbitrary use of money?

Doc: The ability to spend it not for personal consumption.

Garik: Are you saying that in a fair economy, you cannot spend money in your account at your discretion?

Doc: Only for personal consumption; otherwise, it contradicts the principle of 'to each according to their labor.'

Garik: So I won't be able to transfer some amount to a female acquaintance?

Doc: You won't be able to because it would contradict the principle of 'to each according to their labor.'

Garik: Oh no!

Time

Doc: Here we are, Garik, discussing the economic principle of 'to each according to their labor,' while forgetting to establish how labor is measured. When exchanging, one must know the amount of labor embedded in each good — the cost of the good.

Garik: We truly forgot.

Doc: So how is labor measured?

Garik: Isn't it in money?

Doc: What nonsense are you talking about? Money is a quantitative expression of commodity credit, which must be measured in something.

Garik: In working time?

Doc: Bingo!

Garik: And also in qualifications.

Doc: Garik, you're disappointing me. A measure of labor must be an objective quantity, and qualifications are not that.

Garik: Are you claiming that labor is measured solely in time?

Doc: Yes, I am. The only conceivable objective measure of labor is time.

Garik: But that means an hour of working time for a skilled and unskilled worker is equal!

Doc: And what's so terrible about that?

Garik: If everyone is paid the same for any work, there will be no incentive to improve qualifications.

Doc: Don't say that. There are many unskilled jobs, but few skilled ones. Increasing qualifications is often a way to gain employment. Without specialists of the required qualification, no goods will be produced.

Garik: But isn't it unfair that a highly skilled worker earns the same for their labor as a low-skilled worker?

Doc: Tell me, can qualifications be objectively determined with a measuring device in hand?

Garik: No.

Doc: Are you saying that any definition of skill level is subjective, in other words arbitrary?

Garik: Yes.

Doc: You have a strange notion of justice. Do you think it's fair to set salary based on a factor that is established arbitrarily by someone's capricious decision?

Garik: But... then... I can't understand anything. If you only pay for working time, all workers, regardless of productivity, will receive equal compensation. A workaholic produced 10 units of goods in a ten-hour shift, while a slacker made only 1 unit. Shouldn't they be paid equally for the time worked?

Doc: Of course...

Garik: What???

Doc: ...assuming that the goods will be delivered to the consumer and used, which is far from a fact.

Garik: What do you mean?

Doc: We seem to have agreed: in a fair economy, the producer should receive compensation after the product is used for its intended purpose?

Garik: That's true.

Doc: What will be the value of the goods produced by the workaholic and the slacker?

Garik: The workaholic has 10 units of goods after ten hours, meaning the cost of one unit is 1 hour. Accordingly, the slacker's one unit costs 10 hours.

Doc: Which of the goods, produced by the workaholic or the slacker, will consumers prefer?

Garik: The ones made by the workaholic, they are ten times cheaper.

Doc: As a result, will the product made by the slacker go unsold?

Garik: Yes, it will.

Doc: And the slacker won't receive compensation for the time worked?

Garik: It appears so.

Doc: Why do you assert that the workaholic and the slacker will receive equal compensation for the time worked? The workaholic will receive payment for 10 hours, while the slacker will receive nothing because the products he made did not find a buyer due to their high price.

Garik: I get your point. Working slowly is unprofitable because the products will be expensive and won't find a buyer?!

Doc: Absolutely unprofitable!

Garik: Okay, let's assume people work at the same average productivity, resulting in consumers taking the goods evenly. But in this case, will the compensation received by all producers be the same?

Doc: No.

Garik: Why?

Doc: It matters what product is produced.

Garik: I'm starting to lose track of everything.

Cost

Doc: If you don't get a concussion, you'll understand. Tell me, Garik, how many producers are there for modern goods?

Garik: A multitude.

Doc: Why is this happening?

Garik: Since it's not profitable to produce all goods by oneself, it's more beneficial to produce a single product. Products made by different manufacturers are components of the final goods for consumers.

Doc: And is this the reason why cooperation and specialization require the exchange of goods?

Garik: Yes.

Doc: As a result, there are many manufacturers of modern goods. Each manufacturer expects to receive compensation for their labor.

Garik: Yes.

Doc: But to pay compensation, it's necessary to know each manufacturer's share in the total cost of the goods?

Garik: Correct.

Doc: What do you need for this?

Garik: Well… Calculate the shares of manufacturers in the cost of the goods.

Doc: Well said. The cost is the labor time spent on producing the goods. Since compensation is paid to manufacturers, it is necessary to know their shares in the total cost of the goods.

Garik: So, the cost itself is not important; what matters is the cost as the labor time spent by a specific manufacturer to produce the goods.

Doc: Exactly.

Garik: Okay, I understand your position… What about calculating the cost of goods by specific manufacturers?

Doc: Let's assume a manufacturer manually extracted raw material. What is its cost?

Garik: The time the manufacturer spent on extraction.

Doc: The manufacturer extracted the second part of the raw material in a similar manner, and combined both extracted parts into a whole. What is the total cost of the raw materials?

Garik: The sum of the two costs, that's obvious.

Doc: What about the time the manufacturer spent on combining the parts into a whole?

Garik: Sorry, I didn't think of that. We need to add it in as well.

Doc: The raw material changed its characteristics – in this case, it was piled together – as a result of the manufacturer's intervention. This is a general physical property of our world: some things change under the influence of other things. I suggest we call the first, changed things – objects, while the second, influencing ones – tools.

Garik: As you say.

Doc: The raw material is the object, and the manufacturer is the tool.

Garik: Yes, I understand.

Doc: What is the fundamental difference between objects and tools?

Garik: I can't figure it out.

Doc: The distinction is that objects transfer their material component to the manufactured goods, while tools do not transfer.

Garik: I see.

Doc: Let's continue our example. Imagine that the manufacturer manually created some tool, say a shovel. What is the cost of the shovel?

Garik: The time spent on its production is generally speaking.

Doc: Now imagine that the manufacturer combined the raw materials not with bare hands, but with a shovel. What is the total cost of the raw materials?

Garik: The cost of two parts plus the time spent by the manufacturer plus the cost of the shovel.

Doc: The cost of the shovel? Why would that be?! The shovel will be used later for similar tasks.

Garik: Indeed. Then... then... we need to divide the cost of the shovel among all similar tasks.

Doc: You don't know how many such tasks there will be.

Garik: One can roughly estimate.

Doc: Remember, Garik, a fair economy does not tolerate approximation. Either fairness exists, then there are objective economic laws. Or fairness does not exist, then there is no economy as a science at all, and there's nothing for you and me to discuss.

Garik: I prefer it when fairness exists.

Doc: Then answer, how to calculate the cost of a product when using an inanimate tool, like the shovel in our example?

Garik: I don’t know.

Doc: I gave you a hint: the tool is inanimate. But there is also animate tools...

Garik: A manufacturer?

Doc: That's right. To what extent does a product increase in value through the manufacturer's involvement in the production process?

Garik: By the time spent by the manufacturer.

Doc: If you acknowledge the existence of economic laws, then you must recognize their uniform action regarding identical entities. The manufacturer and the shovel are identical entities, both are tools. Therefore, the order of their involvement in the production process is identical.

Garik: You want to say...

Doc: That a product should increase its value by the time it participates in the production process of any tools, both animate and inanimate.

Garik: Does the cost of inanimate tools matter in this case?

Doc: Does the cost of the manufacturer matter? He doesn't even have any cost.

Garik: But then...

Doc: I’m listening attentively to you.

Garik: It turns out that the cost of the tool plays no role in calculating the cost of the product.

Doc: Exactly.

Garik: I can't figure out what that leads to.

Doc: It leads to what I told you right away: it matters what product to produce.

Garik: I don't understand.

Doc: Follow my thought and you won't be mistaken. The manufacturer made a tool. The time it took to create the tool determined its cost.

Garik: Yes.

Doc: The tool was used in the production of the product. The cost of the product increased during the time the tool was used; accordingly, the manufacturer of the tool received a share in the produced item.

Garik: Yes.

Doc: Does this share depend on the time it took to create the tool?

Garik: If I believe you, then it does not depend.

Doc: A paradox arises: in the production of tools, the time it takes to make them transforms into another value – the time of use. The tool manufacturer worked for one duration of time, but will receive compensation for another duration – the one that the tool he produced has 'worked off.'

Garik: But this contradicts the principle that 'everyone gets according to their labor'!

Doc: Not at all. The basis of this transformation is still labor.

Garik: Then all manufacturers will start making tools and no one will make items! It's much more profitable.

Doc: Not always.

Garik: Why not always?

Doc: Firstly, the need for tools is not infinite. Someone must make items; otherwise, goods will remain unproduced.

Garik: That's clear. And secondly?

Doc: Secondly, a tool may break before the time of its use exceeds the time of its making. After all, the transformation can happen not only in the direction of increasing working time but also in the direction of decreasing it.

Garik: Yes, that sounds logical. Is that all?

Doc: There's also a third point. The third point is related to consumption.

Consumption

Garik: What does consumption have to do with it? We're talking about tools.

Doc: The classification of items into products and tools is also valid in the realm of consumption.

Garik: How so?

Doc: We agreed that the manufacturer receives compensation for their labor at the moment of consumption of their product.

Garik: Yes, they do.

Doc: The consumer had breakfast. At this moment, the right of the manufacturer to receive compensation for the product they made – in this case, for food – is recognized.

Garik: No objections.

Doc: The use of food occurs simultaneously. Why?

Garik: And why is that?

Doc: Because food is used as a product. There are goods and tools of production, and there are those of consumption.

Garik: You want to say...

Doc: What I want to say is that people consume not only goods but also tools. Goods are consumed at once, whereas tools are consumed over time.

Garik: Food is an item, while buildings, furniture, cars, and computers are tools?

Doc: Exactly!

Garik: So, at what point is a tool considered consumed enough for the manufacturer to receive compensation for it?

Doc: That's the point: the consumption of a tool occurs throughout its entire usage! And the consumer must pay compensation based on the time of tool usage.

Garik: For items, the consumer pays compensation based on their cost, but for tools, it's based on the time they were made?

Doc: Just like in production. Economic laws operate uniformly concerning both production and consumption. That's why I said: it matters what kind of goods to produce. For items, the manufacturer receives compensation based on their cost, while for tools, it's based on usage time.

Garik: Is that correct?

Doc: Imagine two light bulbs. The first one burned out after 10 months, while the second one burned out after 1 month. Don't you think the first should cost ten times more than the second?

Garik: It seems so.

Doc: Any economic system that does not adhere to this condition is absurd.

Garik: Yeah, I agree with you, I agree... You were going to tell me the third reason why the production of tools might be unprofitable.

Doc: Sorry. The third reason is the delay in compensation for production tools.

Garik: What do you mean by delay? I don't understand.

Doc: The consumer only pays for what they use?

Garik: Well, of course.

Doc: So they pay for food, buildings, furniture, cars, and computers?

Garik: Yes.

Doc: And for production tools: screwdrivers, files, machines, and so on?

Garik: No, if those goods are not needed.

Doc: What do you mean by 'not needed'?

Garik: I meant: if they are not engaged in production.

Doc: What if they are?

Garik: Then they'll have to acquire them.

Doc: In that case, does the person act as a producer?

Garik: Yes.

Doc: But in a fair economy, a producer doesn't need to acquire anything from other producers. By collaboratively manufacturing goods, producers work together based on cooperation, without buying from each other. They expect compensation from the consumer – the one who uses the goods for personal consumption.

Garik: How does the producer of a screwdriver or file receive compensation?

Doc: As economic logic dictates: from the consumer of the goods produced with that screwdriver or file.

Garik: Does the manufacturer who produced the means of production have to wait for a product to be made for consumption using this means?

Doc: Exactly! This is what I call a delay in receiving compensation. Therefore, manufacturing means of production can turn out to be unprofitable. Compensation for produced consumer goods can be obtained quickly, but for produced means of production, one must wait for the completion of several consecutive productions.

Garik: Why several?

Doc: Using a hammer, a file was made; using the file, a machine was made; using the machine, a cup was made. The hammer's manufacturer will have to wait until the cup is on the consumer's table before they receive compensation for their hammer (of course, only from the cup's consumer, not from others). Economic fairness requires that every producer be interested in creating goods for personal consumption. Personal consumption is the goal; everything else is intermediate steps toward achieving that ultimate goal.

Garik: I need to think this over.

Social security

Doc: Note that the delay in receiving compensation for means of production defines social security.

Garik: Pensions, perhaps? How so???

Doc: Let’s take the aforementioned sequence of means of production: hammer – file – machine. Is there a share of the hammer's manufacturer in the cost of the file?

Garik: Of course, there is. After all, the file was made using the hammer: the hammer's manufacturer also, albeit indirectly, contributed to the file.

Doc: And is there a share of the file's manufacturer in the cost of the machine?

Garik: Yes, for the same reason.

Doc: And is there a share of the hammer's manufacturer in the cost of the machine?

Garik: Hmm... Well... If there’s a share of the hammer's manufacturer in the cost of the file, then there is.

Doc: What does that mean?

Garik: What?

Doc: The production process is continuous, in the sense that one means produces another. Consequently, in all subsequent means of production, there will be a share of the manufacturer of the very first means – the one where it all began.

Garik: The stone axe, perhaps?

Doc: Figuratively speaking, yes.

Garik: Let’s assume so. But what does this have to do with social security?

Doc: While people may lose their ability to work, their accounts continue to receive money from tools of labor once produced.

Garik: I see.

Doc: Money keeps coming even after a person's death, allowing ancestors to support their descendants.

Garik: I was wondering how the principle of 'to each according to their labor' allows for the support of children. After all, children don’t work.

Doc: Exactly. The principle of 'to each according to their labor' does not permit simply transferring money from one's account, including for the benefit of children. Fortunately, this is not necessary, as children possess their own sums from birth in their personal accounts. Do you understand everything now?

Garik: No.

Information

Doc: What is unclear to you?

Garik: A lot. In particular, why you didn’t mention companies in your explanations. Doesn't the existence of multiple producers for one product necessitate the organization of companies?

Doc: By no means. We assume that a fair economy operates under conditions of complete informatization, hence the relationships among producers are traceable. Companies are an anachronism of pre-computer civilization, although an anachronism with significant implications. The institution of legal entities serves as a theoretical justification for something we agreed never to mention.

Garik: Profit?

Doc: Be silent, unfortunate one!

Garik: I’m silent, but still... How can management decisions be made without companies? Modern production processes are complex. I can’t imagine that thousands and tens of thousands of producers amicably agree on what to do next with their products.

Doc: Those who lack confidence in the science of management delegate the right to vote to a more competent person. This person — a sort of director — makes decisions. The only difference from representatives of the modern directorate is the absence of compensation for the decisions made.

Garik: Wow!!! So, the director — no, a randomly assembled team of directors — should not get paid! But then, management decisions won't be made; there won’t be any volunteers, and even if there are, they won't reach a consensus.

Doc: In that case, products will not reach consumers, and all producers will receive no compensation whatsoever. So, you are quite mistaken: management decisions will be made, efficiently and as needed.

Garik: But managers work; they produce a managerial product!

Doc: There is no managerial product; there is intellectual activity. It is characteristic of any job, so it's not just directors who think critically. A mechanic also needs to think very well to avoid ruining a part.

Garik: Are you saying that intellectual activity is not paid for? What about artists: all the writers, composers, painters, and the like?

Doc: Garik, you are confusing divine gifts with scrambled eggs. Artists produce quite tangible products: books, scores, paintings. Yes, their products are informational in nature, so they can be copied to other media. However, any intellectual products have a material component, even if it's just electronic or magnetic. Producers of things with informational components are artists. Managers typically do not produce any goods.

Garik: My head is spinning with thoughts.

Epilogue

Doc: Don't get upset. I can't share everything I know in one conversation. Economics is a complex science, as I warned you. Moreover, the fair system we are discussing is still unattainable.

Garik: How is it unattainable??? Why???

Doc: First of all, due to the continuity of economic production. Tools are used to produce other tools, which are then used to produce others, and so on.

Garik: So what?

Doc: To build a completely just economy, one must start from scratch, which is practically impossible. This would require destroying all existing material values, which makes no sense, or restoring the necessary data on these material values, which is impossible.

Garik: Are there other reasons?

Doc: Yes. A fair economy implies comprehensive information, which is lacking. It is necessary to calculate the cost of goods, maintain personal accounts, determine consumption moments, and much more. This is complex, but theoretically feasible. However, for practical implementation, significant computing power is required. Moreover, this power must be extracted from outside the economy, as it is precisely this power that makes the economy function. The economy itself does not envisage such a technological superstructure. Where to obtain this power, produced outside the economic system, remains unknown... Unless, of course, this power unexpectedly appears from nowhere.

Garik: Is that all?

Doc: Unfortunately, no. The main reason a fair economy cannot be established is human free will.

Garik: Free will?!

Doc: Indeed. Rules by themselves cannot ensure compliance. There are no economic rules that cannot be violated.

Garik: Violations of the rules can be punished.

Doc: They can, but this does not guarantee subsequent compliance. Moreover, punishment implies integration within the system, while an economic system based on the principle of 'to each according to their labor' does not provide for such.

Garik: In what sense does it not provide for it?

Doc: In the sense that, according to our logic, the punisher does not work, meaning he produces nothing that could be consumed. Hence, he cannot receive compensation for his non-labor actions. The offender, who appropriates something in violation of the rules, and the punisher, who receives a reward for his actions, are little different from each other from an economic standpoint.

Garik: What to do?

Doc: The correct solution is to impose punishments and similar measures, extending even to the state, outside the realm of the economy: to where non-economic but different incentives operate. But even this measure will not lead to the complete eradication of economic crimes as long as the basis of all offenses—free will—remains intact.

Garik: So, there is no way to create a just economic society?

Doc: As long as all people collectively do not desire this, no, there is no way.

Garik: But people can be forced into fairness.

Doc: It is possible. However, as I mentioned, the mechanism of coercion must be removed from the economic sphere; otherwise, the established structure will not be fair. Justice is connected to humanity's partial loss of free will.

Garik: You were right, Doc, I have a concussion.

Source: habr.com