Capitalism uses the idea of permanent growth of production of goods and services for solving the problem of inequality in income and economic insecurity. Production has become the solvent of the tension once associated with inequality, and has become the indispensable remedy associated with economic insecurity. Increasing aggregate output is an alternative to redistribution or even to the reduction of inequality.
The theory of consumer demand is based on two broad propositions, both extremely important for the present value system of economics.
The first is that urgency of wants does not diminish appreciable as more of them are satisfied.
The second proposition is that demands originate in the personality of the consumer. His function is sufficiently fulfilled by maximizing the goods that supply the demand. The urgency of demand is a function of the quantity of goods which the individual has available to satisfy that demand.
The explanation of consumer behavior has its ancestry in the oldest problem of economics, that of price determination. The price at which individual items are valued will reflect the existing income distribution. Inflation-persistently rising prices-is obviously a phenomenon of comparatively high production.
When supply cannot be readily increased, as will be the case of production, further increases in demand are capable of bringing price increases. The only recourse is to bring demand into balance with supply.
The allocation is accomplished in the capitalist society by the market- by the pull and push of market prices and market wages, bringing labor, capital and materials to the companies and industries of most efficient use.
In a competitive market, price will function to equalize the quantity demanded by consumers and the quantity supplied by producers, resulting in an economic equilibrium of price and quantity.
This system worked industriously during many years without counting some falling out steps. However, until now there was not worked out a gearing, precisely defining the dimensions of demand and supply.
The speculators in the markets did not fail to take advantage of this. They deliberately misrepresented this data, manipulating with prices to their benefit, taking away a sizable income from the great bulk of ordinary people.
At the same time, the countries possessing enormous reserves of the source of row materials, especially oil and gas, manipulated the law of demand and supply, overstating the prices on their discretion.
Why is it that the countries with huge oil reserves can form Cartels (OPEC) and with their agreements organize drops in production of oil considerably raising prices?
The rise of oil prices lay as a heavy burden on the consumers of this vitality important and so much necessary product in the contemporary world.
In the industrial countries there are strict prohibitory laws of rising prices on arrangements between corporations. In essence the oil Cartels extort all industrial countries. This is the greatest transfer of wealth in the history of the world.
In addition, the traders of commodities (speculators) play a role of no small importance in the falsification of data of demand and corresponding level of prices. Employing their predatory interest, artificially raising the demand, they influence the increase of prices, redoubling and speeding up the inflation process. The influx of their capital in the futures markets of commodities drives up these prices. The best decision, in our opinion, would be pushing aside the speculators from the commodities trade and the organization of trade between the producers and consumers. Besides that the industrial countries should obtain a decision from the International court to impose a ban on organized drops in production of oil by the Cartel.
It should be given an incentive to stimulate competition of increases of oil drilling. The increased demand of oil with the appearance of new consumers as China, India and others means that the oil drilling should be increased to the level of demand. It’s not a secret that the commodities in the world are limited. However it doesn’t mean that prices of commodities should rise unlimited. Taking into consideration these realities already the industrial countries are engaged in scientific research for discovery of new aspects of row materials, and fuel resources and their rational use.
On the other hand the reason that assisted the lowering of income of the middle class workers consisted that the leadership of public corporations adjusted the financial results so they could misappropriate millions of dollars under the pretense of premiums and bonuses, bringing some companies to a full ruin.
The new situation in the XXI century is determined by two major trends-globalization and the spread of the scientific revolution. There is a need of a new approach to the problem of growth of production of goods and services and distribution of income. Undoubtedly the limit of continuous economic growth was reached and in the near future we shall satisfy our requirements with the reached peak and slower growth.
Under new existing conditions it is necessary to revise the old norms of distribution of income and establish new norms, promoting the implementation of necessary economical requirements of all levels of the population.
What shall be undertaken?
First, wages should be coordinated with the results of productivity of labor. This means that wages should be increased in correspondence with the percentage of increased productivity, and decreased with the percentage of decreased productivity. Also wages should be increased in correspondence with the percentage of inflation. People, who didn’t find jobs in the industrial sphere, after retraining ought to be directed to the non-industrial sphere.(education, medicine, army, etc.)
Second, it is necessary to establish an order of distribution of profits by public corporations. The concrete definition of a correlated percentage should be worked out by a scientific-research institute. However, it seems to us, that it is advisable to distribute profits exemplary, in the following way:
for scientific research and development -50%
for financial incentives of members of the corporations -25%
dividends for stock shareholders -25%
If by chance, corporations assume that the results of their activities are unprofitable: the whole collective of workers doesn’t receive financial incentives; the price of the corporation’s stock comes down accordingly with the percentage of losses.
The collectives of companies workers should get awarded for yearly results. The premiums and bonuses for CEOs, CFOs and other leading personal can be of any reasonable dimension but should be obliged to be coordinated with the final results of the corporations, not for a year, but for a five year period.
Then the leaders will understand that they must work harder, persistently, and creatively in order to obtain premiums and bonuses.
It seems to us, that such an orderly distribution of income on condition that prices become relatively stable, can re-establish fairness, when all levels of the population make use of the advantage of the capitalistic system.
Saturday, December 24, 2016
Just Capitalism
The financial and economic situation in our country, like all over the world lately, sharply deteriorated. There are many obvious causes, but in summary this is a result of the exhaustive levers of managing the contemporary capitalistic system.
The foundation of progress in the capitalistic system consisted of increased production of goods and services that was an alternative to redistribution and economic insecurity. Undoubtedly the limit of continuous economic growth was reached and, in the near future, we shall satisfy our requirements with the reached peak and slower growth.
Regardless of the natural reasons of the decline, the sphere of production and services has substantial problems. The core issue lays in the fact that leadership of public corporations was able to gain full freedom of activities that frequently went fraudulent. They juggled the facts and adjusted the financial results so they could misappropriate many millions of dollars under pretence of premiums and bonuses, bringing some companies to a full ruin. The public corporations belong rightfully to the stockholders and should be completely accountable to them.
This means, that it is necessary to make tougher the approach of selecting the corporations leading personnel. It should consist of highly skilled specialists of corresponding branches of industry. The Board of directors should be elected from the best specialists of the companies, but not from 'honorable newcomers' from elsewhere. The salary of CEOs, CFOs and other leading personnel shouldn't exceed 3-5 times the rate of pay of a medium level specialist. The premiums and bonuses can be of any reasonable dimension, but should be obligatory coordinated with the financial results of the company not for a year, but for a five year period. Then the leaders will understand that they must work harder, persistently, and creatively in order to obtain premiums and bonuses. The corporate leadership is responsible for all aspects of daily activities of corporations. They are accountable for trustworthiness of book-keeping and in charge of signing the information given to the public.
* * *
Financial institutions are in a significantly worse shape. Exploiting billions of means of investor's money, they were engaged in risky business, consisting of giving out precarious loans for purchasing houses, and as well as other speculative business, incurring billions of losses. The instability introduced by volatile markets threatens the normative foundation of the open society. Giving the free rein of full freedom of action to the players of the financial markets, we should remember that the human nature is a long way from perfection and it takes a long time for the effective control levers to be built, without which the system is a complete failure.
The point is that the speculators seized the leadership of the markets, which draws in purchases and short sells of stocks, bonds, commodities, real estate, derivatives, or any valuable financial instrument to profit from fluctuations in the price, as opposed to buying for use or long-term investment. They don't bring any benefits to society in creating any valuable goods or services for consumers, who are at the end of the supply demand chain. They artificially violate the balance of supply and demand, so they can make every day millions of dollars, enriching themselves on the back of the ordinary investors and consumers. So should the speculation be allowed?
The root of all evil in the developed situation lies in the basis of price definition. Price should reflect the use value of goods and services, be well-founded and established, taking into account the demand and supply on the market. The market undoubtedly affects the level of prices by means of adjusting the total volume of output. However it shouldn't independently establish prices. For some reason in practice a fallacious procedure was established, under which the market determined the price (for stocks, bonds, commodities etc.)
Under the pretence of changes in demand and supply an instrument is handed over to the speculators with the help of which they constantly manipulate the markets, misappropriating billions of dollars, that are taken away from honest consumers and long-term investors. It is unreasonable to expect a fair distribution of income among the population until the deceptive practice of market price determination is in hands of opportunists. The better approach is to relinquish this responsibility to the producers of the material values. The stabilization of prices referring to our affirmation is equivalent of establishing justice in income distribution, which equivalents to establishing-A NEW PHASE OF CAPITALISM- where all levels of the population makes use of the advantage of the capitalistic system, smoothing over contradiction in the distributions of income.
* * *
The tax system is connected simultaneously with the distribution of income and economy. Taking into consideration the significance of taxing as an instrument of fiscal policy of the government, there are many theories about the role of taxing in the economy. Theoretically, the tax should be as low as possible to create incentives for people to work harder. Low tax should also encourage entrepreneurs as they will not lose much of the profit in taxation. Using tax in this way to encourage enterprise and hard work is a supply side of the policy. The taxes also should provide the budget with rational needs. At present time the tax code is so complicated that ordinary taxpayers can't fill in the forms on their own. They are forced to spend 300 billion of dollars every year to accomplish this complex job. In addition to the tax system being complicated, it allows government to expropriate the excess means from the population and corporations. It gives the politicians an instrument and ability to cut or raise taxes. No more tax rise or tax cuts. Taxes should be permanent. The current tax system is a convoluted failure.
It seems to us, that the time is ripe for a full reform of the tax system. It is time for transition to a new tax system - Flat tax. This is a system with a constant tax rate, where the working people pay taxes by fixed rates (percentage) from their income and corporations - a percentage from their profits. If a consistent and reliable approach is applied to determine the tax rates, than a new tax system can be created with minimal collection of taxes that satisfy the needs of the budget. Flat tax is simple, fair, and good for growth, labor income, for business and capital income. A flat tax by dramatically lowering rates and ending the tax code's bias against saving and investment would boost the economy's performance. The transition to a Flat tax demands boldness, inventiveness and responsibility.
In the future our country will be obliged to make a decision to go over to universal health care. It means that instead of paying premiums to the Insurance companies, we should work out a payroll tax rate for workers and corporations for health care. This payroll tax will pull resources with Medicare and Medicaid in the budget, forming an aggregate fund for universal health care. The payroll tax for universal health care will constitute a separate fund, which the budget should transfer to a special organization, responsible for managing the universal health care and use of the allotted means.
And so, to summarize it, putting in order the corporations' management, introduction of a new system to define prices in the market and the transition to a Flat tax system, undoubtedly will affect economical growth and adjust distribution of income in society.
The foundation of progress in the capitalistic system consisted of increased production of goods and services that was an alternative to redistribution and economic insecurity. Undoubtedly the limit of continuous economic growth was reached and, in the near future, we shall satisfy our requirements with the reached peak and slower growth.
Regardless of the natural reasons of the decline, the sphere of production and services has substantial problems. The core issue lays in the fact that leadership of public corporations was able to gain full freedom of activities that frequently went fraudulent. They juggled the facts and adjusted the financial results so they could misappropriate many millions of dollars under pretence of premiums and bonuses, bringing some companies to a full ruin. The public corporations belong rightfully to the stockholders and should be completely accountable to them.
This means, that it is necessary to make tougher the approach of selecting the corporations leading personnel. It should consist of highly skilled specialists of corresponding branches of industry. The Board of directors should be elected from the best specialists of the companies, but not from 'honorable newcomers' from elsewhere. The salary of CEOs, CFOs and other leading personnel shouldn't exceed 3-5 times the rate of pay of a medium level specialist. The premiums and bonuses can be of any reasonable dimension, but should be obligatory coordinated with the financial results of the company not for a year, but for a five year period. Then the leaders will understand that they must work harder, persistently, and creatively in order to obtain premiums and bonuses. The corporate leadership is responsible for all aspects of daily activities of corporations. They are accountable for trustworthiness of book-keeping and in charge of signing the information given to the public.
* * *
Financial institutions are in a significantly worse shape. Exploiting billions of means of investor's money, they were engaged in risky business, consisting of giving out precarious loans for purchasing houses, and as well as other speculative business, incurring billions of losses. The instability introduced by volatile markets threatens the normative foundation of the open society. Giving the free rein of full freedom of action to the players of the financial markets, we should remember that the human nature is a long way from perfection and it takes a long time for the effective control levers to be built, without which the system is a complete failure.
The point is that the speculators seized the leadership of the markets, which draws in purchases and short sells of stocks, bonds, commodities, real estate, derivatives, or any valuable financial instrument to profit from fluctuations in the price, as opposed to buying for use or long-term investment. They don't bring any benefits to society in creating any valuable goods or services for consumers, who are at the end of the supply demand chain. They artificially violate the balance of supply and demand, so they can make every day millions of dollars, enriching themselves on the back of the ordinary investors and consumers. So should the speculation be allowed?
The root of all evil in the developed situation lies in the basis of price definition. Price should reflect the use value of goods and services, be well-founded and established, taking into account the demand and supply on the market. The market undoubtedly affects the level of prices by means of adjusting the total volume of output. However it shouldn't independently establish prices. For some reason in practice a fallacious procedure was established, under which the market determined the price (for stocks, bonds, commodities etc.)
Under the pretence of changes in demand and supply an instrument is handed over to the speculators with the help of which they constantly manipulate the markets, misappropriating billions of dollars, that are taken away from honest consumers and long-term investors. It is unreasonable to expect a fair distribution of income among the population until the deceptive practice of market price determination is in hands of opportunists. The better approach is to relinquish this responsibility to the producers of the material values. The stabilization of prices referring to our affirmation is equivalent of establishing justice in income distribution, which equivalents to establishing-A NEW PHASE OF CAPITALISM- where all levels of the population makes use of the advantage of the capitalistic system, smoothing over contradiction in the distributions of income.
* * *
The tax system is connected simultaneously with the distribution of income and economy. Taking into consideration the significance of taxing as an instrument of fiscal policy of the government, there are many theories about the role of taxing in the economy. Theoretically, the tax should be as low as possible to create incentives for people to work harder. Low tax should also encourage entrepreneurs as they will not lose much of the profit in taxation. Using tax in this way to encourage enterprise and hard work is a supply side of the policy. The taxes also should provide the budget with rational needs. At present time the tax code is so complicated that ordinary taxpayers can't fill in the forms on their own. They are forced to spend 300 billion of dollars every year to accomplish this complex job. In addition to the tax system being complicated, it allows government to expropriate the excess means from the population and corporations. It gives the politicians an instrument and ability to cut or raise taxes. No more tax rise or tax cuts. Taxes should be permanent. The current tax system is a convoluted failure.
It seems to us, that the time is ripe for a full reform of the tax system. It is time for transition to a new tax system - Flat tax. This is a system with a constant tax rate, where the working people pay taxes by fixed rates (percentage) from their income and corporations - a percentage from their profits. If a consistent and reliable approach is applied to determine the tax rates, than a new tax system can be created with minimal collection of taxes that satisfy the needs of the budget. Flat tax is simple, fair, and good for growth, labor income, for business and capital income. A flat tax by dramatically lowering rates and ending the tax code's bias against saving and investment would boost the economy's performance. The transition to a Flat tax demands boldness, inventiveness and responsibility.
In the future our country will be obliged to make a decision to go over to universal health care. It means that instead of paying premiums to the Insurance companies, we should work out a payroll tax rate for workers and corporations for health care. This payroll tax will pull resources with Medicare and Medicaid in the budget, forming an aggregate fund for universal health care. The payroll tax for universal health care will constitute a separate fund, which the budget should transfer to a special organization, responsible for managing the universal health care and use of the allotted means.
And so, to summarize it, putting in order the corporations' management, introduction of a new system to define prices in the market and the transition to a Flat tax system, undoubtedly will affect economical growth and adjust distribution of income in society.
Political and Economic Protection of Citizens' Interests
The concept of sovereignty in the 21th century acquires a new sense and substance. The right of sovereignty is a priority of democratic countries. In democratic states, sovereignty is held by the citizens. This is known as popular sovereignty through the election of representatives to the government.
In international law sovereignty is defined as the legitimate exercise of power and the interpretation of international law by state, promoting and respect for human rights and fundamental freedom for all without distinction, individual accountability for war crimes and crimes against humanity. Sovereignty means that the state authorities are responsible for the functions of protecting the safety and lives of its citizens, and promotion of their welfare. The national political authorities are responsible to their citizens internally and to international community through the UN.
In case the state fails to carry out these responsibilities, the responsibility to protect falls on the international community acting through the UN, even if enforcing it requires infringing on the state sovereignty. Thus the principle of nonintervention yields to the international responsibility to protect. The redefinition of sovereignty to include a duty to protect human rights has been paralleled with the appreciation and codification of individual accountability for human rights, states have a duty to investigate, prosecute or extradite individual perpetrators. Again, if they fail and are unable or unwilling to do so, other states, the UN, and the international community can step forward instead. It becomes a thing of the past, when dictators could cover their crimes referring to sovereignty.
In a free democratic state the government is elected by the people by means of free and just elections and serves them to satisfy their requirements for well-being and safety. The basic functions, carried out by the government are the following:
To ensure human rights, peace, safety, lead internal and external politics, maintain the army, court of justice and order in the country
To guarantee public education of the young generation, financing all stages of school training
To guarantee healthcare for all citizens and full financing, which combined with education should ensure the formation of top-level intellect and productivity of working citizen in industry, science and service spheres
To guarantee effective management of the limited machinery of state of all other spheres of service to the country's population
To guaranty the development of the country's infrastructure.
Taking into consideration the limited possibility of influence on the private economy, it supposed to release the president of the country from the responsibility for the state of the economy, finance and employment in the private sphere of economic activities.
All other branches of industry and spheres of service for the population are the prerogative of private economy and finance and priority of capitalistic free market, which should be responsible for constant growth of the economy, its finance and maximum employment in the sphere of production and service for the country's population.
In order to lead and regulate the activities of the private sector in the sphere of economics and finance it is advisable to create a special organization: Financial-Commerce-Industry Commission, financed by this sector, to whom to impose the duty of production and trade of consumer goods and services in the country and beyond.
There is a possibility when a president simply doesn't cope with his duties, particularly when the question is the safety of the people, or the misbehavior of international safety. If that is so, the president should act responsible and resign. If this does not happen, the parliament, guided by the interest of the people, should decide the question of his impeachment.
Obvious examples of unfit presidents are: Syria, North Korea, and Iran. In Syria the president leads a war with his own people for more than 5 years. During this period were murdered 270,000 human beings. Many million citizens left the country and become refugees. The whole country is destroyed. The president, who is responsible for all this is a war criminal. Did the UN take any measures against this president? Not yet. Similar leaders preside in North Korea and Iran. These countries unfortunately are members of the United Nations. They cover their criminal acts by referring to sovereignty.
Only the implementation of the responsibilities of sovereignty law of all countries and a through control of international community, in the face of the United Nations, will ensure the political protection of all citizens.
* * *
The main problem that should right away be decided appears to be the fair distribution of income in the private sector of economy. It is known that at the new arising of capitalism, the proprietors risked their capital, spending it on equipment, materials, pay salaries to workers. After the realization of products they have the right to get the full profit. Inequality in income at that time can be understood.
changed. This is because public corporations are collective property.
Corporate America is the best example of an economic system in the world. USA has a high rate of new business starts, it breeds a constant flow of new high impact firms, the kind that create value and stimulate growth by bringing new ideas to the market, be new technologies, new business methods, or simply new and better ways of performing routine tasks.
To maintain the rate of growth of production, there is a need of additional investment of capital. The prominent capitalist doesn't want to risk his money. As a consequence the contemporary economy decided to issue public companies stock, to accumulate large funds necessary for investment in developing new products and the expansion of existing ones.
This creating in essence altered the economical system of the USA into a "people's capitalism". By investing their savings and pension funds in stocks, working people expect to get a share of corporate profits in addition to their earnings. It is reasonable that such profits go hand in hand with some risk of failure within a few companies. Besides, they help corporations fulfill their needs for a constant increase of production.
These stock prices need to reflect the results of the public companies activities and fluctuate within the boundaries of collected profit(losses) for every stock. As a result, the price of a stock becomes a derivative of fluctuating profits. Over a long term, stock prices rise in line with earnings per share. The profit(losses) of companies reflect a complete and final result of their activities, taking into consideration the quantity and quality of production, its sales, productivity, cost price and other economical, political and social changes for a corresponding period.
Therefore, it is unacceptable that the daily abrupt not well-founded ups and downs can scare away investors from buying stocks. Stocks are not goods, but valuable papers, which reflect the accumulation of profits on a definite date. The price of a stock should be determined by the public companies by means of book-keeping calculations, by adding the profit of a given quarter divided by the amounts of shares, to the price of the stock from the time when the stock was issued, i.e. initially public offering. Thus not the stock market, but the public corporations set the price of their stock, and bear the responsibility of their substantiation. One would think that such organization of the stock exchange satisfies the requirements of capital investment. In reality, the stock market operates on an order established 200 years ago, I.e. the price of a stock is what somebody is ready to pay for it. This way the traders(speculators) enrich themselves on the stock market on the account of volatile movements of stock prices. They make money when the prices go up and down, by means of increased frequency of buys and sells. The investment business is a giant scam; it deletes billions of dollars every year in transaction cost. They artificially violate the balance of supply and demand (that doesn't apply to stocks),so they can make every day billions of dollars, enriching themselves on the backbone of ordinary investors. For the average investor this is certainly a scam. They know that big investors manipulate the market.
Market forces can accomplish wonderful things, but cannot ensure a distribution of income, that enables all citizen to meet basic economic needs. To pretend that nothing changed from the time of the start of capitalism - is to put a brave face on a sorry business.
The CEOs of corporations, which are the same employees like all others, take away a big share of corporate profits(about 30-50 millions as premiums and bonuses) and for all that they don't risk at all with their capital. This is frankly spoken a robbery of the company, the workers and shareholders. This has to come to an end.
The new situation in the 21st century requires a new approach to the distribution of income. Under the new existing condition it is necessary to establish new norms promoting the implementation of necessary economical requirements of all levels of the population. Wages should be coordinated with the results of productivity of labor and inflation. It is necessary to establish an order of distribution of profits by public corporations.
The concrete definition of a correlated percentage should be worked out by a scientific-research institute. However, it seemed to us, that it is advisable to distribute profits exemplary, in the following way:
for scientific research and development - 50%for financial incentives of members of corporations - 25%for dividends for stock shareholders - 25%
The collectives of company's workers should get awarded for yearly results. The premiums end bonuses for CEOs, CFOs and other leading personnel can be of any reasonable dimension, but should be coordinated with the final results of corporations, not for a year, but for a five year period.
In addition it is unreasonable to expect a fair distribution of income among the population until the deceptive practice of market price determination is in hands of speculators. The stabilization of prices together with recommended distribution of profits referring to our affirmation is equivalent to establishing justice in income distribution, which equivalents to establishing a new phase of capitalism where all levels of the population makes use of the advantage of the capitalistic and democratic systems, smoothing over contradiction in the distribution of income.
s
In international law sovereignty is defined as the legitimate exercise of power and the interpretation of international law by state, promoting and respect for human rights and fundamental freedom for all without distinction, individual accountability for war crimes and crimes against humanity. Sovereignty means that the state authorities are responsible for the functions of protecting the safety and lives of its citizens, and promotion of their welfare. The national political authorities are responsible to their citizens internally and to international community through the UN.
In case the state fails to carry out these responsibilities, the responsibility to protect falls on the international community acting through the UN, even if enforcing it requires infringing on the state sovereignty. Thus the principle of nonintervention yields to the international responsibility to protect. The redefinition of sovereignty to include a duty to protect human rights has been paralleled with the appreciation and codification of individual accountability for human rights, states have a duty to investigate, prosecute or extradite individual perpetrators. Again, if they fail and are unable or unwilling to do so, other states, the UN, and the international community can step forward instead. It becomes a thing of the past, when dictators could cover their crimes referring to sovereignty.
In a free democratic state the government is elected by the people by means of free and just elections and serves them to satisfy their requirements for well-being and safety. The basic functions, carried out by the government are the following:
To ensure human rights, peace, safety, lead internal and external politics, maintain the army, court of justice and order in the country
To guarantee public education of the young generation, financing all stages of school training
To guarantee healthcare for all citizens and full financing, which combined with education should ensure the formation of top-level intellect and productivity of working citizen in industry, science and service spheres
To guarantee effective management of the limited machinery of state of all other spheres of service to the country's population
To guaranty the development of the country's infrastructure.
Taking into consideration the limited possibility of influence on the private economy, it supposed to release the president of the country from the responsibility for the state of the economy, finance and employment in the private sphere of economic activities.
All other branches of industry and spheres of service for the population are the prerogative of private economy and finance and priority of capitalistic free market, which should be responsible for constant growth of the economy, its finance and maximum employment in the sphere of production and service for the country's population.
In order to lead and regulate the activities of the private sector in the sphere of economics and finance it is advisable to create a special organization: Financial-Commerce-Industry Commission, financed by this sector, to whom to impose the duty of production and trade of consumer goods and services in the country and beyond.
There is a possibility when a president simply doesn't cope with his duties, particularly when the question is the safety of the people, or the misbehavior of international safety. If that is so, the president should act responsible and resign. If this does not happen, the parliament, guided by the interest of the people, should decide the question of his impeachment.
Obvious examples of unfit presidents are: Syria, North Korea, and Iran. In Syria the president leads a war with his own people for more than 5 years. During this period were murdered 270,000 human beings. Many million citizens left the country and become refugees. The whole country is destroyed. The president, who is responsible for all this is a war criminal. Did the UN take any measures against this president? Not yet. Similar leaders preside in North Korea and Iran. These countries unfortunately are members of the United Nations. They cover their criminal acts by referring to sovereignty.
Only the implementation of the responsibilities of sovereignty law of all countries and a through control of international community, in the face of the United Nations, will ensure the political protection of all citizens.
* * *
The main problem that should right away be decided appears to be the fair distribution of income in the private sector of economy. It is known that at the new arising of capitalism, the proprietors risked their capital, spending it on equipment, materials, pay salaries to workers. After the realization of products they have the right to get the full profit. Inequality in income at that time can be understood.
changed. This is because public corporations are collective property.
Corporate America is the best example of an economic system in the world. USA has a high rate of new business starts, it breeds a constant flow of new high impact firms, the kind that create value and stimulate growth by bringing new ideas to the market, be new technologies, new business methods, or simply new and better ways of performing routine tasks.
To maintain the rate of growth of production, there is a need of additional investment of capital. The prominent capitalist doesn't want to risk his money. As a consequence the contemporary economy decided to issue public companies stock, to accumulate large funds necessary for investment in developing new products and the expansion of existing ones.
This creating in essence altered the economical system of the USA into a "people's capitalism". By investing their savings and pension funds in stocks, working people expect to get a share of corporate profits in addition to their earnings. It is reasonable that such profits go hand in hand with some risk of failure within a few companies. Besides, they help corporations fulfill their needs for a constant increase of production.
These stock prices need to reflect the results of the public companies activities and fluctuate within the boundaries of collected profit(losses) for every stock. As a result, the price of a stock becomes a derivative of fluctuating profits. Over a long term, stock prices rise in line with earnings per share. The profit(losses) of companies reflect a complete and final result of their activities, taking into consideration the quantity and quality of production, its sales, productivity, cost price and other economical, political and social changes for a corresponding period.
Therefore, it is unacceptable that the daily abrupt not well-founded ups and downs can scare away investors from buying stocks. Stocks are not goods, but valuable papers, which reflect the accumulation of profits on a definite date. The price of a stock should be determined by the public companies by means of book-keeping calculations, by adding the profit of a given quarter divided by the amounts of shares, to the price of the stock from the time when the stock was issued, i.e. initially public offering. Thus not the stock market, but the public corporations set the price of their stock, and bear the responsibility of their substantiation. One would think that such organization of the stock exchange satisfies the requirements of capital investment. In reality, the stock market operates on an order established 200 years ago, I.e. the price of a stock is what somebody is ready to pay for it. This way the traders(speculators) enrich themselves on the stock market on the account of volatile movements of stock prices. They make money when the prices go up and down, by means of increased frequency of buys and sells. The investment business is a giant scam; it deletes billions of dollars every year in transaction cost. They artificially violate the balance of supply and demand (that doesn't apply to stocks),so they can make every day billions of dollars, enriching themselves on the backbone of ordinary investors. For the average investor this is certainly a scam. They know that big investors manipulate the market.
Market forces can accomplish wonderful things, but cannot ensure a distribution of income, that enables all citizen to meet basic economic needs. To pretend that nothing changed from the time of the start of capitalism - is to put a brave face on a sorry business.
The CEOs of corporations, which are the same employees like all others, take away a big share of corporate profits(about 30-50 millions as premiums and bonuses) and for all that they don't risk at all with their capital. This is frankly spoken a robbery of the company, the workers and shareholders. This has to come to an end.
The new situation in the 21st century requires a new approach to the distribution of income. Under the new existing condition it is necessary to establish new norms promoting the implementation of necessary economical requirements of all levels of the population. Wages should be coordinated with the results of productivity of labor and inflation. It is necessary to establish an order of distribution of profits by public corporations.
The concrete definition of a correlated percentage should be worked out by a scientific-research institute. However, it seemed to us, that it is advisable to distribute profits exemplary, in the following way:
for scientific research and development - 50%for financial incentives of members of corporations - 25%for dividends for stock shareholders - 25%
The collectives of company's workers should get awarded for yearly results. The premiums end bonuses for CEOs, CFOs and other leading personnel can be of any reasonable dimension, but should be coordinated with the final results of corporations, not for a year, but for a five year period.
In addition it is unreasonable to expect a fair distribution of income among the population until the deceptive practice of market price determination is in hands of speculators. The stabilization of prices together with recommended distribution of profits referring to our affirmation is equivalent to establishing justice in income distribution, which equivalents to establishing a new phase of capitalism where all levels of the population makes use of the advantage of the capitalistic and democratic systems, smoothing over contradiction in the distribution of income.
s
Reorganize the Health Care System
All citizens of our country deserve the security of universal health care that guarantees access based on needs rather than income.
It is a fundamental human right and an important measure of social justice. The government should play the central role of regulating, financing, and providing health care. Everyone faces the possibility of poor health.
The risk should be shared broadly to ensure fair treatment and equitable rates, and everyone should share responsibility for contributing to the system through progressive financing.
The cost of health care is rising. Over the past years its expenditure have risen faster than the cost increases reported in other sectors of the economy. As a matter of fact, the free market doesn't work for the health care system.
* * *
There are two ways of financing health care:
The first is a private method of financing, by means of using workers' and corporations' money as premiums for acquisition of private insurance, which provides medical care. The established order leaves far behind 47 million people without health insurance.
The second way, which is used by all developed countries of the world, is by taxing the workers for health care, which generates a pool of money, financing it through the budgets of the countries. The people of our country prefer private medical insurance and private health care. Getting accustomed, in the course of time to the existing system, our people reject all other proposals independent of their merits.
An analysis of the acting system of private health insurance shows that this in essence is a social method of distribution of collected premiums. The insurance companies collect premiums from all insured workers and spend a part of them for health care of needy patients. As we see, private stays only the misappropriation of profits. Social distribution is carried out not on the scale of the full country, but is only limited by every medical insurance company.
Medical insurance companies use as the basis of their operations an unfair practice. They select for medical insurance only relatively young, healthy, working people, which rarely are sick. They constantly increase the premium rates, excluding retirees who need substantially more care. Thus, the health insurance companies established for themselves hothouse conditions. They make billions of dollars in profits, which in essence is a simple misappropriation of unused means of healthy people, that don't need medical services. Justifiably these means should be set aside in a special fund and used for care when these workers retire.
Under the existing system, medical insurance companies have every reason to limit our care and increase our co-payments and deductibles. HMOs are famous for refusing to cover necessary hospital stay, denying people coverage for emergency room visits and balking at medically necessary procedures and therapy. The main reason our system is so expensive is that it has to support profit-hungry HMOs. In the U.S. thirty percent of each premium dollar goes to pay for administrative expenses and profits.
HMOs stand as a useless obstacle in between doctors and their patients. A question occurs. It is necessary to have HMOs in the system?The answer is clear. There is no need for HMOs. This is an unnecessary link and it need to be abolished. It is necessary to establish a system that allows providers to concentrate on care, not on profit margins.
* * *
The health care system needs a fundamental change and improvement. It consists precisely that is necessary to decide a ripe task about improvement of medical care, simultaneous lowering the expenditures and providing all citizens of our country with goo care. This major problem brooks no further delay. It is generally known that health care in our country equates with small business, and all participants are interested, like every business, in receiving the highest possible profits.
Breaking up the medical care into small medical offices don't favor the development in this field and the fundamental medical tasks of lowering the cost of medical care by following reasons:
advanced medical technology can't be used in these offices;conditions don't exist for a high level of organized health services;doctors prefer to minimize the time for medical examination of patients;fee for service is not the best idea in this field.
The enumerated shortcomings in its turn lead to:
the growth of serving medical staff and administrative expenses;deterioration of efficacy of outpatient treatment, increases visits of patients and needless referrals to hospitals;aggregate increase of expenditures on medical care.
* * *
Under existing circumstances of irrational organization of medical care in our country, it is necessary to look for new structures to satisfy the requirements of contemporary reality.
Inevitably comes to mind a conclusion of advisability to reorganize the whole structure of medical care. Instead of great numbers of small unproductive medical offices it is preferable to organize large-scale multi profile medical clinics, each of them to be attached to a near hospital and working in two shifts.
These outpatients' clinics should be equipped with modern medical and information - computer technology, as well as contemporary laboratories, and carry out in them all necessary medical examinations, tests, procedures etc., considerably raising the quality of medical care and labor productivity of all medical staff.
Another important measure - fundamental change of existing payment system for medical doctors care. We offer the introduction of pay by the hour remuneration system in the form of rate of salaries. Salaries for doctors should be established in dependence with the qualification, confirmed every five years, exemplary 150-200-250 thousand dollars yearly. Besides that should be established a distribution of bonuses for successfully carried out surgeries and excellent medical treatments of patients. This undoubtedly will switch over the attention of medical doctors to quality health services for patients. In essence, only such radical changes can be called medical care reform.
* * *
It is advisable to set up a public, non-profit organization for medical care of the population of the whole country, with branches in all states. The leadership of the non-profit organization should be carried out by the best experts in medicine, science, economics, finances and public relationship. They must take full responsibility for the medical care of the entire population and the use of means for financing it. It must include effective mechanisms for controlling costs of medical care. All controversial questions should be decided between medical doctors-experts from this organization and treating doctors. This will be a managed health care system. Managed care reflects the country's distinctive approach to a universal human challenge. The cost of medical care must be contained. The rational for limit setting policies must be explicit and readily available to the public. The rational must show how the policy promotes good care for individuals and optimal use of available resources for the large population.
It is advisable to free the medical doctors from the necessity of insurance against cases of committing medical errors, lifting of them the heavy burden of unnecessary wasted expenses. Medical doctors, undoubted should carry the responsibility for committing criminal negligence in the performance of their duties, causing irreparable harm to the health of treating patients.
* * *
It arises a question. How to carry out the financing of health care in the new term?
The main thing and the only source of financing should be the use of a special tax for these purposes. It should be worked out a scientifically grounded percent of tax for the income of workers and profits of corporations and businesses, generating a fund, which should defray expenses on health care. To this fund should be directed the means from Medicare and Medicaid. Thus, all the means for financing medical care should be directed from the budgets to the public non-profit organization. This organization, in a proper way, should work out in detail an estimate expenditure of its budget. Within reasonable limits of this budget will be maintained the full medical care system.
A scientific institution of appropriate profile should work out such a budget. If one may put it that way, undoubtedly we can assume that the maintenance cost of medical care under the new favorable conditions will be considerably lower than at present time. It seems to us, that the proposed perfected system sets a shield to uncontrolled expenditures of medical care, which under the system of unlimited presentation of bills to Insurance companies, Medicare and Medicaid becomes similar to a snowball, uninterruptedly going downhill on the verge of disaster.
The system of medical care and financing of a new type should decide the topical problems of contemporary health care.
It is a fundamental human right and an important measure of social justice. The government should play the central role of regulating, financing, and providing health care. Everyone faces the possibility of poor health.
The risk should be shared broadly to ensure fair treatment and equitable rates, and everyone should share responsibility for contributing to the system through progressive financing.
The cost of health care is rising. Over the past years its expenditure have risen faster than the cost increases reported in other sectors of the economy. As a matter of fact, the free market doesn't work for the health care system.
* * *
There are two ways of financing health care:
The first is a private method of financing, by means of using workers' and corporations' money as premiums for acquisition of private insurance, which provides medical care. The established order leaves far behind 47 million people without health insurance.
The second way, which is used by all developed countries of the world, is by taxing the workers for health care, which generates a pool of money, financing it through the budgets of the countries. The people of our country prefer private medical insurance and private health care. Getting accustomed, in the course of time to the existing system, our people reject all other proposals independent of their merits.
An analysis of the acting system of private health insurance shows that this in essence is a social method of distribution of collected premiums. The insurance companies collect premiums from all insured workers and spend a part of them for health care of needy patients. As we see, private stays only the misappropriation of profits. Social distribution is carried out not on the scale of the full country, but is only limited by every medical insurance company.
Medical insurance companies use as the basis of their operations an unfair practice. They select for medical insurance only relatively young, healthy, working people, which rarely are sick. They constantly increase the premium rates, excluding retirees who need substantially more care. Thus, the health insurance companies established for themselves hothouse conditions. They make billions of dollars in profits, which in essence is a simple misappropriation of unused means of healthy people, that don't need medical services. Justifiably these means should be set aside in a special fund and used for care when these workers retire.
Under the existing system, medical insurance companies have every reason to limit our care and increase our co-payments and deductibles. HMOs are famous for refusing to cover necessary hospital stay, denying people coverage for emergency room visits and balking at medically necessary procedures and therapy. The main reason our system is so expensive is that it has to support profit-hungry HMOs. In the U.S. thirty percent of each premium dollar goes to pay for administrative expenses and profits.
HMOs stand as a useless obstacle in between doctors and their patients. A question occurs. It is necessary to have HMOs in the system?The answer is clear. There is no need for HMOs. This is an unnecessary link and it need to be abolished. It is necessary to establish a system that allows providers to concentrate on care, not on profit margins.
* * *
The health care system needs a fundamental change and improvement. It consists precisely that is necessary to decide a ripe task about improvement of medical care, simultaneous lowering the expenditures and providing all citizens of our country with goo care. This major problem brooks no further delay. It is generally known that health care in our country equates with small business, and all participants are interested, like every business, in receiving the highest possible profits.
Breaking up the medical care into small medical offices don't favor the development in this field and the fundamental medical tasks of lowering the cost of medical care by following reasons:
advanced medical technology can't be used in these offices;conditions don't exist for a high level of organized health services;doctors prefer to minimize the time for medical examination of patients;fee for service is not the best idea in this field.
The enumerated shortcomings in its turn lead to:
the growth of serving medical staff and administrative expenses;deterioration of efficacy of outpatient treatment, increases visits of patients and needless referrals to hospitals;aggregate increase of expenditures on medical care.
* * *
Under existing circumstances of irrational organization of medical care in our country, it is necessary to look for new structures to satisfy the requirements of contemporary reality.
Inevitably comes to mind a conclusion of advisability to reorganize the whole structure of medical care. Instead of great numbers of small unproductive medical offices it is preferable to organize large-scale multi profile medical clinics, each of them to be attached to a near hospital and working in two shifts.
These outpatients' clinics should be equipped with modern medical and information - computer technology, as well as contemporary laboratories, and carry out in them all necessary medical examinations, tests, procedures etc., considerably raising the quality of medical care and labor productivity of all medical staff.
Another important measure - fundamental change of existing payment system for medical doctors care. We offer the introduction of pay by the hour remuneration system in the form of rate of salaries. Salaries for doctors should be established in dependence with the qualification, confirmed every five years, exemplary 150-200-250 thousand dollars yearly. Besides that should be established a distribution of bonuses for successfully carried out surgeries and excellent medical treatments of patients. This undoubtedly will switch over the attention of medical doctors to quality health services for patients. In essence, only such radical changes can be called medical care reform.
* * *
It is advisable to set up a public, non-profit organization for medical care of the population of the whole country, with branches in all states. The leadership of the non-profit organization should be carried out by the best experts in medicine, science, economics, finances and public relationship. They must take full responsibility for the medical care of the entire population and the use of means for financing it. It must include effective mechanisms for controlling costs of medical care. All controversial questions should be decided between medical doctors-experts from this organization and treating doctors. This will be a managed health care system. Managed care reflects the country's distinctive approach to a universal human challenge. The cost of medical care must be contained. The rational for limit setting policies must be explicit and readily available to the public. The rational must show how the policy promotes good care for individuals and optimal use of available resources for the large population.
It is advisable to free the medical doctors from the necessity of insurance against cases of committing medical errors, lifting of them the heavy burden of unnecessary wasted expenses. Medical doctors, undoubted should carry the responsibility for committing criminal negligence in the performance of their duties, causing irreparable harm to the health of treating patients.
* * *
It arises a question. How to carry out the financing of health care in the new term?
The main thing and the only source of financing should be the use of a special tax for these purposes. It should be worked out a scientifically grounded percent of tax for the income of workers and profits of corporations and businesses, generating a fund, which should defray expenses on health care. To this fund should be directed the means from Medicare and Medicaid. Thus, all the means for financing medical care should be directed from the budgets to the public non-profit organization. This organization, in a proper way, should work out in detail an estimate expenditure of its budget. Within reasonable limits of this budget will be maintained the full medical care system.
A scientific institution of appropriate profile should work out such a budget. If one may put it that way, undoubtedly we can assume that the maintenance cost of medical care under the new favorable conditions will be considerably lower than at present time. It seems to us, that the proposed perfected system sets a shield to uncontrolled expenditures of medical care, which under the system of unlimited presentation of bills to Insurance companies, Medicare and Medicaid becomes similar to a snowball, uninterruptedly going downhill on the verge of disaster.
The system of medical care and financing of a new type should decide the topical problems of contemporary health care.
Universal Peace
The only way to end wars on earth is democracy. The entire world becoming democratic will mean the end of war and famine forever. Democracies don't go to war with each other. Countries that provoke global disturbances must be dealt with determinedly. Any nation unleashing military aggression must be punished at once. Aggression must have no alternatives for punishment. Weapons of mass destruction must be demolished.
War can be devastating and it can wreak chaos on entire societies for decades and generations. And sometimes no good even comes out of long years of fighting and staggering national losses.
War is genocide, torture, cruelty, propaganda, dishonesty, and slavery. It is hundreds of thousands of human beings dying years before their time. It is millions of people separated forever from the ones they loved. It is the destruction of homes for which people worked for decades. It is the end of careers. Other tragedies inevitably trail in the wake of war.
How to end war forever?
Radical actions must be undertaken worldwide by unified efforts. All countries must unite to establish a global security system. It is good to find world leaders to guide peace. Many people oppose war, but don't know how to take actions to stop it. Most reasonable people want peace and most would readily give their allegiance to a just and reasonable leader, who could end war, to a leader who always have their best interest in mind, a ruler mm keen wisdom and impeccable insight.
Peace is an occurrence of harmony characterized by the lack of violence, conflict behaviors and freedom from fear of violence. Peace also suggests sincere attempts at reconciliation, the existence of healthy interpersonal or international relationships, prosperity in matters of social or economic welfare, the establishment of equality, and a working political order that serves the true interests of all.
The Universal Declaration of Human Rights recognizes that human rights should be protected by the rules of law that just laws which uphold human rights are the necessary foundation of peace and security. Peace is when people are able to resolve their conflicts without violence and can work together to improve the quality of their lives. Peace is when: everyone lives in safety, without fear of threat of violence, and no form of violence is tolerated in law or in practice.
Everyone is for peace. No one is against it. Yet, how we assess whether or not peace is possible in our days? There is no way that America can make the entire world peaceful or, in fact, any part of the world except America itself.
Created to bring world peace, the United Nations appears helpless in preventing bloody conflicts. The UN is failing in its mission. The UN is not a world government. What was not yet tried is a world government.
There is no solution for civilization, other than the creation of a world government. World government is the notion of a common political authority for all of humanity. World government is the only way we will be able to control pollution, manage our limited resources fairly, and prevent destruction of the natural environment. A world government would involve much more than co-operation between nations. It would be an entity with state-like characteristics, baked by a body of law.
The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, thousands of pages of law, a large civil service and the ability to deploy military force. What we really need is some inspired, enlightened leadership.
All countries should be engaged in the world government with equal power votes. Settle any disputes with obligatory arbitration in World Court. Declare military aggression out of law. Provide the world government with power to impose global peace. It has to happen. In order to prepare a foundation for such global changes in the world order it is necessary to create an International Forum with the most qualified specialists and scientists with international recognition to set goals for the new world government in the areas of:
- Policy for security and peace on the planet;
- Economy that would provide industrial and technological growth;
- Commerce and finances that would provide free trade and credit system for large scale projects of development of all countries;
- Social development, education, healthcare, culture, all aspects for adequate development of nations;
- Environmental protection;
- creating defense alliances in every part of the world that will provide peace and security;
- Development of the Global Constitution that will lay a foundation for the world government.
This way, representatives of different countries will work together, and there is hope that there will be a favorable climate for understanding and for finding solutions to complex international problems. It is the first time that we will have a chance for a global democratic system, where the respect for human rights is not restricted by national borders and where the power of government is not local but global. It is established with the consent of all people. Whether we like it or not, human society is unambiguously globally interconnected. The elimination of the existing barriers between various groups, including national borders, languages, and cultural differences becomes a reality.
If we assume the responsibility for leadership in the world and the development of global affairs, then universal peace and prosperity will be dominant in the xxi century.
War can be devastating and it can wreak chaos on entire societies for decades and generations. And sometimes no good even comes out of long years of fighting and staggering national losses.
War is genocide, torture, cruelty, propaganda, dishonesty, and slavery. It is hundreds of thousands of human beings dying years before their time. It is millions of people separated forever from the ones they loved. It is the destruction of homes for which people worked for decades. It is the end of careers. Other tragedies inevitably trail in the wake of war.
How to end war forever?
Radical actions must be undertaken worldwide by unified efforts. All countries must unite to establish a global security system. It is good to find world leaders to guide peace. Many people oppose war, but don't know how to take actions to stop it. Most reasonable people want peace and most would readily give their allegiance to a just and reasonable leader, who could end war, to a leader who always have their best interest in mind, a ruler mm keen wisdom and impeccable insight.
Peace is an occurrence of harmony characterized by the lack of violence, conflict behaviors and freedom from fear of violence. Peace also suggests sincere attempts at reconciliation, the existence of healthy interpersonal or international relationships, prosperity in matters of social or economic welfare, the establishment of equality, and a working political order that serves the true interests of all.
The Universal Declaration of Human Rights recognizes that human rights should be protected by the rules of law that just laws which uphold human rights are the necessary foundation of peace and security. Peace is when people are able to resolve their conflicts without violence and can work together to improve the quality of their lives. Peace is when: everyone lives in safety, without fear of threat of violence, and no form of violence is tolerated in law or in practice.
Everyone is for peace. No one is against it. Yet, how we assess whether or not peace is possible in our days? There is no way that America can make the entire world peaceful or, in fact, any part of the world except America itself.
Created to bring world peace, the United Nations appears helpless in preventing bloody conflicts. The UN is failing in its mission. The UN is not a world government. What was not yet tried is a world government.
There is no solution for civilization, other than the creation of a world government. World government is the notion of a common political authority for all of humanity. World government is the only way we will be able to control pollution, manage our limited resources fairly, and prevent destruction of the natural environment. A world government would involve much more than co-operation between nations. It would be an entity with state-like characteristics, baked by a body of law.
The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, thousands of pages of law, a large civil service and the ability to deploy military force. What we really need is some inspired, enlightened leadership.
All countries should be engaged in the world government with equal power votes. Settle any disputes with obligatory arbitration in World Court. Declare military aggression out of law. Provide the world government with power to impose global peace. It has to happen. In order to prepare a foundation for such global changes in the world order it is necessary to create an International Forum with the most qualified specialists and scientists with international recognition to set goals for the new world government in the areas of:
- Policy for security and peace on the planet;
- Economy that would provide industrial and technological growth;
- Commerce and finances that would provide free trade and credit system for large scale projects of development of all countries;
- Social development, education, healthcare, culture, all aspects for adequate development of nations;
- Environmental protection;
- creating defense alliances in every part of the world that will provide peace and security;
- Development of the Global Constitution that will lay a foundation for the world government.
This way, representatives of different countries will work together, and there is hope that there will be a favorable climate for understanding and for finding solutions to complex international problems. It is the first time that we will have a chance for a global democratic system, where the respect for human rights is not restricted by national borders and where the power of government is not local but global. It is established with the consent of all people. Whether we like it or not, human society is unambiguously globally interconnected. The elimination of the existing barriers between various groups, including national borders, languages, and cultural differences becomes a reality.
If we assume the responsibility for leadership in the world and the development of global affairs, then universal peace and prosperity will be dominant in the xxi century.
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