History of the creation of a free economy
Thoughts have come up regarding what is primary, economics or politics, which decisions are causes and which are effects. In simplified terms, politics is about borders, how to delineate and why they should not be crossed. Economics, on the contrary, expands, develops and opens up. The very term free economy was introduced by Adam Smith, the founder of all economic theory.
In brief, the principle is to make as many spiral turns as possible with the same money within a particular territory. Each such spiral builds up a critical mass and brings us closer to the moment when money appears out of thin air – Carl's scary dream :-) Example, when “A” produced and sold milk to “B”, then “A” got money which he will spend on purchasing raw materials for the production of a new commodity. If he has a surplus of money supply, he has the opportunity to lend some at interest to “C”, who will take the money to produce furniture, produce and sell this furniture to “A”, “B”, etc. This is how the first spiral of money looks like. Further events develop in a spiral, as funds accumulate and interest on loans grows, as well as the volume of supply on them.
The next driving factor is the regulator, it either hinders or helps. It helps by providing market participants with an environment in which transactions are safe, the safety of funds is fully guaranteed, and markets are formed jointly. The regulator charges a rent, or tax, for these opportunities. So, these actions need to be performed in the same territory, without going outside the entity. The more such internal turns, the brighter the “sun shines”.
Each import operation leads to an outflow of money from the “system”. Under “import” is also understood trade outside the region. For example, Primo rye and Khabarovsk. In the case of exports it is a little easier, because there is an inflow of money, not an outflow. The same rules apply to regional budgets, the more they have “opportunities” not to leave the regions, the better it is for the principles of free economy. But the realities are still different.
Then this principle was elevated to an absolute by the British, it was described in detail by D. Keynes. Then there was a migration of brains and the U.S. built a society based on the teachings of J. Schumpeter. Schumpeter called this principle – creative destruction. Later, economist Stiglitz improved Smith's approach and received the Nobel Prize for it, and society continued to develop on these works, finding new and new ways. So, our view is that the engine of society is economics, and political decisions are based on economic expediency. In quiet times, economics seems like a conventional notion, theorized, but not when every member of society is involved in market issues.
Today, it is becoming popular to organize communities that form small free markets, locking consumption inside. Society is coming to life, all that is left is for the regulator to pick up the tails. And this issue also becomes realizable where there is a dialogue between society and the authorities, otherwise it will be ruined. If there was no such dialogue before, today the conditions have changed and neither society nor business can survive without it. Dialogue begins with microbusiness. Is the entrepreneur comfortable in the current conditions, and what is missing. We will see the answers to these questions in the near future.
The economy can only close within itself if free market conditions are introduced at every stage. The second scenario is full nationalization, which our parents and forebears went through, maybe we should try to go around the rake? And a lot of cool decisions are being made in this direction right now, but “a spoon is a spoon” to lunch, and we have a late dinner :-) The time for action has come, to think and unite, to get high from the process and evaluate the result, because forecasting today is not a noble thing. Does the theory of Smith and his colleagues work? Let us cite the following figures: 80% ($13.52 trillion) of the total world turnover is in USD, of this turnover 25% ($4 trillion) falls on the US domestic market.
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