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The Theory of the Socio-Economic Formations

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The Theory of the Socio-Economic Formations

Announcement

The following documents were developed by a professional economist as a result of many years of goal-oriented studies and analysis of the world's experience in the areas of economics and industrial relations:

1) The Theory of the Socio-Economic Formations, which is the foundation for,

2) The Concept of the Theoretically Most Optimal System of Industrial Relations, which, when implemented, can allow any state to achieve the theoretical maximum efficiency and stability of production, the highest rates of economic growth with a harmonious coexistence of interests of all the members of the society and the social security thereof.

The Theory of the Socio-Economic Formations explains the history of Russia, the pre-determination of its previous social revolutions and the cause of collapse of the USSR. Also, the jump in the economic development of the US and some countries of the Western Europe and Eastern Asia after the World War II, and the modern problems in the CIS states and other countries.

The Concept of the Theoretically Most Optimal System of the Industrial Relations contains analysis of the key problems in the economy of the CIS states, explanation of their causes and suggestions for their resolution, by means of the national monetary-credit and taxation instruments (using Belarus as an example). It includes the following blocks - concepts of subsystems:

- Concept of the theoretically optimal domestic (as well as international) currency as a powerful source for a state to attract investments;

- Concept of the theoretically optimal budget-taxation system as an instrument for the state to optimize and activate its national industry and ensure the lowest needs in the turn-around funds, the highest efficiency in resources usage, the highest influx of investments, the maximum competitive abilities of products and a no-deficit state budget.

- Concept of the system of theoretically optimal motivations for the employees towards improving the efficiency of work, increasing the company's profitability and developing the means of production.

- the approximate model for the internal-market reckoning and the optimal, from the point of view of the society, the state and the company, distribution of company profits.

The above analysis was used to develop a concept for a system of legislative bills that could allow for the optimization, up to the theoretically highest level, of the industrial relations and the liquidation of the economic causes for crime in any state.

Also, a program was prepared for a study course "Economic Mechanisms of the Modern Crisis and the Optimal Ways of Activation of the Economy of Any State" - for 20 academic hours, as well as plans for reports on key subjects and a methodical manual for the company's professionals (a book of 144 pages). In addition, substantial practical experience has been acquired in improving the industrial relations in companies.

The reason for the low production efficiency, the majority of social contradictions and the low level of living standards in many countries is rooted in the imperfections of the basic (original) relations that got established in the economy of these countries. But the understanding of the laws of social development is already becoming possible, and the experience of humanity contains everything necessary for building the highest level relations in any country, in terms of the economic efficiency and rates of social progress.

A state that will build its economy in accordance with the above mentioned concepts, will achieve the maximum of its abilities in tempos of growth of its national income and the wealth of its people. Especially relevant at this time, and very important for Belarus, Russia and other CIS states is the concept of common currency and the expediency of its launch in the CIS. The implementation of ideas concerning the mechanism of creating CIS currency, which has a principal novelty, will create a break-through in the CIS economy and will allow, in a very short period of time (3-4 years), to achieve, in every CIS state, record tempos of its rational development. That is, as long as time is not lost.

The main staples of the Theory of the Socio-Economic Formations ("Why We Live This Way, Where We Are and What We Are Heading Towards"), the Concept of Theoretically Most Optimal System of Industrial Relations and some other works of the author are presented on this site, in an abbreviated way. You can make your own opinion about them. But, first, you are urged to read the work by H.G. Chernyshevskij "Prejudice and Rules of Logic". This work is also made available on this site and is based on a 2 volume publication: v. 1, "Thought", 1986, p. 734-763, abbreviated - down to 5 pages.

These readings require concentration.

Translation by Olga Dovgel
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Introduction Letter


Mass media broadcasts about wars, terrorist acts, strikes and sufferings. Why is this happening on this unique planet of the Universe, where it is possible to ensure a decent life for EVERYONE? How can the world be made better? It turns out that there are answers to these questions.

A professional economist, as a result of more than 20 years of analysis of the world experience in the field of economics and production relations, has developed a THEORY OF SOCIO-ECONOMIC FORMATIONS. This Theory explains the history of the rise and demise of many states, the pre-determination of social revolutions, including the cause of the Soviet Union’s collapse, the post World War II jump in the economic development of the US and countries of Western Europe and East Asia, as well as the modern problems in these states. Based on this Theory the author has also developed a CONCEPT FOR CONSTRUCTING THEORETICALLY OPTIMAL PRODUCTION RELATIONS IN THE STATE by means of monetary and taxation tools.

This analysis of the Theory and Concept leads to believe that the experience of humankind and the modern level of development of the means of production can already provide everything necessary for constructing, in any country, the production relations of the highest level based on the parameters of economic effectiveness as well as public progress. The country which will build its economy with consideration to these conclusions will achieve the maximum of its abilities in terms of the growth of its national wealth and the well being of its population, with the optimum coexistence of interests of all the members of the society, their social protection and reliable pension provision.

The constructive potential of the Theory and the Concept is enormous. For example, by applying this knowledge it will be possible to make Iraq stable and grateful to the rest of the world, while currently it is being shaken by the explosions of bombs and the suffering of people and getting filled with hatred against the countries that are eager but not able to help it and are only adding to the problem with their good intentions.

This Theory and Concept make it possible to define and solve the task of creating a worldwide (interstate) government with the goal of rationalizing the production relations on a global scale based on the principles of the scientifically substantiated fairness, with the liquidation of epidemics, hunger, poverty, drug-business and illiteracy in the world.

The main provisions of the Theory, the theses of the Concept and information about the author and his economic works are published in Russian on the http://dovgel.com site. Submitted here for your attention is the English translation of just the main provisions of the Theory. This is an important, founding, work. It will be interesting to those who would like to understand the reason of eternally arising public conflicts, strikes and revolutions, to root out the poverty and illiteracy in the world, and to exclude economic factors out of crime, drug business and wars. It will appeal to the economists, but also all those, who debate the ethics of capitalism, socialism, communism, and other systems. In addition, it will also interest the people who studied or experienced life under the Soviet regime.

All new concepts, in any field of science, require unprejudiced initial consideration. For example, the work of Nicolaus Copernicus (1473-1543) “On the Revolutions of the Celestial Spheres”, which is common knowledge today, has not been able to get through to public consciousness for centuries and at first even produced wild objections. The first active follower of Copernicus theory, Giordano Bruno (who was born 5 years after Copernicus’s death!), was convicted of heresy and burnt at the stake of inquisition in 1600. Only four hundred years later (during the papacy of John Paul II), there came the official expression of "profound sorrow" and acknowledgement of error at Bruno's condemnation to death. The hope is that the current society, and especially the leaders (1st subjects) of the states, will take due interest in the Theory and will put it to use in good time for the best interests of the people.

This is NEW KNOWLEDGE of planetary importance. It holds a key to a new era: without hunger, war, revolution, and crime. The request to the readers is to help promote it for the public awareness and realization.

Sincerely,

Olga Dovgel,
Interpreter, supporter and daughter of the author
---------------------------------------
 

 

Feudalism, slavery, capitalism, socialism, communism

What meaning really hides behind these hefty words? Where are we? 

This theory explains the history of many states; the cause of the collapse of the USSR; the post World War II jump in the economic development of the US, countries of Western Europe and Eastern Asia; the modern problems in the CIS states... It contains the key to modeling of the most expedient production relations in enterprises, countries, and unions of countries with the goal of eliminating public contradictions due to the resolution of economic problems. 

 

«Find where it all started, and you will understand a lot»

Kozma Prutkov  (a fictional author in the Russian literature of 1850—60s whose pseudonym was used by a group of writers to publish aphorisms)

Requires concentration 
 

WHY DO WE LIVE THIS WAY,
WHERE ARE WE
AND WHAT ARE WE HEADING TOWARDS?

 

MAIN PROVISIOUNS OF THE

THEORY OF SOCIO-ECONOMIC STRUCTURES
  

Instead of the foreword

" There are known general needs, for example, in food, drink, clothes, etc., and the way that these needs are satisfied depends entirely upon casual circumstances. For example, the ground here or there is more or less fertile, years differ in harvest productivity, one person is hardworking while another one is lazy. But this swarming arbitrariness and everything, that seems absent-minded and deprived of sense, is ruled by objective necessity. Detection of this necessity is a task of political economy, a science, which gives honor to thinking, for it finds the laws working in the mass of accidents. It is interesting to track how all interdependencies have an opposite reaction here, how some spheres get grouped in a special way, influence other spheres and in turn experience from them assistance or hindrance. This interaction, which existence is not believable at first, for it seems, that all here is submitted to the arbitrariness of an individual force, is wonderful mainly because it has similarity to the planetary system which always shows to the eye only wrong movements, but which laws can be uncovered all the same."

HEGEL 

For thousands of years, people thought, that the Sun rotated around the Earth, and it was difficult to convince anybody of the opposite, especially the scientists in this area. 

" Most harm comes not from ignorance, but from the knowledge of a great many things which are actually not true." 

Frank KNIGHT 

" To find the truth, it is necessary to free oneself from the bias and the previously acquired representations."  

DESCARTES  


1. PUBLIC PRODUCT AND VARIANTS OF ITS DISTRIBUTION
IN BASIC (FUNDAMENTAL) RELATIONS OF PEOPLE 

During their lives people enter into various and multidimensional relations. These relations - material and spiritual - inevitably get public character; acquire a high degree of complexity and coherence.  

Among all the public relations, it is necessary to especially single out the relations of production: relations concerning manufacture, exchange, distribution and acquisition of the results of public production.  

A person, who, by virtue of public imperfections and personal abilities, has obtained a way to force work on other people and then distribute the results of public work and appropriate a considerable share of it; gets an opportunity to satisfy his (at times, unreasonable) needs more fully, to live more prosperously, interestingly, longer and to secure good conditions for his descendants. While a person, who does not have sources for existence, or is deprived of them, is doomed to public insignificance, dependence on other people, scarcity in his life and the life of his posterity, vulnerability to hardships and premature death.

 

It is apparent that relations of production are the most important public relations. They are basic (underlying) for formation of all other super linear public relations (political, ideological, legal, moral, etc.).  In other words:  

" The way of manufacturing the material life determines social, political and spiritual processes of a life in general." 

Karl MARX

 Relations of production are of two essentially different types: 

1) Relations, in which people are forced to work (physically or economically) with subsequent alienation from the results of their work. Since the most ancient times and till these days this type of production relations is still prevailing in the world, and is the primary reason for the majority of public contradictions on the planet; 

2) Relations, in which people work with self-motivation and participate in a well-grounded distribution of the end results of production. For many people, who are used to forced labor, such relations are hard to imagine. Nevertheless, they are no longer a rarity in the world, and evidently show higher efficiency. They are based on the understanding, that nowadays any result of public production is achieved by a joint action of certain factors: investment of accumulated capital, application of physical labor, creative and entrepreneurial abilities of individuals, use of the limited natural resources, creation of favorable public conditions, etc. All these factors can be taken into account and estimated; and consequently, it is possible, as well as politically and economically expedient (profitable), to model such relations of production in which exploitation of people is eliminatedSuch relations hold the hope for the future; only in such relations will it be possible to eliminate today's internal as well as geopolitical, interethnic and interstate contradictions in the world, which lead to the destruction of the planet.

 

In the relations of the first type, where there is compulsion of people to work and subsequent alienation of the results of their work; the subject (the person, establishment, organization) who has the ability to determine the character of production relations, force people to work and establish the order of distribution of the resulting products shall hereafter be referred to as the 1st subject of these relations. The subject (the person, establishment, organization) who is compelled to follow the character of production relations established by the 1st subject shall be called the 2nd subject of these relations.

 

In such relations, where there is exploitation of people, the produced product (W), in its socioeconomic essence, is divided into three parts.  

          

Where:

C - The part used further as the means of production;

V - The part, which the 1st subject leaves or allocates to the 2nd subjects for their needs;

Ψ - The part, which the 1st subject, as the exploiter, withdraws or leaves for any purposes under his own discretion (and, possibly, even with good intentions). 

 In the relations of the second type, there can also be the 1st subject, who determines the character of relations of production, and the 2nd subjects, who follow the established character of production relations; or all subjects can be equal in rights. The main distinction is that here, unlike in the relations of the first type, there is no exploitation of people. In such relations there is special accounting of all essential factors of production, with provisions for their maintenance, replacement or indemnification. And the end result of production (profit) is distributed between the subjects of production relations in a fair way, i.e., in a substantiated way and with the consent of the people, for example, in proportion to the contribution of funds into production or in accordance with other grounded principles, which do not cause public contradictions. In relations between the subjects, nobody has the role of the exploiter, and the exploiter type assignment does not arise. And consequently, in such production relations the resulting product, in its socio-economic essence, is divided not in three, but in two parts. (!) 

             

Where:

C - The part used further as the means of production;

θ - The part, which is distributed between the subjects of production relations in a fair, substantiated way, without public contradictions.
 

To the beginning of Theory

2. DISTRIBUTION OF RESULTS OF PUBLIC PRODUCTION
IN VARIOUS SOCIO-ECONOMIC STRUCTURES

Find where it all started… 

Now we shall analyze variations, or, in other words, forms of distribution of a public product, which occur in basic (underlying) relations characteristic for known socio-economic structures.  We shall review them in order from the primitive to the more advanced ones, investigating the essence of each form of relations and filling in the Table of Formations at the end of this section. 

1. Primitive relations of production. Such are understood to be the relations, which do not have any steady systematic character. Distribution of a public product in such relations is not carried out systematically. 

2. Feudal relations (per Marx - the Asian way of production). In the evolution of public relations, this is the first, simplest form of production relations to arise from the unsystematic primitive ones.  (Usually, at this point, the readers want to correct the author, because traditional school programs put feudalism above slavery.) The ancient nature of these relations was robbery and arbitrariness, the desire of some individuals to stand out, to acquire wealth by stealing, to force and control others. As a result, a severe and imperious 1st subject would come to light, who assessed the 2nd subjects (people, settlements, organizations, nations) with a tribute and who severely punished for non-compliance.  The 2nd subjects (servants) of these relations had to pay the tribute (Ψ – to the 1st subject) and maintain the means of production and themselves as a labor force (C+V – to the 2nd subject).  

The main characteristic of these relations is the arbitrariness of the 1st subject.  He executes and pardons; dictates tasks, norms, laws, and rules of behavior; and punishes if they are not followed.  This obstructs the creative potential of the people, because: 

“The person can work zealously only when nobody interferes with his work and nobody takes away the fruits of his work… You can be economical only when confident that you are saving for yourself and your family, and not for some predator. If this confidence is not present, the person hastens to spend quickly - even on vodka - that meager money, which he manages to get...”

Nikolay CHERNYSHEVSKY, “Superstition and Rules of Logic”, Mem., Vol.1, "Idea", 1986, pg. 734 - 763
 

But with the 1st subject taking an active role in production, when he sets tasks and rigidly monitors their execution, the feudal system can show a significant growth in productivity and an achievement of impressive results, such as the erection of the Egyptian pyramids. However, the initiative of the workers is bound to run out, and they have to be constantly monitored, threatened and punished, in order for them to be fearful and obeying.  

3. Slaveholding relations. It is obvious, that slaveholding system of production relations can grow only from the possession of unlimited force of the 1st subject over the 2nd one, as a dead-end of feudal relations. Under the systematic slaveholding production relations the entire public product (C+V+Ψ), including the portion consumed by the slave, and the slave himself as a means of production, is the property of the slave-owner. The slave receives nothing into his property. Slaves cannot work for the slaveholder with motivation and tend to rise up against such system of relations. 

4. Capitalist relations. Under these relations the 1st subject (capitalist) takes the means of production and the profit (C + Ψ) and allocates the remainder of the production results as wages (V) to the 2nd subjects (hired workers), at a rate of the market cost of their labor. The workers relate to the means of production and to the products of their work as someone else's property, and aspire only towards increase of their wages. 

5. Socialist relations. Socialism, according to the communist ideology, was declared to be the first stage of such public relations in which exploitation of the person is already eliminated, the results of production are for the workers, but the ownership over the means of production (C) does not yet have direct public character and belongs to the 1st subject (which, due to the stereotypes in thinking, was only envisioned as the state). 

“That during the transition to a full communist economy, we will have to use in wide proportions, as an intermediate link, the cooperative production, - Marx and I (writes F.Engels - E.D.) never doubted. But production should be organized in such a way, that the society - therefore (? - E.D.), initially, the state - could reserve the property on the means of production.”

Karl MARX, Friedrich ENGELS, Mem., Vol.36, Pg. 361
 

Following our approach, we will just note that under the socialist relations of production the resulting product is meant to be distributed in two socioeconomic parts (C – to the 1st subject and θ – to the 2nd subject), and not in three. 

6. Communist relations. They are outlined in Marxism as follows: 

“At last, we shall imagine... the union of free people working with the common means of production… All the results of work of the union of free people represent a public product. A part of this product serves again as the means of production. It remains public. But the other part is consumed as means of subsistence by the members of the union. Therefore, it should be distributed between them. The way of this distribution will change according to the character of the actual public-industrial organism and the stage of the historical development of producers.”

Karl MARX, Friedrich ENGELS,
Mem., Vol.23, Pg. 88

 

Here it is already clear that the entire product of work of the union of free people (W) was viewed as public, and divided in two parts (C and θ). Specifically: the means of production (C) were represented as public (that is belonging to the members of a society and the society as a whole) instead of state-owned, and the consumed part - as intended for distribution between the members of the public union. 

It is interesting, that according to the “Capitalist” ideology, capitalism gets transformed, as a result of the development of large industrial production, into an industrial society… which then evolves into a postindustrial society, where the level of intensification and complexity of production requires that attention be focused on the qualitative aspect of activity of the people and the personality of the worker. For example, a known American economist Ilya Stavinsky, in the 90s of the last century, in his book “Capitalism Today and Capitalism Tomorrow”, formulated the necessity for transitioning of the capitalist society during the epoch of automation towards the socially conscious management of the socialized private capital (with technological connections instead of the market ones, regulation of production and consumption, control of managers who are chosen by the stockholders). As it was reported in the press, these views were supported by the President of the USA, Bill Clinton, who thanked Stavinsky for his work, which recommended strengthening of social policies.

 As we see, in their basic views on the future of mankind, the differences between the Marxism and the Western socioeconomic concepts are rather conventional, verbal; in principle, one does not contradict the other. All agree that individualism is to be replaced with the joint activity of people. The main thing is seen in the necessity to create such public conditions where the antagonistic contradictions would be eliminated and where a high level of motivation would be created for everybody to participate in production and increase its efficiency. 

“The main thing is who gets to keep the results of work.”

J. Mill
 

 Now let us analyze and comprehend the filled out table. 

Table of Formations:
Distribution of the Results of Public Production in the Basic (Fundamental) Relations Characteristic for the Identified Socioeconomic Structures 

Relations of Production

Subjects of Basic (Fundamental) Relations

1st subject

2nd subject

Primitive

There is no steady system of production relations

Feudal1)

Ψ

C + V

Slaveholding2)

C + V + Ψ

-

Capitalist

C + Ψ

V

Socialist (Industrial Society)

C

θ

Communist (Postindustrial Society or Social Capitalism)

C and θ,
production has an advanced public character; the product is distributed as a result of relations of free people

Notes: 

1) It is especially difficult to understand the essence of feudalism, as, outside of the system representations, the term ‘feudal’ was even applied to a landowner in Europe, who was receiving the rent from formally free peasants. However, in this case, when the 1st subject owns the land as the means of production (C) and withdraws the rent (Ì), we no longer have the feudal relations (see the table), but the primitive capitalist relations. For feudal relations, on the other hand, the main characteristic is that the feudal lord does not associate himself with the concept of property. He dictates the conditions, without regard for the rights. He raises the tribute (Ì) not for something, but because of the existence of the power of force. Ghengis Khan is a vivid example of a feudal lord from the point of view of this theory. While racketeering of entrepreneurs is an elementary example of feudal relations in modern times.  

2) The slave receives means for existence (V) not in his property, but as working cattle.  

We can draw the following conclusion from the carried out analysis: 

THE DISTRIBUTION OF THE RESULTS OF PUBLIC PRODUCTION IN BASIC (FUNDAMENTAL) RELATIONS OF PEOPLE CHARACTERIZES THE ESSENCE OF ALL FORMS (STRUCTURES) OF THESE RELATIONS. 

This conclusion is deemed serious and very important! 

Let us analyze, in the view of the drawn conclusion, the specific economic relations, which had a place in recent times in the former Soviet Union and are still in the memories of the living generations.


To the beginning of Theory


3. WHAT SOCIAL ORDER WAS BUILT
IN THE SOVIET UNION?

  “Society with unpredictable past.”

A publicist of the times of the Soviet Perestrojka (“Reorganization” started in the USSR by Mikhail Gorbachev in 1985 – O.D.) 

We are exclusive people, we belong to those nations which do not appear to be part of mankind, but exist only in order to give the world some scary lesson.”

Peter CHAADAEV  

Let us consider a few examples of relations, which existed in the USSR between subjects at different levels of social production. 
 

Relations: ENTERPRISE (ORGANIZATION) – WORKER  

The 1st subject who determined the terms of relations was, certainly, the enterprise. The 2nd subject in these relations was the worker. The part of the made product (C+V+Ψ), which served for replenishing of the means of production (C), went to the enterprise. The remainder was shared: V – to the worker, Ψ – to the enterprise. 

What do we have?  The 1st subject – (C + Ψ); The 2nd – V, ....? 

Are these socialist relations? Refer to the table...  

As we see, the enterprises and organizations of the country exhibited basic capitalist relations, with just one peculiarity that the role of the capitalists in these relations was carried out by legal entities.
 

Relations: STATE – STATE ENTERPRISE  

The proprietor of all the enterprises in the country was the state. Plans, limits, funds, prices, tasks for shipments – all this, throughout the country, was determined and communicated to state enterprises from above, through the ministries, as state directives. Each ministry, as an authorized state representative, communicated to each of its jurisdictional enterprises the plan for production in all its parameters (C+V+Ψ).  It had the right to take C (a shop, machinery, transport, material stocks, depreciation accounts, etc.) away from the enterprise or, on the contrary, transfer it to the enterprise from another one. The ministry also defined - V for the enterprise (everything it was allowed to use for its operation: funds for development, wages, material incentives, social development). And it also drew up plans of all deductions to the state (Ψ).  

What do we have?  The 1st subject - (C+Ψ); the 2nd – V, …again, capitalist relations. 
 

Relations: STATE – COLLECTIVE FARM 

These relations in the country had important specificity. The matter is that the proprietor of the means of production in the collective farm was the collective farm. Here is how this principal position was explained by Joseph Stalin: 

“If we take, for example, a distinction between the agriculture and the industry, we draw it not only because the working conditions in agriculture differ from the working conditions in industry, but, first of all and mainly, because in industry we have public ownership over the means of production and the products of production, whereas in agriculture we don’t have public, but group, collective-farm property.”

Joseph STALIN “Economic problems of socialism in the USSR”, State publishing house of polit. literature, 1952, pg. 65. 

And what did the state receive? This, too, was precisely explained by Joseph Stalin: 

“During the bourgeois rule in our country, the industry, transport, etc. was developed usually due to loans… But these loans were enslaving. We have a completely different situation during the Soviet rule. We are building the Turkmenistan railway, which requires hundreds of millions of rubles. We are building Dneprostroj, which also requires hundreds of millions. Do we have here any enslaving loan? No, we do not. All this we are doing due to internal accumulation. But what are the primary sources of this accumulation? There are two of these sources... first, the working class creating valuables and moving the industry forward; second –the peasantry.

As far as the peasantry, we have it in the following way: it pays to the state not only the usual taxes, direct and indirect, but… it also over-pays on rather high prices for the goods of the industry - this is, first; and more or less under-receives on the prices for agricultural products – this is, second. This is the surtax on peasantry in the interests of raising the industry, which serves all the country, including the peasantry. It is something like a "tribute", something like a super tax, which we are compelled to take …  

Why do I speak about it? Because some comrades seem to not understand this indisputable thing.”

Joseph STALIN, from his speech to the Central Committee of All-Russian Communist Party of Bolsheviks on July 4-12, 1928. “About industrialization and the grain problem” Mem., V.11, Pg. 159.  

As we see in the “state – collective farm” relations, the state withdrew from the collective farm’s product (C+V+Ψ) “something like a tribute", that is a tribute (Ì).  The other two parts of the product (C+V) were left to the collective farms. 

The 1st subject - Ψ; the 2nd subject - (C+V) …feudal relations. 

Therefore, agriculture in the USSR developed more slowly, than the industry.

It is necessary to emphasize, that these were the relations between the state and the collective farms, as legal entities; they did not spread directly to the people, who worked in collective farms and other organizations. Because the “state –person” relations in the country, for all the people, were qualitatively different. We shall analyze them below.  

Relations: STATE –PERSON (CITIZEN OF THE COUNTRY) 

“The first duty of those who want to search “the ways to human happiness” is not to fool themselves, but to have boldness to recognize frankly that, what it is.”

Vladimir LENIN  

That the means of production in the USSR could not be the property of any individual citizens is all clear from the theory and practice of the former USSR. But what did the people receive for their work in state enterprises and collective farms?  It was paper money, which, first of all, was not even accepted in any other country, as it was not convertible. On the other hand, taking this money abroad was strictly forbidden. Because it was intended only for the purposes of internal state distribution of the means of consumption, and, at times, it did not even mean anything without the attachment of cards, lists, coupons, etc. With this money it was possible to receive only products and consumer goods inside the country. 

Could the person from the USSR, when going abroad, take with him anything from his valuable accumulation for selling, or even take sausages and vodka in quantities more than he was allowed to eat and drink there? Could anybody leave the boundaries of the country at all, if the agencies, which prepared the exit permits, had even the slightest doubt that he might not return from abroad? Or could he even take away his share from the collective farm and leave the village per his own desire? No, the person had no private property in the country, and he, too, was the property of the state. 

The 1st subject - (C+V+Ψ); the 2nd subject - (-) ... slave-holding relations! 

The essence of this unique political-economic phenomena is that in the country, which was considered socialist, instead of the state ownership over the means of production and the “conditions for free development of everyone, as a condition for the development of all” (according to the Communist and Socialist doctrine); there was a state ownership over all public product and all people as the labor force. All other relations involving people in the country were on top of this economic basis.  In other words, with the most progressive aspirations in ideology, the economic basis of the society was built in the system of state slave holding.
 

To the beginning of Theory
 

4. LAWS OF DEVELOPMENT
IN THE HISTORY OF RUSSIA AND THE USSR   

In the briefest features, concerning only the tasks of our research, we shall note in chronological sequence the major stages in development of public relations in the history of Russia. 

The history of Ancient Russia from the moments of the first mentioning of Slavic tribes up until the invasion of khan Batyj in 1237 is the period of unsystematic public relations and princely strives. 

What followed next was almost 250 years of Mongol-Tatar occupation (Yoke), during which, in conditions of extremely precise feudalism, several generations of Russian people and their rulers changed. This period left a very deep trace on all the subsequent history of Russia. 

“Traditions of all the dead generations gravitate, as a nightmare, above the minds of the alive.”

Karl MARX 

During all the subsequent years, up until 1917, Russia reproduced a feudal form of state system with insufficient ferocity of its governors. And the entire history of Russia during this period is a history of revolts, uprisings and riots, as a result of the people’s soulful rejection of the relations of feudalism and their constant aspiration to liberation. The relative calming of national uprisings in Russia and the jumps in its economy took place only during the times of the most severe despotism of Ivan the Terrible and some other rulers of the country when their behavior had a closer correspondence to the necessary role of the 1st subject of feudal relations. 

And, finally, the last of the Russian emperors ascended to the throne - Nicholas II. The person who was not ready to be the Tsar, who was weighed upon the necessity to govern, and was inconsistent in actions.  He allowed for Rasputin phenomena, executed strikes and manifestations without analyzing their causes.  Yet, at the same time, he showed certain tolerance to freethinking and democracy. The exit of national energy, not being completely suppressed, gave a certain splash in industrial - economic development of the country. But it also weakened the imperial feudal authority in Russia, leading to its defeat in the Russian-Japanese war of 1904 – 1905 and to the revolutionary events of 1905, which, resulted in adoption of the imperial Manifest on October 17, 1905, allowing for the formation of political parties and the foundation of the State Duma, which the Tsar kept disbanding and re-assembling, announcing it to be either a consulting or legislative body. What turned out was democracy in the conditions of feudalism.  The country got flooded with meetings, strikes, elections and mutinies. By 1917 the February revolution has ripened as a result of which the Tsar renounced his throne and the country found itself in the conditions of unsystematic public relations. 

It is easy to argue and condemn today… But we ought to keep in mind that: 

“Reasonable argumentation is possible and perspective only until the emotional intensity of a situation has not stepped over a certain limit. However, as soon as this emotional intensity reaches past a critical level, the possibilities for reasonable influence disappear. In their place there come slogans and chimerical images, which, developing, conduct to mental epidemic. In such conditions the associative elements of the population, which during the domination of common sense would hardly be tolerated, are put forward.”

Carl JUNG, Swiss psychologist and psychiatrist.  

Wouldn't it be better to imagine what was then happening in the big country which was at war with more than ten states and which had famine, epidemics, robbery, civil war, illiteracy and revolution. 

A Russian philosopher Nikolaj Berdjaev, historian, emigrant, who suffered a lot through the Bolsheviks, but who kept his objectivity as a scientist, as a result of his research came to the opinion that “ Russian communism is a transformation and deformation of the old Russian messianic idea. The communism in Western Europe would have been an entirely different phenomenon”.  

“I was convinced that the fault and responsibility for the horrors of the revolution laid, first of all, on the people from the old regime and that they were not to be the judges of these horrors.”

Nikolaj BERDJAEV  

He also thought, that the Tsarism, as a matter of fact, was not overthrown by anybody, the Tsarism simply decayed and fell by itself because nobody wanted to support it. After this, Russia found itself in unsystematic conditions; it was in danger of full chaotic disintegration. A historical merit of Bolsheviks was, if we are to put emotions aside, that they found the slogans, which many believed in, and the methods, which people obeyed. Bolsheviks rescued Russia as a state, having paid much for its sake as a sacrifice. 

As a result of the revolution, the people who came to power in the country had neither the knowledge in the subjects of micro or macroeconomics, nor the experience in state management. 

The first five years of their management (1918 - 1923) is the period of chaos and the most polar swaying in economy from communes, military "communism”, forced hard labor and up to NEP (New Economic Politics - O.D.).  At last, Lenin, during his grave illness, may have had “enlightenment".  Hear out what he said in his last works on economic subjects “About cooperation” and “Better less, but better”, which he dictated shortly before his death:

“… I was already then proving, that the state capitalism would be higher than our modern economy; …our apparatus is no good, it is borrowed by us entirely from a former epoch;  and at the same time we are compelled to recognize a radical change of our entire point of view on socialism;  

Before us … there is a task of alteration of our state apparatus, which has been borrowed by us entirely from a former epoch.”  

“It is necessary to take to mind in time …It would be most harmful here to assume that we know something or that we have some significant number of elements for constructing a really new apparatus which would really deserve the name of socialist, Soviet and so forth… Here nothing can be done with impudence or push, vigor or energy, or any best human quality in general.  And here we should not forget, that … we are still too often inclined to compensate knowledge (or to think, that it can be compensated) with diligence, haste and so forth… It is necessary, at last, to begin approaching it differently… In essence, the issue here is as follows: either we show now, that we have seriously learned something in the business of state building (it is not a sin to learn something in five years), or - that we have not ripened for this purpose; and then we should not take on this business.  

… Declare competition right away for drawing up two or more textbooks on the subject of organization of work in general and special administrative work… Send several competent and diligent persons to Germany or to England for gathering literature and studying of this issue… to America or to Canada…”

 

However, it was already too late for Lenin, and not very clear for his colleagues. 

“It is impossible to completely understand Marx's "capital" … not having studied and understood ALL the Logic of Hegel. Hence, none of the Marxists understood Marx half a century later!!”

Vladimir LENIN  

And in the mean time, the post-revolutionary country was suffering from famine, cold and ruins; the peasantry was rising on riots, workers – on strikes …already against the new authority. And here, in due place and due historical moment, appeared the one who was capable, as nobody else, to fit the representations of the revolutionary proletariat, rebellious soldiers and the poorest peasants about the order, discipline and “fairness” in relation to the exploiters. Stalin, a person with steel will, but without any production experience or economic education, who had been hardened by his personal life, executed, as well as he could, “Lenin's political testament” and "Marxism", having understood them in his own way. 

Stalin "shook up", with a steel fist, the apparatus of the state, which was “borrowed entirely from a former epoch”, clearing it from "the harmful elements"; established dictatorship in the country, carried out Bolshevik’s cooperation of peasantry, etc. He used the Communist party of Bolsheviks as an instrument for the construction of a new, unbeknown to the world, system of socioeconomic organization. 

“The party is needed by the proletariat to win the authority and to hold the dictatorship. The party is the instrument of dictatorship of the proletariat.”

Joseph STALIN. “Questions of Leninism”. Publ. 11, OGIZ. State publishing house of polit. literature, 1947, pg. 72.  

Private property, instead of its development and removal of its negative features, with preservation and multiplication of the positive ones, was violently "abolished", at times, with physical destruction of its owners; and replaced with primitive-general nationalization. Marx had only sharp critical regard for this type of a society as “rough communism” or “barrack communism”. 

 “That such abolition of private property is not at all the real mastery of it, is visible right from the abstract denial of all the world of culture and civilization, from the return to the unnatural … to simplicity of poor, rough person, who has no needs and who has not only failed to rise above the level of private property, but who has not even grown up to it.”

Karl MARX, Friedrich ENGELS.
Mem. V. 42, P. 115  

After only a few years of Stalin's efforts, the first ‘five year’ plan was adopted in the country. Tasks were established for everyone along with the evaluation for their performance. A real evaluation! If one was 10 minutes late to work - three years of camps. Took a stem of grains from a collective-farm field - 10 years of camps. It was directed to ensure the fulfillment of the state plan, but if one failed – to the wall for execution! That is, the basic (production) relations that were built in the country corresponded precisely to the relations where the 1st subject (state) got C+V+Ψ, and the 2nd subject (-), i.e. only what was allocated to him for a controlled restoration of his labor force. And the business went up! 

Stalin managed to lift the country from a primitive chaos in which it found itself after the revolution. And he managed to construct a HIGHER SOCIAL ORDER, than the canned Ghengis Khan-style feudalism in which Russia had been for ALMOST SEVEN CENTURIES prior to the February revolution of 1917. And at the same time, the state cared for the workers. The improvement of the life of workers was declared to be the main objective of the state. The standards of life began to improve; people became accustomed to the discipline and hypocrisy, and started singing songs. Those who obeyed the authority and were of more use to the state, received extra food allotments in special distribution facilities and better medical care. 

And who, at that time, knew anything better than that? It was the time when the whole world experienced deep crisis and wreckage of out-of-date socioeconomic systems. In the beginning of the 1930’s, for example, in the USA, the industrial production fell down by 48 percent; a third of the farmers went bankrupt. Because of insolvency, 5 thousand banks closed. Almost 14 million workers and clerks found themselves without jobs and financial aid. Revolution there seemed inevitable. 

At the same time, Stalin's propagation was broadcasting to the world about the formerly unseen high rates of growth of "communist" industry in the USSR. Successes, for sure, were real. For example, in Belarus, according to the official statistics (which likely means, with some exaggeration), during the first five-year plan (1928 - 1932) the worth of fixed assets increased 4 times, the capacity of electric power stations – 4.2 times, the total volume of production – 4.7 times. 27 hospitals and 40 ambulance stations and clinics were built; the number of offices of public health services at enterprises increased 5 times; 1492 village and regional club houses, 151 clubs and 931 stationary libraries opened up; the number of film projectors almost tripled. The salary of workers and employees more than doubled, commodity circulation increased 4 times. Throughout the country, in a counterbalance to the “decaying bourgeoisies”, the prices on produce were getting lowered not once but even several times per year, the introduction of the world’s shortest 7-hour working day began without the reduction of wages, the obligatory free-of-charge elementary education for children of school age was introduced. The first five-year plan was executed in four years, the second one (1932 - 1937) – in three years. Including, unfortunately, the plan for “catching rogues and enemies”. A lot of innocent people were lost, and that, of course, cannot be justified.  

But it is also important to listen to the following opinions: 

“What kinds of interviews do some former members of the Political Bureau give and what kind of memoirs do they write. Nonsense type, petty… Give ideas. Ideas! Essence! Contents! ... We have been having Reorganization all the time. I am for reorganization, for innovation, for new introduction. But it is necessary to go in stages… Joseph Vissarionovich (Stalin – OD) was a very cautious person. Very cautious. He saw far out. Saw a lot. He saw… If you only take one question: war with fascism. What would have happened with Russia, with the USSR if we had not carried out in 10 years a struggle, which would have normally required 50 - 60 years? What would have been with Russia? It would have been crushed for 500 years, worse than under the Tatar yoke. That's what would have been with Russia. And now they criticize: that, another, fifth, tenth…”

Lazar KAGANOVICH, close colleague of Stalin, one of the active organizers of reprisals of 1930- early 50s, shortly before his death (1991ã.), in an interview to N.Leontjev  

Really, what would have been with Russia, Europe, the world, if the outcome of the Second World War had turned out differently? Nobody knows the answers to these questions. And consequently, it is necessary to ascertain, that Stalin played his role in the history of the country not worse than any other of the rulers prior to him, for example, Ivan the Terrible. His country managed to deflect the aggression of the greatest force of global terrorism of all times and won the Great Patriotic War of 1941 - 1945. 

It is nowadays that we talk about democracy, rights and freedoms of persons.  But back then very different ideas dominated the minds of politicians of the most powerful country of Europe and its allies: 

“The strong one is obliged to dominate over the world and to press the weak one… there is no common right for everybody, Germany will either reign above the world - or will become nothing”.

Adolf HITLER  

The world shuddered, when these ideas went to practical realization.

To the beginning of Theory
 

5. DEVELOPMENT OF CAPITALISM AFTER
THE CRISIS AND THE SECOND WORLD WAR

 Perhaps, of the most importance to the world was that the lessons of the Russian revolutions were useful for other countries. It made them seek reasonable solutions for public contradictions so as not to force workers towards the overthrow of public foundations. 

"It is necessary to condemn capitalism … It is also necessary to condemn totalitarian communism. It is necessary to find the third way - participation … through "the association of the capital and work", by associating the workers to the shared capital and the profit of enterprises."

Charles Då GAULLE,
President of France, 1968.  

"The person of labor is not simply an instrument of production, but also a person, who in the production process has a priority over the invested capital. By the very act of his work the person becomes the master in his workplace, the owner of products of his work and their distribution."

Pope JOHN PAUL II, 1983.  

These are, truly, great ideas! High production efficiency is achieved when there is sufficient motivation for working and developing the means of production. As a result of a civilized realization of these ideas, many countries are already enjoying qualitatively high basic relations.  

The first attribute of such progressive relations is the taxation of property (real estate) and land (further referred to as property), which was a major tool of a well-known Marshall’s plan and which is used now in the most advanced countries. The essence of these taxes is the de-facto recognition of the status of public property on all the material assets in the country. That is, the society (the state) has taken on the role of the 1st subject and, via the laws of the country, has determined (delegated) the rights of the citizens and organizations to certain assets.  It has also established reasonable limits to these rights as well as the protection of the rights and the limits by special institutions.  

These “intelligent” taxes, by means of market mechanisms, without force, in a socially favorable way, redistribute the means of production for the benefit of those who can ensure their most effective usage (with the highest profit). Those, who are not capable of achieving a due level of effectiveness of the property in their usage, face the need to transfer (sell or give) this property to more effective business executives. Under these conditions, small business automatically gets a privilege: the enterprises with small property have small taxes, too. Also, these conditions motivate all the subjects of production to get rid of their immobilized resources and strive to increase the rate of return from their means of production. In fact, this tax can even be declared as voluntary, with a condition: the one, who does not pay the tax necessary for the society to maintain the state, does not get protection of the property by the state. While those, who do pay the property tax, have the right to their property guaranteed by the state; and in case of their property’s destruction or damage can get certain compensation.  

This is a manifestation of reasonable socialist production relations. But they can be manifested in other forms as well, for example, in the enterprise’s usage of loan capital, which is characteristic for the Japanese economy. The means of production together with the part of the product, that serves as their replenishment, (C) are the property of the bank; while the consumed part of the product (θ) is left for the manufacturers: managers and workers. In such relations nobody aspires to collect the means of production just to have them in stock. On the contrary, everybody tries to get away with the minimum of the necessary assets and to raise the efficiency of production. And consequently, the Japanese economy has a high rate of return. 

Another, even more widely seen, example of socialist relations is the renting and leasing of property in free relations: the 1st subject is the proprietor of the means of production (C), and the 2nd subject – the proprietor of the produced product (θ). 

In major spheres of public production of the industrially advanced countries, the private-capitalist property has long ago succumbed the dominating place to the joint-stock property, and, as a rule, with participation of many workers. This is an even higher form of nationalization of the means of production. As noted by Marx, the capital in joint-stock companies attains: 

"…direct form of the public capital (the capital of directly associated individuals) as opposed to the private capital … It is the abolition of the private capital as private property within the very framework of the capitalist way of production".

Karl MARX, Friedrich ENGELS.
Mem., Vol. 25, Part.1, Pg. 479.  

With the development of forms of labor participation of workers in the profit sharing of their enterprises (in addition to the salary payouts) we already get the "enterprise - worker" production relations of the highest level, i.e., communistic in theory.  Such relations are no longer rare in developed countries.  Here are some facts. 

In 1952, under the initiative of Konrad Adenauer, the Bundestag of Germany passed the law "About organization of enterprises", in 1953 - the law "About cartels", then a number of other statutory acts.  This empowered workers to become co-owners of enterprises and their representatives -- to receive the right of participation in management of the enterprises. 

In France, the ordinance of August 17, 1967 (the supreme statutory act of the state; became effective as of January 1, 1969) made it obligatory for the personnel to participate in the results of their company's activity if the number of employees exceeded 100 persons; other companies were encouraged to do it on a voluntary basis. 

Between 1973 and 1989, the Congress of the USA approved 17 federal acts, which resulted in an active growth of the number of companies with the shared property of workers. There are already tens of thousands of such companies in the USA; and millions of people own shares in enterprises and banks. 

Japan has very advanced forms of calculating workers' welfare based upon their labor contribution, years of service, level of qualifications, quality of work and the general result of the company's activity. At the same time, the right to private possession of the capital has an ever-decreasing value. In addition, a major principle is getting implemented and developed there: separation of the property right from the management functions. As a result, the decisive role in managing the production is getting transferred to a layer of experts - managers. Another well-known specific feature of Japan is the system of lifelong employment, which has a very important social value. Not of lesser importance are the systems of relations between the managing personnel and other workers, the so-called systems of "communication and consultation" or "managing systems on the basis of cooperation". 

Taxation of enterprises’ profits minus the part which "serves again as the means of production", and taxation of physical persons’ incomes minus the part which is necessary for replenishment of their labor (a tax-free minimum living wage) is an element of production relations of the highest level already in the relations between the state and its enterprises/citizens.    

So, as surprising as it may be for both, "capitalists" and "communists", to read the conclusion here, it is necessary to ascertain that: capitalism in the economically advanced countries today is only a traditional word used as a tribute to the irrevocably gone history.  In reality, however unnoticeably for the public awareness, in the countries with the highest levels of production efficiency and standards of living (the USA, Finland, Netherlands, Switzerland, Ireland, Germany, Canada, France, Japan, etc.), capitalism has in many ways already transformed itself into socialist and communist relations.  

"I saw the "slaves of capitalism", they live well.”

Nikita KHRUSHCHEV,
former head of the USSR

As far as the USSR is concerned, applying the definition of a socialist country to it was unsubstantiated. 

"Culture and law cannot be higher, than the economic formation, on which they are based."

Karl MARX

To the beginning of Theory

 

6. THE REASON FOR DISINTEGRATION
OF THE SOVIET UNION

 The USA together with NATO, SEATO, CENTO, etc., were probably making various "perfidious" plans against the USSR (as well as the USSR did, together with its allies under the Warsaw Pact, against the former); but that was not the reason for the disintegration of the country. 

What happened in the history of the Soviet Union was similar to what had taken place in Russia in 1905 - 1917. Because of the inconsistencies between the ideology (communism, social justice, freedom, equality) and the slaveholding socioeconomic basis in the country, by the time of Stalin's death, there was no person in his environment who could adopt his methods of state management and become and adequate 1st subject in the system of state slavery.  This led to the economic, political and ideological crisis in the USSR. 

"I reject these terms - capitalism, socialism, I deem them to be very conditional. I do not know, what capitalism is, I do not know its basic principles and attributes. I don't think, anybody knows what socialism is, either. It is still only an idea.”

À.N. YAKOVLEV in 1992, former member of the Political Bureau, Secretary of the Central Committee of the Communist Party of the Soviet Union for Ideology, one of the main initiators and ideologists of Gorbachev's Reorganization.  

Having rejected the Stalin’s system which was in the economic basis of the country, and not imagining any other system to replace it, the ideology brought the country to the “free market”, the union agreement, “socialism with a human face”, etc., thus expediting the society towards an unsystematic condition. 

“If the thinking collapses, the order also collapses.”

CONFUCIUS 

“Each human business goes successfully only when it is guided by the mind and knowledge.”

Nikolay CHERNYSHEVSKY  

Many have already forgotten the enthusiasm, which almost everyone felt when listening to Mikhail Gorbachev's speeches in 1985 - 1988.  Now he is seen as the originator of the breakdown of the USSR.  And rightly so. But what exactly was his fault? Was it that, having learned the secrets of NKVD (People's Commissariat of Internal Affairs - O.D.) and GULAG (Chief Administration of Corrective Labor Camps - O.D.), and having realized the essence of Stalinism, he felt the need to liberate his people in his country, and by that broke the laws of the Stalin’s SYSTEM? The admission of democracy into slavery brought about the explosion of the creativity of the people, prompted meetings, debates, elections and strikes. People started to reject and perfect the system; thousands of laws, rules and stipulations were passed. 

“Who undertakes individual issues without the preliminary resolution of the general ones, will inevitably continue to unconsciously "stumble" against these general issues. And to stumble against them blindly in each individual case means to doom the policy to the worst swaying and unscrupulousness.”

Vladimir LENIN  

“The result of the opposite creative actions is chaos.”

Ron HUBBARD  

As a result, there was a sharp fall in production volumes, followed by the issuance of "empty" credit money, their inflation and destruction of the public basis of the country with disintegration of the state.
 

To the beginning of Theory
 

7. WHERE ARE WE?  WHAT PRODUCTION SYSTEM
ARE WE OPERATING IN TODAY?  

Naturally, after an unsystematic public state (which, for example, happened after the collapse of the Soviet Union), as a result of a spontaneous course of development, when the laws of this development are still not understood, the relations of the state and its subjects can only transition to feudalism, when the public product in relations of production is distributed per formula: 

The 1st subject – Ψ;   the 2nd subject – (C +V),

Feudal relations prevail in many modern states of the world. They are, certainly, at higher levels than in the days of Tutankhamen, Ghengis Khan, Ivan the Terrible, Hitler, etc.; with greater or smaller degree of adequacy of the 1st subject to the character and essence of these relations. 

Feudalism in the relations of the state and its economic entities is the main reason for the economic problems in many present-day countries.  It is evidently shown in the tax systems of these countries, where taxes are taken solely with a fiscal purpose; and where the extremely powerful taxation tools are not used with the intention of activating the economy and influencing the subjects' activity. By means of such taxes, the enterprises are deprived of their share of amortization, and the workers – of the necessary wages; the competitiveness of products is reduced; the need for turnaround means is increased; producers lose the ability to flexibly adjust the prices, that is, to bargain in the markets in relation to their competitors from more advanced countries. 

Such taxation renders adverse effects on these countries’ economy: manufacturers experience decrease in sales volumes and production profitability, and increase in losses and non-payments, including against their tax liabilities. As a result, a budgetary deficit is created, which these countries then try to beat with extra emissions of national currency, creating inflation and demonetization of national economies, giving rise to the primitive barter and inducing their population, enterprises and banks to accumulate foreign currency.  

The basic (underlying) relations in each of modern states are still far from perfection.  
 

ABOUT THE PRACTICAL IMPORTANCE OF THE GIVEN THEORY OF SOCIOECONOMIC STRUCTURES 

One of the best-known Western Public Science concepts, which were criticized during the days of the Soviet Union, was the theory of convergence.  Its representatives (J. Helbreit, U.Rostow, J.Tinbergen and others) asserted that the most determining feature of the social development was the tendency towards the rapprochement of "socialism and capitalism", smoothing of economic, political and ideological distinctions between them and gradual synthesis into a more perfect "mixed society". It seems that, ultimately, convergence will manifest itself: the world is gradually moving towards new levels of public organization based on the principles of freedom of the individual and respect for his rights. The key to making this organization a reality, in our opinion, is the above-presented Theory of Socio-economic Structures. It allows to comprehend the reasons for the crises of the fallen states and to explain the major problems of the modern ones; to foresee new serious problems in some of the largest modern states and to offer rational ways of their resolution in the interests of the planetary stability, eradication of primary causes of animosity between peoples, terrorism, narcotics and new revolutions. 
 

WHAT CAN BE DONE? 

Those who have understood the essence of this work, naturally, have a question: "And how practically is it to rise from an existing level of public conditions in the country to a level with the best efficiency of production relations?"   

It should be noted that revolutions cannot be a rational method for transforming production relations in the country.  Because they destroy the existing system of relations and impede the development of the society, throwing it back to the unsystematic state.  We do not need new revolutions. 

“A gradual abolition of slavery is better than sudden”

HEGEL 

To transform a state in a rational way is only possible by means of the state itself.  It is necessary to perfect the laws of the state, with a realization and a clear vision of the ultimate goal – the optimal system of relations, which needs to be intentionally strived towards. 

The algorithm of practical decisions will have certain peculiarities for different countries, but at the basic level these decisions, in many respects, will be similar, as predetermined by the theoretically unequivocal end result. 

On the basis of the above Theory of Socio-economic Structures, and with regard to the world's experience in the fields of economics and public relations, an ECONOMIC CONCEPT has been developed, which offers explanation of the main problems in the economic systems of the CIS (Commonwealth of the Independent States, part of the former Soviet Union – OD) and recommendations for their resolution by means of national monetary-credit and taxation instruments. The main provisions of this Concept are presented on the site http://dovgel.com in the article «ECONOMIC PROBLEMS IN THE COUNTRIES OF THE CIS AND THE WAYS FOR THEIR RESOLUTION” (yet to be translated from Russian into English – OD).  

The Concept is suitable for application in any country.  It includes the following blocks - concepts of subsystems:  

  • Emissions of national currency as a powerful source of effective state investments and the means for satisfying the needs of the national economy in money without inflation (an extremely important and urgent scientific solution based on the analysis of the problems with dollar, mistakes with euro and a miracle-experience of Japan, which has, long ago and unnoticed, become the primary investor in the world); 

  • Taxes as an instrument of stimulation and optimization of production while maintaining the least necessity in producers’ turnaround means, the best efficiency in the use of resources, restrained consumption in favor of investments, the maximum competitiveness of products and a zero-deficit of the state budget (demonstration of tax solutions in the states with the most competitive national economies against the problem taxes in Russia, Belarus and other countries); 

  • The system of motivations for workers, investors and state administration agencies as a way of increasing the overall effectiveness and accelerating the development of public economy (analysis of the world experience with a substantiation of the best solution for the state, the proprietor and the worker). 

The examples in the existing world economy give evidence to the validity of the drawn conclusions.  The following framework has also been developed to support implementation of this knowledge:  

A concept for a system of laws needed for the optimization of production relations, up to their theoretical highest level, and elimination of economic reasons for criminality in any country (about 15 laws are necessary);   

A program for an educational course for managers (20 hours long) and a methodical manual for specialists of organizations;   

A unique practical experience in designing a system of commercial accounting for enterprise and its units as well as for the employee’s ownership in the property of their enterprise out of its profits (over 100 contracts have been fulfilled). 

The understanding of the laws of social development and the experience of the mankind contains everything necessary for modeling, in any country, the relations of the highest level from the point of view of economic efficiency as well as the rates of public progress. The country, which will build its economy in accordance with the above-mentioned concepts, will achieve the maximum of its opportunities in terms of the growth rates of the national income and well being of the population, with the harmonious coexisting of interests of all the members of the society and their social security.  

What is currently most urgent for Belarus, Russia and all the states of the CIS, is the proposition on the subject of joint currency of Belarus and Russia with substantiation of an alternative approach – for the interstate currency of the CIS with preservation of the national currencies.  The idea behind the mechanism for launching of the CIS currency has principal novelty.  Its realization will create a break-through in the CIS economy and allow achieving the highest rates of rational development in all of its states in a short period of time.  As long as it is done before the time runs out. 

This knowledge is a very important achievement on the Scale of the Planet.  The problem is that it requires the 1st subject of the state to penetrate the essence of the Theory of Socio-Economic Structures and understand the laws of movement of public systems. 

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Dear reader, thank You for Your attention.
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For other publications, see http://dovgel.com.
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Evgenij Dovgel,
September 2006

Translation by Olga Dovgel,
October 2006
 

 

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