Chapter 2: The properness of value-capital
I felt necessity of a new economic policy, on the basis of a simple question, made my thought deepen and develop, and invented a new economic policy. Effective demand of the whole society consists of consumption demand, investment demand, demand which the government creates, and the demand which comes from import and export.
The demand which the government creates is coming to a deadlock and there is a limit in the demand which comes from import and export. The investment demand doesn't increase when it doesn't have consumption demand even if it is stimulated by low rates. Therefore, I thought of a policy which creates consumption demand directly. If it is executed, anxieties about the future such as deficit government bonds don't remain, it arouses consumption demand directly as an antirecession policy. It is an effective and epoch-making plan.
The economic policy which I invented is following one.
We tie electronic money, information highways and computer data banks and construct a new computer information network. Using it, they donate value-capital to people. The people can buy only basic needs using the value-capital. As for the person who sold basic needs, they can get usual money, which is converted from the value-capital, and they can buy anything by using the money. We build such an economic system.
I will describe the value-capital. The value-capital is money which wasn't gotten by economic activities. It is possible to use only for consumption of appointed basic needs and not for the transfer to other people and accumulation. It is money which has special nature to change into usual cash if once used for consumption. To donate the value-capital is equivalent to donating bank bills which the government printed in the purpose of donating and has the mandatory circulating power to unspecified people.
As questions are thought of to the properness of donation of the value-capital, I attempt to review them. To the question first, to the naive question that the value-capital makes national wealth unreasonably increase. As for the value-capital, like cash, the bond and the debt to the Bank of Japan increase and they aren't included in the national wealth. It is expected that production activities become animated as a result of the donation of the value-capital and that the national wealth increases, too. But it is the natural result of the producing labor power and is not unreasonable at all.
But, it is evident that gross assets increase. However, gross assets increase by speculation, too. As the increase of the gross assets by the rise of prices of stocks and land in the bubble economy is allowed, their increase by the value-capital which has the nature of cash is not unreasonable at all. It is not unreasonable from the point of view that basically amount of money in circulation could be freely decided by the nation, too.
Then, national income increases if donating the value-capital. However, there should be no wrong when production increases in proportion to the increase of the national income. Because it is defined as "the total sum of the production".
The biggest question to its properness is one as for individuals who receive the value-capital. They don't get benefits from the result of their economic activities, get unearned incomes and that makes a question that they unreasonably receive money. It is a principle that, under the capitalistic economy, we get buying power by our economic activities through the market.
As basis to support this principle, there are facts that improvements are brought about by going at economic activities and supporting the production of our society. Against that question, the donation of the value-capital through the new economic system can refute that it does not impair the motivation to labor. Because, it is possible to buy only basic needs by using the value-capital and if wanting comfortable life, we cannot help working to obtain money for the purchase of properties and services other than basic needs. Also, in the present situation, they don't donate enough value-capital to buy all basic needs necessary to live. That is, the donation of the value capital is to help housekeeping. Therefore, people's life becomes easy, but it is clear that we cannot live only with the value-capital and the motivation to work will be never lost.
Next, we do economic activities, get the result of buying power and that is approved. And there is an argument that social order is maintained by that. As they donate the value-capital to all individuals of the nation orderly through the new economic system, it is possible to say that there is no bad influence to the social order. "They strew with money from helicopters in the sky to start the controlled inflation" couldn't be object for comparison. It is very much orderly donation.
There is an argument that it is a social conviction that we get the buying power through economic activities. Exceptions such as the public assistance and the bounty exist at present and we can say all the members of the nation are supported on their lives and that agrees with the idea (the Japanese Constitution 25 article) of the right to live which secures whole people's life.
On the other hand, it is a principle that one lives on one's humps and the social assistance and so on are, from first to last, only exceptions and changing exceptions to the principle isn't allowed, which can be thought of. However, at present, our lives are realized on a wide range of public services and moreover they don't always correspond to public loads of the individuals. The value-capital could refute that it can be included in the extension of this public services.
Also, as they donate the value-capital with same amount to the national individuals, it is useful for the reduction of the gap between rich and poor, too. As it becomes the power which secures the national lives, on the basis of that, cultural activities will become vigorous.
As Adam Smith said, the market is the efficient mechanism which adjusts economy and distributes resources by exchanging good deeds based on agreed evaluation. However, it is clear that only the market cannot solve the problem of inadequacy of demand from the historic point of view. And as long as they don't impair the functions of the market, I think we can bring extraneous systems into the market.
Moreover, the existence of the government which does fiscal policy is extraneous one for the market. Even if we introduce my new system, the motivation of moneymaking in the market and the feature of the market aren't impaired. In the first place, the economy exists to satisfy the needs of human beings. On the other hand, the human beings don't exist for the economy. There is no reason for rejecting the economic system which can satisfy the needs of the human beings without destroying the economy.
Well, the value-capital with which degree do they specifically donate? At present, as for the total sum of the donation of the value-capital in every year, about 25000 billion yen that are equivalent to about 5 percent growing rate of GDP in Japan, 500000 billion yen, will become a rough standard. They inject the amount of money into Japanese economy every year from outside the conventional economic mechanism as a nutritional supplement.
I now think it is proper to destroy the big bubble when speculations prospered. Surely, it satisfied fortune hunters, stimulated effective demand, and had a side vital for the economic growth. However, there was the reality that people chase easy money, forget social utilities and prey on the weak. Moneymaking should be allowed to the limit which gives society profit. It is my economic policy that expands demand through the donation of the value-capital and makes the economic growth instead of the economic growth by the bubble.
I admit the efficiency of the market but don't see it almighty. I admit an incomplete point in the market. And in order to complement the present market system and get the stability and growth of economy, I invented the new economic system.
By this, I think economic recovery becomes able to be realized as it can remain the merit of the Japanese system and moreover maintain the policy of financial reconstruction. The reform to strengthen Japanese economy becomes able to be realized, too.