New Economy Model "Realism"

Before reading my article, some conditions are applied, otherwise, you cannot understand what actually I want to describe. No. 1 You must be in a peaceful area and also be single. No 2. You must read by heart not by using mind because, I am writing by heart and describing the reality, mind easily not ready to accept the reality so while you are reading my article, your heart must be active and your mind must be in passive mode. No 3 Your mind must be empty means must not be holding already expired economics principles which you have already gathered. Then you will get my points. The reality of economics is very simple and understandable as well, but if you want to know economics by reading through economics books then you read whole life, even you cannot understand anything, you will be more confused than the beginning, this is the reality of economics for every person. 

Everybody has described the definition of economics in many ways, I want to define economics in a new way in my opinion, economics means people must be provided necessary and possible products and services with the best quality by working as possible as fewer hours and as less as the damaging environment and all economic activities and resources must be used to really productive areas. 

To produce necessary products and services, works must be done either machine, robot, or people. If all works are done by machine and robot then it is the best situation for people. If all products and services are available by working machine and robot then why people need to do job. No need. So, we can get a very powerful point in here. People need products and services not need a job. So, all political leaders and economist's advisers must be cleared about main one powerful point that in the perspective of new job creation, unnecessary and unproductive jobs must not be created, if create, finally it will cost more because who are working in unnecessary areas those people also need products and service then who are working really needed area to produce products those people should work more time. To produce useful product and services, work must be done but without producing useful products and services, work must not be done. So new jobs must be created only in really needed places. By example, I want to clear more. There are 10 people in a country 6 people are working to produce foods and clothes by working 12 hours in a day and 4 people are cutting grass and throwing to a river which is not needed, they are just doing stupid work. Here all 10 people are working but 6 people are working really needed area but 4 people are working unnecessary area that’s why 6 people are compelled to work 12 hours in a day to produce for all 10 people. Those 4 people who are working in an unnecessary area also need food and clothes that's why 6 people are compelled to work 12 hours per day. If all 10 people work in needed place then they would finish by working 7.2 hours per day. If all 10 people work in a needed area 12 hours in a day then they can produce more than they needed. They can sale extra foods and clothes in another country. After understanding this powerful point, observe around the world, how many people are doing unnecessary areas, those people also need foods, home, car and etc then who are working in needed place to make foods, home, car and etc. those people must be working more hours. If whole people work in really needed areas then they can produce really useful more products and service than before. So, people must need products and services not a job but to produce useful products and service, a job must be done. So, our whole intentions must be heading to produce useful products and services then automatically new productive and necessary jobs would be created. 

Another greatest, powerful and most confusing matter is money. To understand economics clearly, we must clear about the magic of money. People need products and service but what is the role of money in economics why all people are behind of money. It must be understood. People need so many products and services but one person cannot produce all products and services which he has needed. So that products and services must be exchanged with each other like I make a lot of shoes and another person make a lot of shirts then if I need shirt and another person need shoes then we can exchange each other this system call barter system this system still we can see some society in small scale. But question is here that how many shoes equal to how many shirts should be exchanged. To figure out this point, they calculate their labour hours to make those things and calculate raw material which is used in to make those things. After that they come to one point and agreed to exchange each other. Exchange is not always possible so that they simply started use special stone, shell, copper, silver and gold for conducting transaction. Every society made some special shape of those things and everybody should have believed those things on transaction. Every products and services measured by those things on free market as well as mutual understanding. Means how many silver coins should be paid for buying 1 kg potato, it was measured by free-market or mutual understanding. After increasing people and transaction then people established one authentic bank and bank collected most of gold and silver and issue new coins and notes called money slowly every society and countries started to copy this idea.  

After that, we should understand that why some countries money is very valuable and some countries money is less valuable. We should know that some country issued less digit of money by depositing like 1 kg gold, those countries money is being powerful and valuable and some other country issued more digit of money by depositing 1 kg gold. by that reason, some countries money is being powerful and valuable and some countries' money is being less powerful and less valuable. To clear this point, we can compare about two country money Nepal and South Korea, we can see that South Korea money is very less valuable than Nepal even South Korea is more developed than Nepal because South Korea has been issuing more digit of money by depositing same quantity of gold, silver and foreign currency value than Nepal. If South Korea want to make own money powerful and valuable then South Korea can issue new money 1 KRW by exchanging old 1000 KRW then South Korean new money would be powerful and valuable like dollar. And all products and services price would be measured by new money like in the past, we could pay 1000 KRW to buy 1 banana but now we can buy by paying 1 KRW to buy same banana, but it should not necessary to make new money without any special reason. Another way we can make money powerful by changing slowly exchange rate. But it takes a long time to make a little bit powerful by changing the exchange rate. For example, currently, we have 1-dollar equal to Nepalese Rs 122, the exchange rate is fixed. Assume that if Nepal Central Bank publish 1 Dollar equal to Rs 1 then what will happen. Nobody sends money to Nepal, nobody come to visit Nepal because 1 dollar is very valuable and powerful means we can buy so many things others countries but in Nepal Rs 1 is very less valuable and less powerful means we cannot buy anything by paying 1 Rs. Another hand most of the Nepalese people will go to the central bank to exchange dollar, because if they get 1 dollar by paying 1 Rs then everybody wants to go for shopping to Thailand, Singapore, Europe and USA, who want to buy in Nepalese market, nobody. And central bank also cannot provide dollar as demand because dollar supply is already stopped and demand is extremely high. That’s why central bank cannot extremely change exchange rate in short period. So, we should clear that money exchange rate is fixed by so many factors like demand and supply of foreign currency, price level and living cost of country and deposited gold, silver, and foreign currency and issuing digit money ratio. Those are the main factors that’s why some countries money is valuable and some countries money is less valuable.  And another main factor is labour cost if labor cost is high practice then price of all products would be higher if price level is higher then obviously related country money has been less valuable. Like labour cost is lesser in USA than Nepal that’s why USA dollar is more valuable than Nepalese Rupees.

After understanding about money role again another powerful point must be clear that about what kind of economy activities must be done or must not be done. In this point so many economists are still confused and they never be understood. All gold, silver and money are just assumed value for making transaction of real value like foods, home, car etc. All money digits are assumed value. People need real value like foods, home, car etc nobody has eaten gold, silver and money directly yet. That’s why all economic activities must be running to produce real products and services then we can produce more necessary products and services which are really useful. Unnecessary and unproductive economy activities are the huge loss of any economy. Money must be used to do transaction on real products. Money must not be used in unproductive transaction like one person today buy land for selling purpose and after few days he sales another person by getting profit then what is the benefit here? Here money is moving but without produce useful good and service. Finally, people need products and services but here nothing is new produced just generating profit, without generating new useful value, making profit is the poison of economy, which is big mistake of money using in the world. in ancient age people did not use money that way, people must have produced something useable products to get money but now money is used in so many unnecessary areas to increase its value, which is a big mistake of using money. That kind of economy activities must be controlled. Otherwise people have got a lot profit, money but they cannot buy really necessary products like foods, home car etc. Any government of the world also must clear here that all economy activities must be heading and running to produce really needed products then government can collect tax from useful transaction. In the name of increasing tax, government must not create and motivate to do unproductive and useless economy activities. Finally, we must be clear that money is just assumed value which may be more digit or less digit no matter but people need products and services rather than more digit form of money. So, all economy activities  must be heading to produce useful products and services rather than pursuing unproductive profit. 

Next powerful point about international trade If we have all materials to cook rice and also have known how to cook rice then we can cook rice. And our neighbour has all materials to make bread and also have known how to make bread then he can make bread. In that situation if we want to eat bread but we don’t have material and also don’t have idea how to make bread then we should make more rice and give to the neighbour then he would give to us bread. This simple idea can apply to international trade. To develop our country, we need new technology which we cannot make inside country then we must make some products which is possible by using our recourses then we can sale our products to another country and we can buy which we need. To buy technology and products from another country, we must pay international accepted money; our money may not be accepted by others countries. That’s why central bank must be holding international accepted money for back up of circulate money. If central bank doesn’t have foreign currency then we cannot buy anything from foreign country. So, to increase our foreign currency, we must sale our products to other countries and we also can get foreign currency from tourism and remittance as well.  

Another most powerful and difficult to understand point are capital and interest. Term capital normally used in business; those money called capital which money is invested to business by shareholders. To produce any products, it takes long time and depend on products type. For example, If I want to make shoes factory then I should buy or take on rented building to run factory by paying money, and I have to buy raw materials, I have to pay salary to employees and pay so many others expenses before selling final products. So, I must invest my money in business that called capital. Another hand forever capital is not sufficient for running business so I should take loan from bank as well. After taking loan I have to return bank loan with extra money this extra money called interest. By that interest my shoes cost price would be increased if I get loan without interest then I can make shoes at low price. Interest is the profit of money handling. Bank should pay interest to depositors and also pay so many operating costs of bank, that's why bank must charge interest to businesses. It is good up to now. But I have already described that money must be use in productive field and job must be done in necessary areas. By increasing interest, price of products would be high and money value also increased without increasing useful products. If interest is not charged on my business than I can produce more shoes by using that interest money in raw material. So, for purpose of increasing productivity interest must be removed from economy activities. Another hand by applying those interest on money all price levels are being increased and unstable. By getting profit from interest, simply by that reason, people around the world have been doing unnecessary and unproductive work by pursuing unproductive profit. So many software has been made by scientists for handling money but economists have scared to use that software for loosing job at commercial bank I would like to say please read my article you will get point that people need products and services not job. One central bank easily can handle all money related transaction by using software. Then we can close all commercial bank which is unproductive work, they have been doing. Please don’t forget that powerful point people need products and services not a job. I am trying to cut around 80% unproductive work across the world. So many remittance companies and money exchange agents have been doing unproductive work, those works can be done by directly central bank to another country central bank by using software. Some economist still can think that without interest no possible to generate capital and if money is more circulated in market then inflation would be happened please don’t be hurry, I will solve capital generate and inflation problem forever from the world. 

Another powerful point about developed. What is mean by developed? Developed means people have been provided by best products and services by working as much as fewer hours and as much as damaging environment like people should have healthy environment, quality foods, facilitated home, high quality car, high security, education free, health free, best road etc whatever possible things we have should be best quality means developed. Then how we can get those things, simply by work. Without working really needed places, we cannot make those things which I have mentioned. If any country has recourses then using those recourses, we can make whatever we need. If we don’t have all recourses to make all necessary products then we should have made more which we can make. Then after we can sale our more products to other country and buy from other country which products we cannot make. It is all about act of management skilled how to use all resources in proper place. Then we can develop any county. For example, if I have all materials to make shoes and also, I have skilled to make shoes then I can make. If I work more hours then I can make more shoes and can sale to other country. Then I can buy shirt from there which I cannot make in my country. By using this simple reality, all countries have been developed like Europe, USA, South Korea, Japan Singapore no need to read any book to find out that how could any country develop it is all about art of management to mobilise people in really needed areas. Lack of simple knowledge of economics activities many developing countries are pursuing dollar for development. For example, in Nepal many people have been living without home and without using so many products and services and also without job even there are most of resources are available why it is happened because of lack of economics knowledge of economists who have been serving to government as an economist's advisers. Trees are fallen in jungle, cement factories, itta factories and iron factories are not running full capacity due to lack of demand, banks have been facing liquidity problem, people are being jobless and products and services less. Here we just need to connect each other by making policy, if bank eases credit facilities to buy home then so many people who have already job start to buy home then all available home would be sold and housing company starts to make new houses then many necessary jobs would be created, all factories would be running with full capacity, fallen trees also come to use, jobless people also get job then those people also can buy new building home. All economy activities are increased then government can collect more tax. If we see all developed country most of people have loan and they have job and also necessary products and services and interest also very low but when we see in developing country credit facilities are very tighten, people are jobless, loan less and necessary products and services less. So that to develop any country credit facilities must be eased to necessary areas. We know that money is just assumed value so should not be tightened for invest in necessary areas. Without moving money new value would not be created so money must be moved to produce new products. We know that some time credit facilities increase the inflation we can control inflation by changing exchange rate but in the name of control inflation, tighten credit facilities is big loss of country. By simple that reason people are in poverty. So, I want to solve this problem forever from the world by using new economy policy name “Realism”. It is very powerful, scientific and practical as well for all. 

After understanding about powerful point like people need products and service not a job, money must be used in productive area. People must pursue useful products not unproductive profit. Interest must be removed for increase productivity and price stable. Money is a just assume value, money is not a final goal. And to develop any country, necessary work must be done. These are the work and money related matters but all economy activities are related with human. Our whole economy activities are affected by human nature that’s why without addressing human nature, we cannot make applicable economy policy in any countries. In finally communism would always fail by human nature and capitalism always create class struggle and inequality society and socialism does not achieve big goal, they are just satisfied in low facilities. That’s why I am creating new economy policy to achieve big target called “Realism” means all economy activities and resources must be used to really necessary area to produce best products and services then we can enjoy our life by using best products and service. 

To formulate any new economy policy, we must consider some points about human nature. After getting food, people need freedom, freedom is the most important factor of any human so we must respect people freedom. People must not be compelled to do work by force, if people work, they can get more products and services if they don’t work, then they get just survivable products called unemployment benefit. People must be given right to be holding private property otherwise people don’t motivate to do work. Work must be classified but salary must not be too much difference like current situation.  

Model of New Economy Policy “Realism” 

1. 1.Capital formation- Every sector we can open new “Realism Company” model in this company model, company issue share to people but one person can buy only one share and if somebody want to sale share then that share listed in selling list and if somebody wants to buy share that share listed in buying list and share price would be fixed by calculating company net worth and transaction would be made by applying FIFO method, price would not be fixed by secondary market. Dividend would be paid in every year to shareholders. All secondary share market is doing unnecessary and unproductive work, one day buy one person another day sale to another person without any produce they just get profit and loss. This kind of useless economy activities must be stopped, people are being engaged without produce useful products, finally we need products what we can do by getting share market profit. It must be modified as I have mentioned new model. After applying Realism Company model, all unnecessary economy activities related secondary market would be stopped. Those activities can run where really needed. 

   
   

2. 2.,Whatever we need some zone and district, we can open Realism company and start to produce and sale directly through company sales counter. Nobody needed on middle channel. No need any advertise no need any marketing strategies all are expired and useless work people must be freed from useless work. Everybody can buy one share means all are owner no anymore unhealthy competition in market. All price of products would be fixed on the basis of cost price by adding very reliable profit. 

   
   

3. 3.I already removed commercial bank so no need to charge interest on loan and no need to worry about inflation all products price is fixed by cost price. If people have more money, they can buy goods even some goods shortage some short period price remain same. Then why should worry about inflation. 

   
   

   4.All economy activities run by Realism Company model after that nobody can compete with this company. All unhealthy foods are removed from market. Best and perfect products and services would be made. 

   
   

4. 5.People are allowed to open small shop, but not necessary because everybody has share in Realism Company, they can get dividend, they can get job if don’t want to do job they can get unemployment benefit. Now if we see small market so many small shops are running because they don’t have option to run their life after apply Realism Company Model, they have option, we always should provide good option to people then they choose best option. 

   
   

   
   

5. 6.In current situation corruption is major problem of the world. By applying Realism company model, all paper money would be destroyed, all transaction would be made by visa card, and mobile app. Nobody can corrupt by setting government post and Realism Company. Every share holder can check everyday transaction on mobile app. 

   
   

6. 7 Very understandable point is here, all educations and health services are freed for all. So many people are starting to think that it is impossible to free those services we don’t have big budget. Please remember my points nobody has eaten money directly means who are working as a doctor a nurse a teacher, a lecture and a professor etc in hospitals and schools and universities those people need home, food, clothes, car etc those things are already in market by producing Realism Company. Government can collect tax from Realism Company then government can pay salaries to those employees who are working in hospital and education sectors. Those employees can buy house, car, foods, cloths etc from Realism Company. What is the problem to apply such simple mechanism to change the country? I don’t understand how many unnecessary activities are running around world by lack of simple this knowledge. I am creating these ideas while I am cleaning toilet by remembering poverty around globe, many people are dying to cross sea from Africa to Europe just for living good life, people are compelling to die everywhere by lack of foods. But people are doing unproductive work as name of freedom. Freedom is needed, but suitable option always be provided, best option never kills anybody freedom.  

7. So many options we can create to run economy activities please rethink about economy model all are compelled to suffer by current model. 

 Thank You for Reading. Your feedback highly appreciated. sorry for my poor english language.

Please read this to know more https://t.co/hytgiTcbyg

Writer MBS from Tribhuvan University 2008.