Satisfying needs is the aim not only of production, but also of distribution of products in the society. We must elaborate on this phrase or it will be taken for an obvious and true commonplace, yet is essentially devoid of meaning due to its abstract nature.
If the society is in any way engaged in multiindustrial production and is in any way distributing products to be consumed by physical and juridical persons who need them (both in the production and consumption spheres) it follows that the means of assembling[114] the multitude of microeconomy into the multiindustrial production and consumption system are objectively set (tuned) to fulfilling certain definite goals — namely, the needs generated by the members of society (individually and collectively). It follows that:
«The market mechanism» is nothing but words (whose meaning is absent in some minds[115]) which designate a more or less efficient algorithms of the means of assembling the multitude of microeconomy into the systemic integrity of macroeconomy.
Therefore, the advocates of market self-regulation should cast aside their prejudice and learn that the «market mechanism» by itself cannot and does not perform the task of defining targets regarding production and distribution of products in the society. What it does is adjusting production and consumption to the targets that have already been formed and which the market mechanism turned out to be adjusted to. And such adjustment occurs regardless of whether the society (or some of its members) understands the nature and methods of adjusting the «market mechanism» to certain definite[116] goals or not.
In any process of control (or self-control) that is initially intended for achieving a certain number of defined aims those aims have different priority[117] and form a hierarchy where the most important aim comes first and the aim that could be rejected (declined, turned down) if the complete number of aims cannot be reached comes last. In this hierarchy termed as aims vector individual and group aims form a sequence contrary to the sequence in which they would be forcedly rejected under pressure of circumstances. One of the circumstances making it impossible to achieve the complete number of chosen (announced, stated) aims is their being mutually exclusive.[118]
It is characteristic of the crowd-“elitist” society that it generates a number of mutually exclusive aims. This leads to the market mechanism’s being adjusted to certain definite ranges of production and distribution in social groups according to the aims that are placed at the top of the hierarchy of needs. The crowd-“elitist” society has an inherent systemic property — its ruling “elite” is responsible for a larger part of the degraded parasitic range of needs[119]. Among other ways of abusing their power within society the “elite” make themselves superior to the rest of the society in paying capacity.[120] Because of this the «market mechanism» is objectively adjusted to satisfying the needs of the “elite” in the first place by means of income and savings distribution. As the degraded parasitic constituent prevails among those needs the demographically grounded needs of the rest of society (the majority of population) are satisfied due to such adjustment of market mechanism upon the residual principle[121]. Besides it is the “elite”’s way to «diminish» the rest of society in order to strengthen their “elitist” social position. To this end it encourages the common people to adhere to the degraded parasitic range of needs («it is easier to govern people who drink heavily» etc.)[122] This way the majority of people and the society on the whole have even a smaller chance of satisfying the range of demographically grounded needs.
The market mechanism regulates the distribution of products within production sphere and beyond according to what is termed by political economy as «the law of value». This law says that average prices of commodities express the average labor inputs for their production in the society. Yet since in many activities «labor inputs» cannot be measured directly[123] the «law of value» turns out to be inconsistent in terms of metrology due to grounding price formation on «labor inputs» whose quantity it is impossible to measure. Nevertheless, if one accepts the fact that market prices exist for an objective reality, price ratios of different products (intermediate, auxiliary, final) define the yield and profitability of their manufacturing under the technologies and business organization accepted by the manufacturers.
If the system of macroeconomic regulation is absent or underdeveloped[124] businessmen react to prices being formed on the markets by expanding and starting production of some products and removing production of other products. Accordingly if one considers the processes of production and distribution of products in the society during sufficiently long time periods the so-called «law of value» does regulate the inter-industry proportions and the absolute activities of production in each of the industries.
The market mechanism is capable of regulating many things if not everything in a society’s life. Yet the real freedom of private heterogeneous entrepreneurship under the fundamental economic law of capitalism — «get more profit right now!» — makes all of us face the question about the nature and quality of this regulation.
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During the epoch when macroeconomic regulation did not exist the «law of value» worked the following way. Bad harvest was a calamity: food is short, prices on food rise, curtailing the solvent demand in other industries and causing an outflow of workforce and ruin of producers. A rich harvest was equally a calamity: food is in affluence, prices fall to a level when producers of agricultural goods go broke. This leads to reduction of their share of solvent demand on other markets, a slump in production in other industries whose effort was on satisfying their needs. In historic reality it came to burning grain in furnaces simply to stop the price on it from falling. People utterly forgot about the past bad harvests and about the bad harvest that could yet come in future. A rush demand caused by real needs or by the whims of vogue leads to a rush raising of production capacity in the corresponding industries. Production capacities buildup requires time, and the rush demand could disappear while that time passes. Or the rush rising of production capacity could lead to the supply of the product on the market becoming superfluous in regard to the current needs of society or the solvent demand. This causes prices to fall below the level of production’s self-repayment and to the ruin of entrepreneurs who have invested wrongly.
This kind of mess is «natural» for the historically real capitalism with a free market that has formed on the basis of free private enterprise and free price formation in the sphere of production. Yet this capitalism comes with a special annex of free usury and stock-exchange speculations which the supranational bank corporation is engaged in. This corporation is capable of arranging a financial crisis on purpose and with a pre-planned timing in any country it controls using it as on of the means to achieve goals of a non-financial nature. This was exactly how financial and economic crises in pre-revolutionary Russia were provoked, this was how the «great depression» of 1929 was arranged in the USA spreading throughout the whole capitalist world of the time.