Imagine a world without money. You go to the store and take as much fruit, vegetables, pastries and alcohol as you want. Completely unregulated. Sounds beautiful, doesn't it? However, in order to take it, it must also be made. It has to be made of something.
In order to take that pile of apples, the apples have to grow somewhere, on some apple tree. It's somewhere in a set. The orchard takes up space, land. Try to estimate how many apples would be needed, ie apple trees, ie orchards, ie land, in order to cover the consumption of apples by this unregulated society. The answer is simple - we would need infinity, because the human desire for apples, the quantity demanded, would be infinite.
We want more! More apples! That would always sound like the streets. Instead of apples, put anything: alcohol, cigarettes, other drugs, condoms, pastries, cars, computers, hardware, wood, coal, oil - anything. Human desires are unlimited, but unfortunately, resources are limited. We don't have infinity land for infinity orchards of infinity apple trees. And for this infinite space we would need a few (infinity) more spaces for the infinity of other things.
I have a feeling that it simply wouldn't fit on this planet. We would "plunder" the planet, then we would become extinct and there would be (probably) peace.
However, man is a creature quite intelligent, and so, in the instinct of self-preservation, in order to save himself from the catastrophe of infinity, he began to apply some economic principles. The most important thing a person has come up with is the price. That everything has a price. Price is the strongest dam that protects us from self-destruction. Price is what protects a person from catastrophic freeand, before one's own insatiable lust.
Price is a relative and very individual concept. For most people, the term price is a number, the amount they have to pay to achieve something. However, this is a very narrow and inaccurate view.
Price is above all a psychological barrier to consuming something. The less oil there is, the higher its price, the less a person will consume. As the price increases, it becomes more advantageous to promote various alternative fuels. For example, greener and less demanding on the environment.
Money naturally regulate our unlimited lust for anything. Without money (or a generally accepted means of exchange), there is no humanity. By itself ate in his desire for anything.
If this system worked perfectly, we would be relatively beautiful, the states would be indebted to a minimum, and we probably would not be dealing with congested roads and the like.
Unfortunately, this one system it doesn't work perfectly. It disrupts him demon free, a principle that is widely used by states, a principle that is behind the current crisis. Free healthcare, education and more.
Of course, we pay for what the state provides us free of charge. However, we pay for it indirectly, in the form of taxes. Taxes that are flat. However, higher taxes are paid by those who provide free to the state services uses more? Of course not. The tax is a mandatory payment to the public budget, which is characterized by non-purpose and non-equivalence, ie. it is imposed as a unilateral obligation without the payer's right to performance by the state.
For ordinary people, the money paid to the state in the form of taxes is very far away. They are distant from their perception and thinking. It's just a number, it's not specific money in the eyes of most people. That's why people are free service Perceive as well as services that are free. Like services and goods that have no value.
People then tend to overuse these services. They have an unlimited desire and need to use these free services, services that are fully directed by the state. The state is the one who controls certain segments. The state becomes an expensive mole.
How to become a great cumbersome moloch? Let's look at healthcare.
A politician longing for power appears. To achieve it, he decides to attack the masses of people who are generally less intelligent and educated. There are the most of these people in society in the Czech Republic. The politician has also been helped by previous decades, when people largely resigned themselves completely to an interest in public affairs and expert interpretations (the popularity of the various Lightning and experts). A very good political draw could be to "offer something for free". People on the word free they hear, very often when they call out zdarma free ’they start behaving irrationally (Dan Ariely, How expensive is free, pp. 56-57).
Politicians tend to confuse the word free with the word free. The reason is quite simple - free sounds better than free. Although in the Czech Republic, where general economic awareness is at a very low level, it is in general perception among words free a free of charge almost insignificant difference.
But let's get back to our politician. This politician will therefore say "I will provide you with free healthcare! And schools too! And everything! ” People will hold on to his promises and choose politics. He becomes prime minister and begins to rule - and indeed, he introduces Free healthcare.
So a bunch of officials will be hired to distribute and redistribute money in all districts to doctors and medical facilities for their operation. New clerical positions, new equipment, new salaries and further draining of the state budget.
Unfortunately, after a year of rule, the politician finds that the cost of health care is rising disproportionately. People go to doctors with banalities, they are too often sick, which the state feels when paying sickness benefits, doctors are overwhelmed works and so they do not perform their work as well as before, many medical procedures and examinations are long awaited. People are calling for redress, the politician's popularity is beginning to decline. What with this?
After all, a politician will not lift the pull of his government, free health care. He himself would admit his burning mistake. So he decides that more money should go to healthcare in order to attract new employees, doctors and nurses, for example from other countries and so on. But where to get it? It can raise taxes, but this will be most pronounced on low-income groups, which is also the core of its constituency. So it will introduce progressive taxation - there are fewer rich ones, their voices will regret it. He bets on envy, he knows that with progressive taxation he attracts those voters who all richer, different entrepreneurs and the like automatically consider thieves who need to be properly taxed.
However, progressive taxation is generally more administratively expensive than the simplest flat tax in the country ruled so far. The authorities need new officials, which in the public finances will be reflected in an increase in the salaries of civil servants, larger companies must hire additional assistants and officials, which will be reflected in a reduction in profits, which is associated with lower tax payments. It is possible that, despite the higher tax, the individual will eventually pay less due to the increased cost of tax overhead.
But the politician gets another sad news - tax crime is rising due to tax increases. People simply try to avoid paying taxes because they are too high for them. What will the politician do with it?
Progressive taxation is a somewhat significant change. After all, a politician cannot take a step back, because he would have to take with him the icon of his government, free health care. What with this? "We will introduce stricter control over the payment of taxes!" Thunders the politician from the lectern. And so a bunch of officials are accepted to the tax authorities. Additional salaries deducted from the state budget in addition. Other police officers in the newly formed financial police will join the officials. New office, new equipment, new expenses… and a bunch of new officials who administer the financial police.
Even so, healthcare costs are still rising. Healthcare is becoming a confusing clutter of bureaucratic processes, where it is thrown with financial amounts as marks in the first grade of elementary school. Corruption is also rampant in this vast apparatus of redistribution of public funds, thanks to the very lucrative opportunity to connect to these routes of large sums of money. Money is disappearing in sight, doctors and healthcare facilities are still calling for more and more money, and people are still complaining about the declining quality of healthcare. Thus, the situation has not improved (on the contrary, it is still deteriorating), but health care spending is still rising.
Over time, the state no longer has enough funds collected on various taxes, and our politician is already afraid of further increases. So he has two options: either invest another large amount of money, admit his mistake and simply blast himself politically when he returns the whole system back (that is, I write here as if it were back change in one day, but it would be a very long process where money would still be lost), or he would borrow to run this whole huge apparatus. Some reduction in salaries is out of the question - they are voters, even if he cuts salaries, many of them could leave, so there would be a risk of the whole system collapsing and the remaining officials more likely to be corrupt.
So the state will borrow. Innocent at first, just few billion. However, costs continue to rise; let us add to this many other free things that today's states provide us, apply the above principle to these free services (to all) and we will reach the root of the state debts of the vast majority of today's states. At least the European ones.
Thanks to free of charge, the state creates a lot of systems for systems, it hires officials for officials. It becomes a huge inefficient bureaucratic apparatus, where a huge quantity of money is redistributed, to which many vacuum cleaners, various brothers, sons - in - law and others who rob the state through public contracts awarded to them by corrupt officials. The state becomes confusing, non-functioning, the state does not see the problems that narrow the public, it is not able to solve them because it is too burdened with itself. The state and the state apparatus become the burden of society, not its support.
What is a complete disaster, however, is the fact that all these burdens on the state will also be reflected in the burdens of private entities. For example, with the already mentioned progressive taxation - the overhead of taxes in a private company, thanks to a more complex system, takes many more man-hours. Therefore, companies must hire new employees, but not in order for new employees to contribute to the prosperity of the company and create benefits for the company, but as an aid in the administration of a company's taxes. He is basically an employee who was employed under pressure from the state. He is a company clerk for a clerk, new systems for systems are being created in companies, which reduces the efficiency of companies and, as a result, the entire economy.
We can say that in this demon free stands one of the pillars of the current crisis. This the crisis is not a market crisis, but a state crisis. To mitigate the effects of the crisis, the state is trying to further intervene more in the functioning of the market, and in addition to indirectly influencing the performance of companies, which we have witnessed in the above example, there is a direct influence. However, this direct influence means additional work for civil servants, other new officials, other control institutions, additional systems for systems, additional burden on the state budget and, as a result, additional burden on private companies. Maybe state regulation will get the economy out of the current crisis, but at the same time it will pave the way for another crisis that will be much worse. If the state continues to use the means of increased regulation and increased supervision of private institutions in the next crisis, we will already be able to talk about a cyclical process, at the end of which may be the full replacement of the current (at least a little) free market system by a centrally managed system. And this will be the final economic catastrophe of the dimensions of the crisis in post-Soviet Russia (just spread worldwide) inevitable.
What will we do about it?