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Some products of the theory

The goal of development

All the goods and services all the consumers on this planet buy every day, make up a stream of products that are exchanged against all sorts of money. This stream makes up the macro-economic development on this planet. Consumers determine the goal towards which this development flows, with each purchase they make. The goal with which consumers spend their income is therefore the goal of development.

The only goal with which they can spend their income, for the moment, is : CONSUME! The macro-economic development of this planet is senseless, without another goal than to consume more and more. To pursue growth in a senseless development has led to the consumer's society with its destruction of nature, loss of values, "apartheid" in the economy and increasing crime rate among which corruption. To pursue growth in any possible sense and direction in a senseless development is the efficient cause of the social, economic and ecological crises ; the socio-econological crisis that plagues this planet.

When consumers can deduct the purchase costs of ecological products from their taxable income, they will be driven by self interest, reinforced by financial interests to spend their money on ecological products. They will be the scouts of society, tracing a way of living in harmony within nature with all the ecological products they buy, in the ethical pleasure of peace. They will be the stewards or trustees of human nature, because human nature can be kept sound only with goods and services from nature. Only consumers can keep the integrity of human nature as the life producing capital of the human race, for this and following generations, by their way of living, nay, by their way of life. To keep the integrity of human nature will be the goal of development when the costs of living with ecological products can be deducted from taxable income.




The principle of efficiency of economy

This principle is : equilibrium between the operating accounts of the Capital account, the accounts : Costs and Revenues, should be maintained by the people who earn the revenues.

For the moment, this equilibrium is maintained by producers in the free market economy. - These producers are allowed to deduct production costs from sales revenues in order to arrive at the net profits which are used for taxation purposes. - Because of this freedom to manage costs, producers can reach the goal of their activities : to maximize profits, efficiently. The freedom to deduct costs of production from revenues from sales assures therefore a micro-economic efficiency in the free market economy.

This freedom has also enabled these producers to be as efficient as they are in sharing the limited resources of this planet to satisfy unlimited desires of consumers. This freedom assures therefore also a macro-economic efficiency in the free market economy.

However, to produce is not the only drive to earn income. The first drive to earn an income is to survive or to sustain a way of living. This income is earned by consumers. They spend their income on living costs in order to maintain or enhance their standard of living or to survive.

By the same principle, the efficiency of the free market economy in sharing limited resources will increase when equilibrium between costs and revenues is maintained by consumers. More products will therefore be made with the available resources of this planet.

Moreover, only consumers can manage the costs of living to maintain the integrity of human nature, because this integrity can be maintained only by means of selecting the goods and services from Nature which are to be consumed.

More well-being will be created for more people, when the costs of living are managed to keep the integrity of human nature, because the efficiency of the economy will be improved, in an ethical way.

The principle of efficiency of economy gives therefore an ethical base to the free market economy. As long as this principle cannot be applied by consumers, the free market economy lacks an ethical base.




An equation of a dynamic equilibrium in macro-economic exchange processes within Nature

With the goal hitting management of the costs of living the basic macro-economic equation :



Gross National Product = Consumption + Savings (for consumption later or consumption with or at a lower frequency rate)



can be transformed into a basic equation of the dynamic equilibrium in the macro-economic exchange processes within Nature, in the following way :



Gross National Product
is
the macro-economic total
of the micro-economic bookkeeping of producers
about the products they sold, or

GNP = Costs + (profits - losses), in GNP

Costs = Costs of materials + Costs of labour and other sources of energy
---------
Costs of labour and other renewable sources of energy +
(profits - losses), in GNP
+
Digested by consumers
(part of former Consumption)
=
Net National Well-being

Net National Well-being
=
Digested by Nature
(other part of former Consumption,
now accounted for as Waste)

+ Consumed Nature
( or Cost of materials, including costs of non renewable sources of energy )
+
Savings in Nature
+
Savings in money (or former Savings)



A basic equation of a dynamic equilibrium in macro-economic exchange processes within Nature can therefore be written as :


Costs of labour and other renewable sources of energy
+ (profits - losses)
+ Digested by the consumer
= Net National Well-being =
Digested by Nature + Consumed Nature
+ Savings in Nature + Savings in money



More information about this equation and how the values of the various parameters are interlinked in a dynamic equilibrium is presented in the complete report, section III : Consequences for the basic macro-economic equation