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Economy as social interrelationship

by on 05/02/2020

Economic system in it’s essence is a monetary expression of social interrelationships enabling exchange of goods and services between members of society, who are participants in production and exchange of these goods and services. The major instrument used for exchange is money. Money, due its property of being a fixed representative of relative value of goods and services, and its function as universal media of exchange, by its definition, has certain value, as its emerging property.

There are still many places in the world, where repressive regimes still prevail. Most of the population in this countries live in humiliation and poverty. The regimes in these, economically very poor countries, can be called communistic, or capitalistic, but neither of them are successful to create free societies, and well being and welfare for their population. 

The precondition to create wealthy society, with thriving economy, is prevailing social relations, proper for building a socio-political system, which will allow to the creative forces in the country to express and act freely and with harmony with each other.  The modern market economy is built on a voluntary relationship between legal entities, that can be individuals, or businesses, capable to collaborate, while competing among themselves, to create and deliver goods and services to consumers effectively.  Not every country has been blessed with socio-political structures, that allow creation of such a voluntary social-economic relationships, enabling to build a social economic system based on voluntary cooperative action. 

Most of the autocratic political regimes, that are preoccupied with the problem of their lack of political legitimacy, try to prevent formation of voluntary, non institutionalized social relations, that may threaten the despotic regimes ruling political monopolies, but are necessity for existence of thriving economy. 

Other reason for failure of countries to achieve economic wellbeing for the population of their sovereignty, is the lack of critical mass out of  the population, with capacity to achieve education level, enabling transcending from their intuitive understanding, to conceptual understanding of reality. These countries are often characterized by corrupt governments, in which individuals or violent social groups are competing for political power, all for the sake of promoting the people on top of political hierarchy, their families, their klan and the social group associated with them.  Incidentally may happen, that a very well-ordered country, with highly sophisticated social economic relations, under certain historical, economic, political circumstances, may fall into such rule of oligarchy and autocracy too. While failing to build social organization, which facilitates voluntary economic cooperation, and causing by it prevailing poor economic conditions, may develop a tendency to adopt ideologies and faith for radical solutions, such as communism, that in its economic essence lays the centralized political economic management system, as opposed to liberal governments that run in principle a decentralized economic-political system. 

An other possibility is a regime, focused around populistic leader or leadership, that is based on denial of realities, and ignoring long term consequences of policy. The result of these regimes is necessary failure, caused by naturalisation of increasing share of the society, that feel to be marginalised and kept in bay. This necessarily disrupts the the social economic networking, that is necessary for social interrelationships, enabling effective and smooth exchange of goods and services.

From → Economist view, MENUE

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