Deductive logical theory that allows to understand
economic phenomena in terms of the quantities of economic goods (total and
exchanged), according to their behavior governed by the
natural laws of: decreasing marginal utility of wealth
(subjective) and relative marginal utility of exchange
(solidarity). |
Where you can only appreciate the presence of two economic entities
governed by two natural laws, regardless of: theory of interest, theory of
currency (money), theory of prices,… we show:
The economy deals with subjective values, whose dimension is utility.
Values determine prices
– not objectivism present in supply and demand.
The subjective value is measurable
– the monetary calculation is feasible without the concurrence of
monetary prices.
The cross-correlation of the exchange, between relative values
and exchanged quantities, explains the failure of the relation of
exchange of Jevons, foundation of all economic theory that we know.
The theory of economic unit of measure (neutral economic entity) is independent of the theory of currency (non-neutral economic entity).
The distribution of wealth is explained according to the theory
of subjective value, not of prices, which imply objective value.
The TET and TER are ratified, while the economic time is the only
economic good that participates in this circumstance: v = P = 1, besides corroborating that i$ = / ≡ P$.
Evolutionary Optimal (EO), replacing the inconsistent Pareto Optimal.
“Theoretical justification of constant monetary expansion of 2 %?
”
And much more: quantitative theory reduced to coefficient of rotation;
unnecessary Gresham´s Law; unnecessary theory of monetary cycles (reduced
to price control); Positive Phillips Curve (from theory); theoretical
failure of welfare theory (Pigou);…
Thus, J.S. Mill was correct that a theory of adequate value is the
essential basis for building an economic theory, but he did so from his
vantage point of the theory of objective value from which he assimilated
value to price. So convinced was he ventured to say:
“Fortunately, there is nothing left to clarify in the laws of value,
neither for the present writers nor for the future: the theory is
complete.”
He quotes that Marshall, in the same way ratified:
“Thus, this book is not descriptive, does not deal constructively with real
problems, but establishes the theoretical foundation of our knowledge of
the causes that govern value ...”
We can say that
economics is the science of the study of relative values. From them we can understand the fundamentals of an Efficient and Equitable Economic Evolution (E4) of a society, where each and all is better. Unlike
the current state, characterized by inefficient and inequitable
distribution of wealth, with recurrent (and necessary) crises, that is a
consequence of the existing institutions, arising under the theory of
objective value: prices-prices.
The greatest backwardness of human knowledge is in the social sciences.
Among them, the one of greater influence is the economy. In this paper the
fatal error of the economic theory that we know, that of pretending to
explain in terms of prices-costs, is amended.
Thus, the failures of economic-social institutions recognize their origin
in the failure of the theories that gave rise to them. The economic theory was not consistent.
As in many aspects of humanity, the advancement of science has enabled us
to find solutions to problems that were considered as preponderant springs
of politics, ethics, morals and/or religion. I believe that the SSET
will be able to collaborate on the economic necessities.
The SSET is guiding us and reversing the relative backwardness of
economic and social institutions, facing a new world of vertiginous and
constant technological changes ―an explosive mix that explains the
prevailing political-social bewilderment.
The SSET, through relative values, allow us to understand and
measure “the invisible hand” of Adam Smith.