POLYPERMAL CRISIS OF THE GLOBAL ECONOMY, NEW TRENDS AND PARADIGMS OF ECONOMIC THINKING

Amarjargal. R (Ph. D), 21^st Prime minister of Mongolia,

Chairman of the Board of Trustees of UFE  

Davaadorj.Ts (Sc. D),  member of the Board of Trustees of UFE, honorary professor

Abstract 

Scientists and researchers have called the global economic crisis the lost decade and the period of the polyperma crisis.

Along with development, human society has started to move to a new way of life to deal with the polyperma (multifaceted and permanent) crisis. Current global civilization economics:

• did not manage to prevent changes in nature, environment, and climate nor avoid harmful consequences of HIV, SARS, MERS, EBOLA, pig flu, bird flu etc., 
• The relations between the states could not be freed from the most barbaric forms and wars,
• on the contrary, it is expected that adapting to them will be put forward as a strategic goal,
• and the final results of economic activities of the human society have been accelerated and, under certain conditions, have turned into even more harmful,

These situations indicate the need to develop and introduce innovative economic thinking and paradigms.

Keywords: Economic democracy, polycrisis, economic new thinking 

NEW THINKING OF ECONOMIC GROWTH AND CRISIS 

According to conventional economic thought, the availability of selected internal factors for economic growth and expansion, such as labor, energy, and raw material resources, seem to be sufficient, but the world economy has not been able to get rid of stagnation for a long time.

Now, the action and impact of new external conditions that limit the use of these internal factors of economic growth and development have increased significantly.

Irreversible and unfavorable changes in the world's nature, climate, and environment, as well as distrust and war, which reject the selected principles of countries and international economic relations, will have a significant negative impact on the world's economic development.

The operation and impact of new external conditions that limit the use of labor, capital, and land (L, C, Land), which determine economic growth and development, have significantly increased and become active.

• More than three years have passed since the pandemic, but the global crisis continues.
• As new pandemic mutations spread, climate change conditions deepen.
• Dangerous events are likely to increase, and the reality of war will intensify.

The crisis has expanded in the form of a polycrisis involving all types of human social life, or a crisis of the entire civilization, and it is more likely to last permanently for a long time.

It is natural for people to understand socio-economic crisis primarily by significant signs and indicators of deterioration and difficulty in people's daily life, such as slow economic growth, increased unemployment, excessive inflation, and stagflation in some countries.

In the history of economic development, crises have occurred repeatedly and cyclically, but after a certain period of time, the economy has recovered and continued to grow again.

 Even the GDP per capita indicator is unable to show the reality of the country's economy.

In such conditions where the income levels of citizens of countries differ significantly, the "GDP per capita" is only intended to be used for political propaganda.

 However, the "GDP per median capita" indicator can accurately show the income level of working people, but it cannot represent the reality of the poor.

 Evolution and changes

The national calculation orientation that is still used today originates from the stage of economic development of human society, or the stage of poverty and scarcity. This attitude and paradigm of thinking has been used as a tradition in people's economic activities for almost 200 years.

Nowadays, the economic activity of human society has taken on a different meaning; the roles and responsibilities of the participants have changed, the conflict between their interests has deepened, and the perceptions and attitudes about economic development, especially about economic results and returns, have become significantly different.

The rich and super-rich in almost every country have their own relatively isolated, unique and innovative, high-priced, luxury goods and services market.

 In the process of technological development:

• the rate of material production has decreased significantly

• the position of the components of the production function has changed considerably,

•  the role of simple labor has decreased much
•  capital finance and a high-intelligence labor-focused economy will be developed.

Now, the concept of economic growth and expansion is not limited to the repetition and growth of the past, but is often aimed at the introduction of new types of events, the spread of innovation, and the development of a unique form of civilization.

Furthermore, today's human society's economic activities are expected to expand and develop in the near space, along with the environment limited by the surface of the earth.

• In other words, the innovative social activity called the space economy will set in the coming years. The space economy is still at an early age, but the return on investment and efficiency has reached a level equal to that of traditional economies.
• Currently, the scale of the space economy is estimated at about half a trillion dollars, but according to the scientist's calculations, it can grow by an average of 9 percent in the coming years. (Ryan Brukardt, 2023).

At the same time, the traditional sectors of the economy such as coal and oil mining and processing industries which have served as the energy base of human civilization for hundreds of years,  will be completely closed in the near future, and it is inevitable that the energy economy will fundamentally change.

Innovation in the energy sector, especially the production of sufficient renewable energy, faces high risks and is expected to create uncertainty. In America, a commercial bank that invested heavily in the renewable energy sector recently went bankrupt.

In general, the benefits of modern innovative technologies are very uncertain and the required capital and resources tend to increase significantly, putting a lot of pressure on the banking and financial system, and may even restore a situation similar to the financial crisis of 2008.

 Global geopolitical trends will also change considerably, the "regular" war cycle will resume, and the defense and military economy will likely expand into a priority economy.

A sustainable economy may also develop to compensate for the damage caused by natural disasters and climate change.

The main demographic problems developed in the process of human civilization have become paradoxical: the population growth of developed countries has slowed down while, the population of poor countries has increased, and the flow of immigrants has become chaotic.

After the Covid-19 pandemic, the health protection activities of the global population have expanded, and as predicted by the French economist Jacques de Larosiere, health, education, social care, and environmental issues are likely to be integrated in the form of an "economy of human life." 

 These new trends tend to increase the demand for capital and highly intelligent personnel and limit the economic participation of ordinary working people. In many countries of the world, entertainment and big sports activities intended for wealthy citizens have become the characteristics of diversified economies, and the participation of ordinary working people is expected to decrease, and their income may decrease.

 The main energy resources (coal and oil), which are the basis of current civilization, have become more harmful than effective, and new forms of energy are represented in uncertain conditions, so the energy economy, in general, tends to suffer from a permanent type of crisis. Generally, it is pointless to explain the polyperma crisis and the factors that provoked it in terms of outbreaks of epidemics, environmental degradation, changes, and the effects of war. It is reasonable to believe that there is a need to study the crisis of civilization in connection with its dynamic changes, mature historical trajectory, and the nature of the internal factors of conflict.

 The progress of civilization up to now has been provided a synergistic way by scientific and technological revolutions (industrial), the general and specialized knowledge and experiences of the entire human society based on them, the development of education and culture, as well as the positive dynamics of the political and social organizational systems of the human society. , apparently supported.

The economic principle of decreasing productivity and income also affects the general results of civilization. For example:

¹ Advisor to the President at BNP Paribas since 1998, President of the European Bank for Reconstruction and Development (1993-1998)

• Almost everyone has felt that the effects of the first revolutions in science and technology were extremely high, and that the positive effects of today's innovations on human society are relatively decreasing.
• Many innovative events in the age of digital information and artificial intelligence have not achieved significant and perceptible success in improving the quality of human moral life, protecting nature, and maintaining the environment.
•  On the contrary, the opportunity to use artificial intelligence widely in social life has a tendency to negatively affect individual freedom, choice, and morality.

At the same time, any technological revolutions and innovations have positive effects as well as negative effects, and in the process of widespread penetration into life, they are manifested in many forms that have not been observed before. , has the habit and principle of self-denial for a long time.

What we perceive as a crisis seems to be part of a transformation that covers the whole of Human Society.

1.  Today's social and economic systems, their internal and external interrelationships and interactions, are based on the technologies of the pre-industrial revolutions, and information technologies are deepening the crisis. (In fact, right now, there is no conceptual term that defines the time we live in and expresses its nature.) . There are many new terms such as de-globalization, re-globalization, geopolitical dispersion, and Anthropocene, and it is impossible to say how long they exist)
2.  The nation-state and the core of society are increasingly atomized into tribes, families, individuals, etc.
3. World politics and geopolitics used to be understood as relations between countries, but nowadays it has become a field of competition for global, transnational and monopolistic corporations.
4. It has become the most beneficial business to brainwash a person, to focus his thoughts, desires, and soul on a certain direction. Here, we are not talking about ordinary advertising, but about tools that manipulate people's consciousness as a whole (social networks such as Facebook, Tik Tok, etc.).
5. Cognitive processes and outcomes are now questionable. It is no longer easy to tell directly whether the thought that arises when we encounter an object is my intellectual judgement or something that is implanted at the subconscious level of my body.
6. Along with this, the traditional system of knowledge and education, the social value,  and importance are decreasing dramatically.
7. The management system at all levels has lost its credibility. A management system flooded with information and a huge effort to brainwash the people (the Mongolian government has long since moved from the government palace to social networks) All these have led them to believe their own fake information. The ability to look at the problem holistically and solve it, has disappeared. There is a need to attract potential people (they are very difficult to manage) at all levels of management, especially in the civil service, but don't know how to manage them.
8. We call feudalism a system with leaders who are not responsible to anyone. 
9. 1147 unheard and unaccountable people head corporations that constitute 60% of the world's economy, and their core 150 corporations control 40% of the world's economy.  Accountability to shareholders is a "deception" of others for a mega and meta corporation.
10. The government notices unemployment, even if it's a lie or truth, but it is a matter of no concern to corporations.  Therefore, the value of human labor is decreasing. The owners of the world have the economic opportunity to keep the marginalized people in their homes, let them enjoy themselves with fast food, Netflix, and Facebook, and separate them from society and especially political life.
11. The middle class is clearly drying up. In reality, there are more and more lumpen people who have homes, cars, and washing machines in society. A social revolution is approaching.

 There is a whole class that lives parasitically on the state budget. For example, the middle class of Mongolia usually earns from the state budget in a parasitic way and becomes the beneficiaries. ₆

The key role of the centers of economic development of society, and that centralized and civilized humanity called urbanization, which represents one of the great achievements of civilization, has also seen a sharp increase in the negative effects of the great events since the end of the last century. Currently, the world's major cities are in a poor economic situation; their air pollution has a significant negative impact on people's health, and expected to turn into the main factors of traffic jams for millions of vehicles. It is reasonable to consider the epidemic of 2019 as a negative effect of overpopulation. The urbanization has begun to turn into a condition of a significant increase in the energy consumption of society in a less efficient way and a significant amount of time spent by citizens on a variety of less productive activities. Population centralization or, urbanization will also cause a dramatic increase in the demand for artificial food products that are scarce and harmful to human health, and are more likely to turn into harmful to society in the future.

Many innovative events in the age of information, digital, and artificial intelligence have not achieved significant and perceptible success in improving the quality of human moral life, protecting the natural world, and maintaining the environment. However, the opportunity to use artificial intelligence widely in social life has a tendency to negatively affect individual freedom, choice, and morality. Today, when a huge database of information is formed and processed by artificial intelligence, it is difficult to distinguish the truth from rumors and lies, and to make the right choice. For example, AICG (AI Content Generation) technology makes it impossible to distinguish between truth and false, and it is now possible to impose one's opinion on individuals and society. It is likely to be a more dangerous, destructive action, and riskier than atomic weapons, famine, and plague.(Karelov,2022)

 It is unfortunate that the political and social organization systems of some countries of the world, which are the main important part of the structure of today's civilization, are very backward in that sense and still retain their status as an imperial form that has been traditional since the Middle Ages.

In the history of economic development and industrial revolutions, liberal democratic forms of government were formed in Europe and North America, but in the 20th century, they could not expand to other countries except India, Japan, South Korea, and Australia, and many powers in Asia, Africa, and the Middle East did not manage to get rid of authoritarian regimes.

In general, according to the conclusions of recent political and social studies, the crisis of the modern world civilization is significantly more than the conflict between the high level of human social science and technology development and the backward form of social organization that dominates in many countries, that is, the government based on violence, fear, and conflict is proven to be relevant.

LACK OF ECONOMIC DEMOCRACY

 There is no basis for the concept of a completely isolated and autonomous economy beyond civilization, social, and individual life.

Only the monetary results of people's activities followed every form and branch of social life, and their financial expression have been understood as economy. To simplify, economics is an important concept and indicator that shows whether or not any human activity is necessary for individuals and society. In the historical development, large-scale animal husbandry and agriculture, which were separated from household farming and specialized and cooperative farming, began to be produced in sufficient quantities of food products that are essential for people's lives, and the concept and nature of the agricultural economy arose. Agricultural economics includes all aspects of food production, distribution, trade, and final consumption.

 Today, almost all human social and individual activities have an economic meaning, and since money is represented by finance, the participating individual has become an economic human (Homo economicus) (Mill, 1836).

“Homo economicus” - All individuals of any country should participate in economic activities with equal rights, actively and consciously, and the profit from these actions and activities will be expressed in terms of the principle that directly depends on their contribution and productivity, and with conditions and indicators such as equal ownership of property, capital and wealth, is the concept of verification.

In short, "Homo economicus" reflects the main principles, and nature of economic democracy, and it is a witness that economic activity has had democratic meaning and potential since the time of its first formation and development.

The main principle, content, and nature of economic democracy is expressed by the principle that all individuals of any country participate in economic activities with equal rights, actively and consciously, and that the profits from these actions and activities directly depend on their contribution and productivity, and guaranteed by conditions and parameters such as equal rights to own property, capital, and wealth. These principles of the theory of economic democracy are fully consistent with the meaning of the "Universal Declaration of Human Rights" adopted by the United Nations General Assembly in 1948.  The main principles of economic democracy are working in practical life, it will be implemented through actions such as increasing and expanding the number of people, the scope of participation, increasing income and wealth, and making choices and decisions at the micro and macro levels.

 The main principles of economic democracy are working in practical life, it will be implemented through actions such as increasing and expanding the number of people, the scope of participation, increasing income and wealth, and making choices and decisions at the micro and macro levels.

Based on this logical meaning, the more people of working age in any country work, participate in economic activities, have high wages, income, and have a satisfied life, the more economic democracy is implemented, the more optimistic and economically developed and progressive the country is. 

If there is talk or information about the economic crisis in the society, it means that a certain part of the people's activity has been affected by the crisis, and it seems the overall economy-macroeconomy of the country has lost its balance, the value of the accumulated wealth is decreasing, and harmful for the environment. First of all, the economic crisis affects the principles of economic democracy and causes unemployment.

 The current economic crisis is called a polyperma crisis, which means that there is a crisis of work and events covering almost all sectors of human society, and economic democracy tends to shrink, and it is expected to last permanently and for a long time.

On the other hand, the stagnation of economic development, the occurrence of crises in the form of polyperma, and the escalating phenomena can be formulated as the result of the deepening and activation of the negative effects accumulated over a long period of time in the dynamics of human society and civilization, creating a negative synergy.

In general, the dynamics of economic development are not always in the form of growth and expansion; development and crisis are repeated in the form of cycles, and the general direction tends to grow and expand. The accumulated negative effects of economic development are likely to be manifested in the form of a crisis with a delay in time.

It is clear that the war provoked by Russia has had a significant impact on the current crisis.

 War completely rejects globalization, internationalization, cooperation, and trade, destroys the work and life of all countries and individuals, even democracy, and is the main condition for fear and distrust in the future.

 In fact, if all the individuals of the world in the form of "Homo economicus" are fully included and actively participate in the economic life, the status of economic democracy will reach its peak, and the economy of the world, countries, and households will have the highest productivity. It would be possible to achieve good results and have a relatively friendly impact on the environment.

It is considered that political and social organization system democracy and economic democracy are similar in terms of meaning, but economic democracy has a wider scope of active participation of individuals in real life, and is more effective in the form of direct participation with the opportunity to reflect the decisions of each person. 

At the moment when economic democracy is advanced, the main indicator of economic dynamics will be the optimal or correct dimension, and the main goal will be the high quality of production and services needed by the people of that time, the real life of the masses is satisfied, environment friendly, and peaceful.

 Economic democracy is initially in the form of poverty and deprivation of all people in the world, but it originates from the household that covers the activities of all countries and citizens, and eventually, it takes the form of specialized large-scale production, internal and external trade, commerce, banking, finance, and investment in various forms. It has expanded and evolved from manual production to modern machine, mass production, information, and service era.

 Human social and economic activity is a historical process of evolution and development, and there is a lot of dynamic change, especially since the structure and roles of participating subjects are naturally changing rapidly.

Today's economic activity, which continues as a market economy, will be carried out in the form of circulation, which, on the one hand, covers the flow and movement of physical products and services, and, on the other hand, shows their cost and money.

According to economic theory and practice, in the development of capitalism, the profits of capitalists have grown faster than the wages of workers, have expanded enormously, and financed major achievements of civilization. On the other hand, there are many facts that the number of employees and its range has expanded, the amount of wages has also increased, and the standard of living has improved dramatically.

Many subjects and parties will participate in the economic revolution, but they will generally consist of the main parts: households, businesses, banking and financial representatives, and government participation.

In a market economy, goods and services are produced as a result of business operations, and the final consumers are households. Also household representatives-employees and laborers are paid for working in businesses to purchase goods and services, which in economic terms is considered labor supply.

Economic circulation involves the supply of labor from the household to the business, and the business, in turn, supplies goods to the household.  The circulating money model will be implemented as a copy of it, but with a wider range of participating entities. The government will collect taxes from businesses that produce and sell goods and from workers who receive wages. New cash flow will be generated from the budget funds in the form of pensions and allowances for households and workers. Also, business enterprises will take loans and investments from the banking and financial sector. In this way, government and banking financial activities are increasingly dependent on the monetary form of circulation. Since the circulation of the market economy is implemented simultaneously through physical products and cash flows, there are many participants and subjects.

 An economic activity that continues in the form of economic circulation means that every participating entity uses the services and supplies provided by other parties.

At the right time, trade will be implemented in the form of free trade, according to A. Smith.

Quoting A. Smith's famous philosophy in this regard: "It is not the good intentions of the butcher, the brewer, the baker, but the act of self-interest that puts food in front of us. We appeal to their selfishness rather than their humanity, reminding them of their profit rather than our own needs.  “No one who moves his capital and labor has any motivation to think about the interests of the masses... He does not even know how to protect their interests... Most of the time, the act of striving for his own interests automatically becomes beneficial for the masses”.(Smith, 1776)

In other words, economic activity has a democratic meaning, in which no subject can be forced to work on another, and whose income cannot be taken. Only implemented through commercial trade, participation equity, free trade, and decisions. 

 By the way, it should be noted that the principles of economic democracy differ from the principles of equal distribution of moral and humanitarian justice.

Economic democracy covers only the scope of economic activities and represents the natural economic freedom or equality of interests of the participating subjects. In other words, economic democracy is implemented in the form of mutually beneficial payments or receiving profits (equivalent) from participating parties for their contribution to the economic activity.

According to the formulation of  Smith. A, any subject entering into market economic relations, "in all reasonable commerce, both the trader and the buyer should win, but one should not harm the other."

 Based on the principles of philosophical thinking, the basis of economic democracy is a subject that participates in economic activities; the subjects other than the institution called the state, capital, factory owners, and workers are all the functions of producers (suppliers) on the one hand and consumers (buyers) on the other. and the principle of dual roles. Based on this paradigm of thinking, the development and scope of economic democracy of any nation is primarily expressed by an increase in the number of all subjects actively participating in economic activities, or an increase in their percentage in the total population.

 The main controversial issue of economic democracy is the concept of universal recognition of the methods and calculation of the level of participation of subjects, their contribution and the amount of profit, income, and salary received as payment, and the possibility of implementation in real life.

 In the 20th century, until the time when capitalism was perfected, many scientists and speculators preached that the main feature of the capitalist economy is that workers and laborers participate in production and construction and their contribution was under evaluated, underpaid in the meantime capitalists were benefited. 

 According to economic theory and practice, during the development of capitalism, the profits of capitalists grew and expanded more rapidly than the wages of workers, and financed many great achievements of civilization. 

On the other hand, there are many facts that the number of employees and its range has expanded, the amount of wages has also increased, and the standard of living has improved dramatically. (Skousen, 2001).

Wesleyan University professor Stanley Lebergott has analyzed statistics to show that the standard of living in America improved between 1900 and 1970.

Source: The Making of Modern Economics, Mark Skousen (2001)

 (York, 2020) As an example of the highly developed American country, the number of citizens who earned income and paid taxes in the 40 years from 1980 to 2019 increased by 56% to 145 million people.

The number of voluntary taxpayers and the amount of paid taxes can be an indicator of the deepening of economic democracy.

 The power of economic democracy is realized in a synergistic manner that significantly accelerates economic development by aligning the goals of millions of working people. On the other hand, the wrong choices and decisions of the working masses have led to macroeconomic crisis and difficulties in some situations. The main cause of the Great economic depression of the last century, 1929-1932, is explained by the fact that the income of the working masses of that time increased, life improved dramatically, and almost everyone switched to saving more, and spending less, which reduced the overall macroeconomic demand and reduced economic activity.

One of the fundamental and major issues of participation in economic democracy is the concept of the role of contributors in the activity of power and governance and the finalization of choices.

 In this regard, it can be observed that the main meaning of the essay developed by artificial intelligence (OpenAI-AI research and deployment company, 2015-2023) is that the problem of economic democracy is limited only to the scope of governance and choice and decision-making. According to him (AI), the goal of economic democracy should be to ensure that governance is shared by many and not taken by a few groups and corporations. Continuing this idea, he wrote that "the meaning of economic democracy is implemented through power and governance, and it is expressed in the hope that decision-making activities will be implemented widely and openly, not by a few people and elites."

In general, this important issue of governance and decision-making and their implementation is only one important component of economic democracy and, often at the micro level, has greater impact in the short term.  It should be noted once again that in the long evolution of civilization and economic development, the main backbone of economic democracy, especially at the macro level, is determined only by the broad participation of workers and their high level of education.

 Most of the issues of governance and decision-making are only compatible with the consciousness and choices of workers and laborers, the majority of society, and are fully implemented and realized at the time they accept. In other words, the governance and decision-making of large companies and monopolies, which participate in economic activities, is not directly implemented in human social life, but is a natural process of evolutionary development that is implemented only through society.

 Almost all the achievements and successes of the industrialization revolutions, which defined the direction of human social development, were realized in the form of technological development due to the influence of the first accumulation and the decisive power of capital at that time. However the final results and products of those historical events were accepted and produced by workers and laborers universally, and it was implemented by widely participating in the application process.

According to the principle of economic theory, the final decision-making of the masses of workers and laborers is usually manifested at the macroeconomic level and is implemented through citizens' consumption, which is a component of the country's GDP (𝐶 + 𝐼 + 𝐺 + 𝑋𝑛)².

At the end of the 20th century, 60-70% of GDP production and consumption, which shows the scale and size of the macroeconomics of developed countries, was consumed by citizens (C). Энэ 

 In theory, this means that the working masses have the power to make choices and decisions in terms of their income and wages, on the one hand, and on the other hand, they have accepted their decisions and choices by fully using the products and services produced by businesses. In this way, working individuals will come together in large numbers and become a factor in the implementation of economic democracy at the macro-economic level.

 At the same time, there is no reason to deny the high importance of governance and decision-making in business. Of course, the power, choice and decision-making of the top management of big business is more powerful than the choice and decision of the ordinary working person at the micro level.

On the other hand, the state restricts property rights and negotiation rights, which are necessary to ensure the ability of the business community to ensure its governance, and sometimes acts of obvious robbery, the continuous increase of the state's participation in the economy, populist political activities that oppose the wealth creators and encourage the beggar mentality of the lumpen. And income inequality, the backwardness of the financial system, the corruption of courts, prosecutors, and law enforcement agencies, and the political system, such as the corrupt state structures, parties, and the perverse system of the electoral system, are seriously ignoring the economic democracy of the business sector.

² GDP=Private Consumption + Gross Private Investment + Government Investment + Government Spending + Net Export

Economic democracy should be implemented at all stages of production, distribution, commercial exchange, and consumption of social wealth, as well as their interrelationships, and the positive/negative synergies that arise from them.  For example, in regard to the current situation of Mongolia's development and the external data, potential theory and policy research are greatly missed.

 As we understand, at the macro and sectoral level, which of the above-mentioned 4 stages should be prioritized in Mongolia's current development stage, and under what conditions should support the creative thinking of the masses, it is necessary to determine the government policies and activities.

 There is a correlation between economic development and democracy indicators. As the country's economy develops, the number of employees and working people will increase, and in turn, the number of employees and their participation will increase as one of the important factors for economic growth. In simple terms, “Have more people, have more food,” but the concept was a model of extensive development that served unchallenged until the 18th century.

 In today's situation, "the person who needs to be added" must meet the demands of the 21^st  century, and for this, the issue of developing people, and investing in them and children should be one of the criteria of economic democracy.

 In practical life, it is natural that the results of business operations are profitable and generally satisfied when the choices and decisions of many top business managers and their wise and conscious attitude and relationships are in line with the interests of the working masses.

Until the beginning of the 20th century, during the development of industrial revolutions, the participation and importance of workers and laborers in many sectors of economic life were relatively high. However, at the end of the 20th century, during the technological and information revolutions, the participation of capital increased, the role of workers decreased, and the scope of economic democracy tended to shrink.

 Due to the benefits and direct influence of political and economic democracy, the developed countries of America and Europe have developed by leaps and bounds economically in the 20th century.  Western researchers can explain the common nature of economic development and the influence of political and economic democracy only by the characteristics of the development of American and European countries, as well as the creative and hardworking qualities of people.

Amazingly, America produced 1 million cars for the first time in the world  at the beginning of the 20th century. And the individual who designed and implemented it is Henry Ford. Now there are more and more researchers who are biographers of Henry Ford in America. Genius Henry Ford is a capitalist company owner, entrepreneur manager, innovator, pioneer, bold and intelligent person who will be recorded in the history of economic development.

³For example, Bloomberg's recent television program has shown significant facts about the automobile industry that made America a leading and powerful country and the individuals behind it.

He correctly predicted that automobile production and consumption will become an important factor in the development of the American economy.

  Ford introduced an outwardly rational system of economic democracy into large-scale industry, vastly increasing economic efficiency, sharing his fair share of profits with the thousands of ordinary people who worked in his factories, and a practical method of alleviating the conflict between capitalists and working people for decades, and known for its systematic implementation. When Henry Ford met with his employees, he said, "I am not paying you from my own share, the machine you manufacture is what pays you” (Burlingame, 1954). Also, he was able to mass-produce the cheapest model of his car, Ford-T, on a conveyor belt that he created, drastically reducing its cost, and he was even able to devise a way to widely sell it to his own employees. Ford was the first to introduce an 8-hour work day at his factory and implemented many principles of economic democracy, such as raising the hourly wage to $5.

This philosophy of economic democracy has been able to deny and postpone K. Marx's commandment about the "irreconcilable conflict between capitalists and workers and the inevitable destruction of the capitalist system due to it" for a whole century.

 However, it should be noted that these mentioned events stemmed from the inner nature of economic democracy and were not directly related to the development process. China can be cited as a recent example that has managed to temporarily implement this system in an optimal form in its own country. During the globalization of the world economy, with the economic policy and financial support of the Western countries, China developed its handcraft industry that lasted for hundreds of years at the end of the 20th century. It has become a modern, industrialized, and economically powerful country due to the influence of democratic government.

 In the process of dynamic economic development, the principle that made it possible to temporarily implement democracy is the principle of economic centralization, and the increase in the scale of capital, and accordingly, the number of workers and their participation increase. As a result of the industrial revolutions, by the beginning of the 20th century, oil production increased significantly, cast iron and steel production in the industry increased dramatically, automobile production and the chemical industry developed rapidly, which greatly accelerated the accumulation and centralization of capital in the American and European industries. Also, at this time, the banking and financial system began to develop independently, which had a positive effect on the centralization of capital. The initial accumulation and centralization of capital provided the opportunity to create large firms and companies in the practical life of the economy, and millions of laborers worked in these factories, which greatly increased labor productivity and increased the income and profits of capitalists. 

In this sense, the reason for the difference between economically advanced and poor developed countries can be formulated in the simplest way: the percentage of workers and laborers in the total population of developed countries is high, their productivity is higher, and their income is higher. In other words, it can be concluded that economic participation and activity of workers and laborers in developed countries is higher or one of the important indicators of economic democracy is relatively higher.

 There is a correlation between economic development and democracy indicators. As the country's economy develops, the number of employees and working people will increase, and in turn, the number of employees and their participation will increase as one of the important conditions for economic growth.

Impact of technology and innovation

In the historical process of global economic development, the demand for capital has increased dramatically in accordance with the development of science and technology, and the amount of money required for "per innovation" has grown significantly as new techniques and technologies have been introduced. In accordance with the trend of increasing the general scope and scale of production and services, the importance of financial capital has increased, and the developed countries of the West have been able to strengthen their status as truly "capitalist."

There have been significant changes in the economic growth and development factors, and the sharp increase in financial and capital participation have led to the tendency for the conflict between the goal of spreading economic democracy and principles, the common interests of the human society, its majority and working people,  is the main reason for the economic crisis .

The main conflict in our society today is the need to expand market relations by spreading economic democracy, on the one hand, and on the other hand, production relations that cannot get rid of the "spots of the old society" in K. Marx's formula of imbalances on the macro and micro levels.  One more thing to emphasize: As the economic crisis hits, economic democracy tends to shrink more and more. To conclude from these situations, economic democracy cannot constantly accompany it in the process of human society and civilization, and because it does not arise from the nature of individual morals, behavior, interest in life, and the nature of the economy, it is a temporary phenomenon with a general tendency to decrease and shrink.

 The main participants in the market economy are the economic interests of the capitalists, factory owners, high-level entrepreneurs and managers (capitalists, industrial leaders, organizers) on the one hand, and manual laborers (workers, laborers) on the other hand. Different, unique, and even contradicting each other became evident in the history.

 At the end of the 20th century, the participation of capital and investment in the development of technology, information, and the digital world increased, and the role of ordinary labor became less and less.

 (York, 2020). According to the statistics of developed America, in the 40 years from 1980 to 2019, the economy (in terms of GDP) grew 7.5 times, and in 1980, the total number of workers increased from 94.5 million to 145 million in 2019, an increase of more than 56 percent. However, the income of all citizens has increased significantly, and there has been a significant change in income distribution, and the income of the rich has risen rapidly.

  In 1980, the cash income of all workers was 1.6 trillion dollars, including the income of the richest 1 percent, which accounted for 138 billion dollars, or 8 percent of the total income. Half of the workers (50 percent), or the low-income group, actually earned a total of $342 billion, or 17 percent of total income. In 2019, the income of all workers reached 11.9 trillion dollars and increased by 7.3 times, including the income of the richest 1 percent by 17.3 times, and the income of those belonging to the other 50 percent by 4.7 times.

A detailed calculation shows that in the last 20 years of the past 40 years, the speed of these changes has accelerated compared to the first 20 years. Today, people's income levels differ dramatically, which can be understood as the difference between the average annual income of the top 1 percent of the rich and the average annual income of the bottom 50 percent.

From 1980 to 2019, the cash income of the richest 1 percent increased 10.9 times, and the income of the lowest 50 percent increased 3.1 times. The average income of the rich was 1.6 million dollars in 2019, while the average income of the poor was 18,900 dollars, an immediate difference of 85 times. happened. The large disparity between the incomes of the rich and ordinary working people naturally causes a corresponding shift in the cyclical process of macroeconomic balance.

Two relatively isolated and parallel revolutions in the country's macroeconomics due to the excessive increase in the income gap of all workers:

• on the one hand, a market of innovative, luxurious and high-quality, high-priced products and services with only the participation of the rich,
• on the other hand, it is implemented as a traditional market for the income and consumption of ordinary workers and

● the relationship between these has weakened, and another negative effect has begun the cause of macroeconomic difficulties.

This will make it difficult for a person to enter a variety of innovative products, services, and activities in the social life in a short period of time, and to formulate their positive and negative consequences in advance, and most importantly, these technologies, new actions, and innovations are the trends and real needs of the evolution of civilization. There is a risk of drastically reducing the ability to determine and calculate suitability.

 It should be reminded that the basic economic contradictions arising in the current stage of society, and the imbalances at various levels of the economy, especially the extreme income disparity, may lead to a social revolution in the distant future.

Finally, it is time for everyone to realize the real need to drastically improve the social responsibility of the state and big businesses in order to extend and continue the positive effects of economic democracy and to live in harmony with the evolution and development trends of human society and civilization.

o O o

References

Burlingame, R. (1954). Henry Ford: A Great Life in Brief. New York: Knopf.

Mill, J. S. (1836). On the definition of Political Economy and on the method of investigation proper to it.

OpenAI-AI research and deployment company . (2015-2023). OpenAI. OpenAI: https://openai.com/product/gpt-4-ээс Гаргасан

Ryan Brukardt, J. K. (2023). Space: The missing element of your strategy. McKinsey & Company.

Skousen, M. (2001). The Making of Modern Economics: The Lives and Ideas of the Great Thinkers . New York: M.E. Sharpe Inc.

Smith, A. (1776). The Wealth of the Nation. Nepko publishig.

York, E. (2020). Summary of the Latest Federal Income Tax Data. Washington DC: Tax Foundation.

Карелов, С. (2022). AICG technology.

OpenAI-AI research and deployment company . (2015-2023). OpenAI. Retrieved from OpenAI: https://openai.com/product/gpt-4