02.03.2002 IIFOR: IJ@ have talked about breakthrough, see the light, etc, as  we have had a revelation. However we have only had  a  scientifical eureka, similar to e = mcc. We are not "tåkefyrster", "fogarchs", but ordinary scientists. In short we have made people vs bureaucracy ecocirc, a framework for a new national, or more correct, social accounting, say, for UN-statistics,  - measuring: 

A. the people's living-standard in contrast to the bureuacracy , i.e. the top of the social pyramide, and the whole population - the "nation", and

B. The system or bureaucracy costs, the "top" remuneration plus income forgone due to bureacracy in the system, that via the principles of accounting by double entry turn out to be a broadly defined profitmargin of society.

It is investigated  1.principally, 2. with a simple very  operational approximation, and  3. by indicating concrete proposals for improvements. The framework and the results so far, seen in a context, are presented at http://www.anarchy.no/aneco1.html chapter II. Here we will just put up a brief summary:

Varibles and symbols: A export; B import; C consumption, i.e. public + private; I net real investment, i.e. public + private; (C+I+A-B) total demand, i.e. nominally; R = total supply R , net national product, i.e. nominally (R = C+I+A-B); p price level for x, x net national product volume principally measured by output (i.e not input) in private and public sector, (R = px); a averagely workers productivity; r interest rate; K real capital; N employment, i.e. factual supply equal to factual demand of labor, x = aN; k capital/employment ratio; N(u) unemployment, N(full) full employment, i.e. total work force, potential labor supply, not factual, it is however an aim for society to use the whole potential, N = N(full); w = average wage, for the people. R net national product = realincome R = mR + wN + rK, distribution of realincome, where m = profit margin, i.e. market power coefficient (p - b')/p + scale coefficient ( b' - b)/p, were b' is marginal costs and b is average costs of resources, payments for resources, used to produce x, i.e. m = (p-b')/p + (b'-b)/p = (p-b)/p), where b = (wN+rK)/x, and b' = d(wN+rK)/dx. 100% anarchy means zero market power (and a reasonable = optimal high N(full) = N). The scale coefficient reflects general scarcity of resources (positive) vs large scale effects (negative), summa seen all in all, for the whole production in the society, x.

Ecocirc for people vs bureaucracy - democratic ecocirc:

A crude, first approximation to the principles mentioned above, is illustrated by the following example, quoted from http://www.anarchy.no/report1.html :"Environmental quality was among the lifestyle indicators evaluated in the U.N. development rankings, in which the United States placed sixth among the 162 countries examined. Per capita GDP is highest in the United States, at $31,872 compared with Norway's $28,433. But outright wealth in the U.S. was superseded by a less effective war on poverty at home and abroad, shorter life expectancy and higher crime rates.

Per capita average income, related to GDP (GNP) or NDP (NNP) is not a valid measure of income for the people, i.e. in contrast to the remuneration to the bureaucracy broadly defined, economical and political/administrative, in private and public sector,  and system costs in general. The grassroots' payment, i.e. for the people, may better be estimated as the average remuneration (per head) of the poorest majority of the population, say, the 50,0d % (d is a small number > 0) that have less than the median income + 1 $, which is far below the average income, especially in the very plutarchist USA. The average income of the relatively poorest majority of the population, are in Norway probably way ahead of the similar in USA."

Thus, the average income, say, measured by purchasing power parities (PPP) or directly in US$ (or NAT/ALC), for the poorest majority of the population, may be used as a first crude approximation of the people's average income, i.e. not the bureaucracy's. By multiplying this average income of the grassrootsfunctions with the total population of income receivers, we get a (very) crude estimate (I) of (1-m)R = [(wN + rK)EST], the total remuneration of the people seen as a general grassroots payment, in contrast to the bureaucracy's top remuneration, i.e. payment above the average for the people. NB! This estimation method is compatible with as if the bureaucracy is an "arch or chairman-function" on the top of ordinary work, similar to "working chairmen". As this is seen all in all, in macro, several class-structures and distributions of bureaucracy-functions may be compatibele with this framework.

By adding a crude estimate of the income foregone by unemployment, say, = ap(N(full)-N), to the usual UN-type measure of NNP = R(UN) of today , we get an estimate of R included income foregone, i.e.(II) R = R(EST) = R(UN) + ap(N(full)-N), and thus the crude estimate of the system costs = bureaucracy costs = the total profit = the cost of the top of the pyramide above the grassroots payment = mR(EST) . From (I) and (II) we get [R(UN) + ap(N(full)-N)](1-m) = [(wN + rK)EST], <=> [R(UN) + ap(N(full)-N)] - [R(UN) + ap(N(full)-N)]m = [(wN + rK)EST] <=>

(III) m = ([R(UN) + ap(N(full)-N)] - [(wN + rK)EST])/ [R(UN) + ap(N(full)-N)] <=>

m = (R(EST) - [(wN + rK)EST])/R(EST).

Similar formula may be used for GDP (GNP), but then of course "ap", etc. are related to the gross values. This is only a first, very simple, approximation of sheding light on the people vs bureaucracy economics, estimating:

A. the people's "livingstandard", i.e. the (poorest) majority of the population, the grassroots-perspective, in contrast to the bureaucracy or the total population, measured as the average income aggregated from the poor to above the median income, i.e. the income of the middle person, where ca 50% are more poor and 50% more rich than him/her.

B. the system cost = bureaucracy costs = the total profit of the system; measured as the bureaucratical profitmargin, i.e. accounting for the "top", plutarchist remuneration above the grasroots payment, plus income forgone because of bureaucratical rule of the system, creating unemployment, see (III).

Since A and B are related to the majority of the population, we call this the democratic ecocirc or national, more correct - social - accounting, in contrast to the bureaucratical national accounting widely spread all over the world today (2002), that doesn't have this democratical perspective.

A more correct way of sheding light of the people vs bureaucracy economics, should take into account the class-structure more explicitely, x-inefficiency, environmental factors etc. and that production in public sector should be accounted via output, not input, with prices sat to marginal costs (in optimum). Sometimes the superior's functions in public sector are ca fixed costs, and the efficient marginal cost (= price) equal to the public grassroots workers remuneration. Then the contribution to GDP (GNP) and NDP (NNP) measured by output from the public sector, may be equal to the grassroots remuneration, and the profit in optimum (i.e. with maximal benefit minus cost plus efficiency and fairness) may be negative, not zero, as in todays usual UN-accounting, where net-production, px, wrongly is estimated with input (wN), "w" wrongly including profit, i.e. the top remuneration.

As mentioned - this should be read in the whole context at http://www.anarchy.no/aneco1.html

IJ@ editor: That's the very important news from IIFOR folks! We repeat the last week's notes on the development of the research. It is not every day we may follow a main breakthrough in scientifical research on the level of Einstein's e = mcc, and the Greek Eureka! That's what we call real news, in contrast to stuff about punks, jerks and kings & queens all over in media.


We are interested in real and other investments, optimal economical demand management, and other  projects in general, all over the world. Please send  information about your projects, and we may also give some advice in analysis of investments at your place. Follow the ECONOMICAL SCIENTIFICAL REVOLUTION DAY BY DAY. This is probably about the main scientifical revolution since Einstein. Please read the following:


26.02.2002: IIFOR - THE INTERNATIONAL INSTITUTE FOR ORGANIZATION RESEARCH has got a real  breakthrough in the  research on the general theory of libertarian economics, and is strongly requesting comments, see chapter II at (click on) 
http://www.anarchy.no/aneco1.html , and http://www.anarchy.no/iifor.html for general info about IIFOR. The words libertarian and anarchist mean the same in this context, and thus "anarchist" and "anarchism" don't mean chaotical situations.

Perhaps they are heading for the first "Nobel Prize in anarchism"? Although I'm not the best in libertarian political economy and organization research myself, it seems as if they are into something big!


IIFOR  says they see light in the tunnel, and it's sunbeams - not a train, but it is still far ahead. More comments and dialog is needed! But it still seems as if they have got a real  breakthrough in the  research on the general theory of anarchist economics!
28.02.2002: IIFOR  is all of the time fighting the updated scientifical revolution. They still want more feedback! Please RTW = Read, Think and Write!


For the rest of the analytical  framework  and practice, see:

1. The system theory of anarchist political economy and social organization research, - the economical political map at URL

2. The anarchist class analysis, i.e. economic-political sociology and industrial organization research, at URL

3. More praxeologics at :
http://www.anarchy.no/ija.html  and http://www.anarchy.no/a_nor.html   and in Norwegian http://www.anarchy.no/folkebladet.html

4. In general take a look at everything at the AIIS at URL 
http://www.anarchy.no and the official links, and use the search engine at the main page or link page. The quality of the infomation at links that are not directly written on the AIIS link-site, i.e. further added  links at the listed links, are in general not recognized  or guaranteed by AIIS. We can only guarantee quality information from the default search on www.anarchy.no. The www is free for all, which means anyone can post anything he or she wants to, and daily we encounter the word "anarchy" and related words and phrases applied in incorrect and deceitful ways.


H. Fagerhus
Editor of IJ@

P.S. We look forward to see your comments on the above mentioned items, and further dialog. Please forward relevant bits of this mail to your own mail-lists, and inform them all of the offer about free subscription to the International Journal of Organization Research /IJ@.  If you don't want to receive further information from us at the moment, reply to this mail with "unsubscribe" in the header.