Trade: A makes X and B makes Y, A specializes in making X and B specializes in making Y, A makes more of X then she needs, B makes more of Y then he needs. C does nothing, D attempts to steal from A and B through deception "I am so weak !!!" and E attempts to steal from A and be through violence "your X and Y, or your lives." E has its own ideas about trade.
Trade works for A and B, they can ignore C if they wish. If all goods produces where thrown into a basket for general use, C could take all he wanted. Trade protects A and B. D can also be ignored if A and B so wish. A and B can decide to give money to police-force F and fund judges G, thus losing some wealth but buying safety from the robber E.
These sweet goings on suffer 3 additional complications in modern times. First not everything that has economic value is produced by anyone, the best example is soil. It exists before and after and during the economic process. If E where to control it through force, he could extract wealth from A and B to use it. A and B get nothing out of E, because E didn't put the land there; without E they would have the land for free (or reduced cost). The solution for such entities of economic value that exist regardless or exist continuously, is to distribute them to all, everyone a fair share. This way everyone gets the same benefit out of it. Those that don't work the resource are allowed to hire it to someone who does.
Another complication is the strange habit of most people to be willing guinea pigs in the designs of people who they award dictatorial power with their obedience. Almost all businesses today are dictatorships, people don't even think of them as dictatorships even though they usually are. It is so common, it raises no eyebrows with most people. But the boss controls how the spoils of the business are divided between all that contribute to the effort. The boss also has the power to hire and fire people, while the boss/owner can not be fired. The difference in power allows the boss to do things his/her way, which typically means: the boss takes as much of the money as he/she thinks he/she can get away with.
The careful observer will have noticed the similarity with the soil ownership problem: the boss wields a special super-power in these trading situations. That super power gets converted into money for the boss, and poverty for the rest. It does not have to but it typically does. On the other hand the economy needs fresh upstart businesses in order to make very profitable items/goods cheaper, and put competition to other companies, which is the way the markets stabilize the effort everyone puts into their work. Something which is very profitable will be attempted by more and more people, until the price drops to a reasonable level where people might as well do something else again. To have that stabilizing effect, markets need to be dynamic places where companies are starter, grow, contract, and go bankrupt.
The dictatorial problem can be solved this way, without hurting the dynamic operations of the markets: once the business starter - who is a "natural boss" who has earned his/her right to be any kind of boss he/she wishes to be because he/she has managed to do something worthwhile, which is build a company from nothing - once the starter leaves the business is going over into the ownership of the group of employees, if that group is large enough.
That leaves another issue: money, business investment credit in particular. Money is extremely useful for the markets, a market without money hardly works at all - direct barter is not an efficient system (think it over). The problem with profit seeking investment, is that wages, "fair share of profit," legal costs, health care costs, community costs, tax costs, environmental costs, all these have to come out of the profits of the company. The for profit investor who invests in companies who minimize all or as much as possible of these costs, will grow out to be the most profiteering investor. Being the most profiteering investor, he/she will become the richest and most powerful investor. What kind of businesses does this ever more powerful investor grow up left and right and throughout the economy, until there is only that kind of businesses ? Bad types of business, who minimize the costs of everything that is worthwhile and good.
Therefore there can only (or almost only) be democratically controlled business credit. If you are a farmer, and you know your crops get no water from a watering system, but your weeds are, then you will have to adjust the water flow so that the crops get the water and the weeds stand dry and die. The for profit investment system waters the weeds (bad companies, but more profitable for the investors), and does not water the crops (better companies, more profitable for employees and for other worthwhile causes). The profit motive on business investment must be removed. The obvious alternative: democratic power. Note that when businesses are forced to become democracies, this also undercuts the power of for profit investment to a degree (but not enough). Note also that conscious consuming can form a contra power against these problems, where both greedy and poverty consumption tends to re-enforce the problems.
This leads to the last major issue: the state must be a true democracy. Without being a true democracy, there is no place to invest the money power, and with no place to invest the money power the capitalist markets will run wild and will tend to create corruption, dictatorship, war, imperialism, and so on and so forth - who knows where that will end, but it probably won't be nice. Note that if the money power is under control in the state, then the state is no longer under threat from the corrupting influence of the external privatized money power. Note that businesses under dictatorial control tend to have a never ending lust to grow bigger and bigger, because even if the profit per employee might drop, if all profit (first) flows into the pockets of the business dictator even then the total profit has increased. This can (and has) lead to companies growing to become monstrously large, even grow out of their host countries.
All these weird problems occur because people don't understand their basic economic theory, despite it all being rather simple & obvious, especially once you understand it. If you don't understand it then maybe you should study it more, you can't expect to understand everything on the first reading. Young people spend years and years to learn how to read and write, later they might spend several years to learn economics or law if they choose those directions. This is economics and law, and it isn't a minor update but rather a new dimension if you like. Turning economics from covering the capitalist parasitic racket into an objective science in the service of the people. This more or less means most of currently taught economics (2009) will have to be thrown with the trash. If you are not willing to do the work needed to learn economics, then don't blame me for your lack of understanding of the subject. Maybe you can find someone who can explain these things better for you. If you think this is just another theory, then you don't seem to get it. On the other hand if human behavior was vastly better, then perhaps even the present day (2009) capitalist utopia would have worked. The problem with capitalism is that it demands such a high moral standard of all people, that they would willingly share land for nothing with each other, demand most/all businesses to be run democratically and equitable, and invest their excess money in good causes and as gifts to apparently useful upstarts 100%. The people would need to be so morally enlightened that without laws to enforce a correct model, they'd be doing it out of their own hearts. My idea is: we have to put some teeth on it, or it won't work, and if it doesn't work only the few parasites prosper and the many suffer. Law isn't merely about what you can't do: it gives society a functional structure, without which chaos or bad structures could take over that make many people suffer.
Viewpoint: science in the interest of the common welfare
Aim: reducing economic suffering and increasing the stability of society, without making it worse in the process (the problem is reduced to one of bad laws / good laws, primarily or even exclusively - at the most some unsuited characters are to be released from their positions of power, after which they can go their merry way or even get a free education in a useful trade in order to have a fair chance in the productive economy).
Sources: none in particular; history is the greatest source of information. I don't read many or any books about economics and/or law, but try to understand history. There are some sources of particular interest: the Torah (which contains a coherent economic model, usually completely ignored), and the Law of Peace of the Haudenosaunee Red Indians (six nation confederacy), which is a law that has very interesting things to say about democracy and internal council operations. As far as history is concerned, the history of the socialist / communist struggles and revolutionary experiments are extremely interesting. From revolutionary committee formation by the people, to the failure of the plan-economy; from the experiences with land ownership, cooperatives, to the failure of western party democracy; and of course the brutality of those in power against the people under whatever proclaimed system they where supposedly operating. Needless to say, the French Revolution has been such a mile stone in recent history, that without saying a word, every word has to pay it credit and thanks, even to do nothing more but exist and be published while remaining thoroughly unread by the masses and scholars alike. Some of the best people in history have been, in my opinion: Moshe Rabbeinu (Israel), Confucius (China), and the Great Peacemaker of the Red Indians Dekanawidah. I note that if you combine the works of Moshe Rabbeinu (or related by Moshe, if you prefer) and Dekanawidah (or related by Dekanawidah, if you prefer), that you combine a correct economic system with a correct state system, and thus you "are in business" in terms of a stable system for society (anti-capitalist free trade with land distribution and democratic people-friendly Government). My system only derives some details from either Moshe Rabbeinu, and Dekanawidah the Great Peacemaker, while sharing the fundamental model (anti-capitalist free trade with land distribution (Torah) and democratic people-friendly Government (Great Law of Peace)) for scientific economic reasons in the interest of social and economic justice (fair pay and power distribution). If you do not want to know how economics really works, maybe because you want to find out for yourselves, quit reading this website before you find out (if you haven't already !). The system presented here is not based on the works of Moshe Rabbeinu, or on the Great law of Peace (the similarity is co-incidental, or if you prefer "a correct idea can be discovered, and then be re-discovered in a different context again and again and again and again ... "). It is based on the science presented combined with some creativity, nothing that anyone willing couldn't do for themselves just as good or better. Please improve where needed !
Audience: ordinary people, real people, all people; it is also meant for whomever may be in a position of power in any nation. The goal is to change the economic system and where needed the state Governance system. The needs to reach that goal dictates for whom it is meant. That may either be only the people in power if they are willing, or all people in case it is necessary to push for beneficial changes by the public.
Greatest doubt: my greatest doubt is whether the people are able to elect one representative per 50 people (free elections, not obligatory to participate), and whether the representatives manage to set up a functioning Government in the cities (which should not be a problem, but it could be; the 50 sectors idea on 1st level delegates is probably the safest, and then have a combination local councils and city-wide council; upward is then the 50th province council and the national council).