Labourism and the Economics of Limited Taxes

The author shows that the system of fundamental economic concepts has so far not been clearly explained. Understanding capital and labour as primary and complementary economic categories leads to the view that money is also an abstract category which arises in the process of labour as work receivables. This means that work does not need to be financed because it finances itself, that is to say, it creates money. Recognition of this state of affairs implies the need for a new institutional solution. The natural solution would be to empower the central bank to pay compensation for work in the public sector and to control the labour productivity ratio. This macroeconomic ratio limits wages in the economy. The bank’s present function of issuing money would be completely eliminated; it is a function which has no scientific justification. The author’s calculations show that in such a system the budget deficit would disappear and the introduction of reforms to streamline and lower taxes would be possible.