1.2 The Four Basic Laws of Economics

Revised November 5, 2013

There are The Four Basic Laws of Economics.   When these laws are applied correctly in a society the society achieves explosive prosperity.   Conversely when these four laws are violated that society will spiral down into recessions, depressions and wars.

The following are The Four Basic laws of Economics.

 1.      All money value is created through and backed by the production of commodities, trades, goods and services.

 2.      The individuals who create the production own all the money that is exchanged for the products.  Another way to state this second law is, “reward the Producers of the commodities, trades, goods and services and only the Producers.”

 3.      All production must be marketed on an Open Market (open to all on equal terms, absolutely no exceptions.)

 4.      The money supply must be held constant with no exceptions.  A constant money supply standardizes the Economic System.

These four basic laws standardize the Economic System.  They standardize the Economic System like the Standard Meter standardizes the metric system.   

These are the four basic laws of economics.   When I studied the History of Economics I found when these basic laws were applied, in a Society, the Society achieved roaring prosperity and when they were misapplied the Society found itself in a recession, depression and wars. 

The first law cannot be violated because production always creates money value if production is taking place.   It is always operating, man cannot change this law.  Without production money will have no value. 

The second law can be violated and is violated to a very large degree when we find a society and nation going into recessions, depressions and war.  When a society and nation finds itself moving into recessions, depressions and war, the second law is being misapplied.  When the second law is maintained we find a society and nation achieving roaring prosperity.

The third law also can be violated.  It is violated by not having a Market open to all Producers on equal terms.  It is also violated by allowing non-producers and counter-producers to participate in the Market.  When this law is violated we find non-producers and counter-producers in the Market on unequal terms.  They are taking money out of the Market without the correct amount of self-produced goods and services placed on the Market for the money they receive.  They are in effect taking money away from the Producers who create goods and services and don’t receive the correct amount of money for their production.  The Producers don’t receive the correct amount of money because the non-producers and counter-producers are taking more money than their production is worth.  Violating the third law leads to the violation of the second law.  It leads to the Producers not being fully rewarded for the production of goods and services they create.

The forth law can be violated.  At present time on this planet it does get violated to an extreme.  When a money supply is expanded it is not held constant.  Expanding the money supply is very destructive to individuals, families, organizations, societies, nations, mankind and environments. 

When a money supply is expanded money value is stolen from the money in circulation.  The money in circulation loses value to the newly created money.  Money value is transferred to the newly created money from the current money.  This is another way the non-producers and counter-producers take money without an exchange of commodities, trades, goods and services for it on the Open Market.

In The Four Basic Laws of Economics we have four basic laws.  When these laws are applied we have great prosperity.  Three of these laws can be violated.  This first law cannot be violated.  The violation of the remaining three laws harms the Producers and rewards non-production and counter-production.  Maintaining the four laws rewards production and Producers.

Producer Rewarded Open Market Economics
The Science of Economics
By: R P Obrigewitsch
February 27, 20