Our current economic model, built on top of our current, unstable, monetary system (https://www.imf.org/en/Publications/WP/Issues/2018/09/14/Systemic-Banking-Crises-Revisited-46232), is systemically unfair and pushes towards extreme inequality (https://www.scientificamerican.com/article/is-inequality-inevitable/). The consequences of that inequality are devastating for too many people. Luck plays a far bigger role in success than people are willing to admit. Therefore a structural method of wealth redistribution should be put in place. That can be done at the level of the monetary system:

Preprint An alternative general-purpose money supply model for a futu...

Poster Decoupling Economic Health from Growth: A Novel Money Supply...

With a structural solution at that level, we can start having an all together different conversation about what kind of society we want to build together. We wouldn't even need a socialist welfare state anymore. Not in the sense that we know today anyway.

Socio-economic systems defined as capitalism and the socialist welfare state in pure model form exist only in textbooks, in theory. In practice, countries have variants of several globally dominant models of socio-economic systems. An analysis of the history of the world's socio-economic development shows that attempts to build a socialist welfare state with a view to ensuring equitable distribution of wealth and employment opportunities for all able-bodied citizens and thus create prosperity have been made many times. Unfortunately, such economic experiments have always failed, because the socioeconomic systems created in this way were much less economically efficient relative to systems based primarily on market structures, the market economy model, private ownership of productive factors, etc. The model of a socialist or communist economy, in which there is equality in income distribution, state ownership of productive factors, central planning of key economic investments and business ventures carried out by state-owned companies and enterprises, full employment of citizens, etc., is a beautiful but not realistic ideal. On the other hand, also the ideal model of a market economy in its pure form, in which the state, according to Adam Smith, a leading precursor of the classical economics trend, plays the role of night watchman in the economy also unfortunately does not exist anywhere in reality. In fact, there are various variants of mixed economies, which in the situation of highly developed countries are sometimes referred to as social market economies, i.e. economies in which market structures dominate, private ownership of most of the factors of production, i.e. forms, enterprises and other types of economic entities, most of the goods produced are created in commercially functioning economic entities operating in various markets differentiated by, among other things, the level of competition and generating the bulk of the Gross Domestic Product, etc. On the other hand, economies operating under the model of social market economies also have public sectors whose activities are financed by the state's public finance system. The public sector provides public goods for citizens, provides financial security at a certain level within the framework of social policy and within the framework of the participatory pension system. Within the sphere of public goods, the state also provides citizens with a certain minimum of educational security, health services, internal law enforcement, disaster services, the military, etc. In mixed economies, some companies and enterprises and financial institutions operating in strategic sectors of the economy may have the state as a majority shareholder. Besides, in realistically functioning mixed economies, the governments of the countries conduct economic policies and, on a larger or smaller scale, apply anti-crisis and/or pro-development state interventionism in an attempt to influence the economic processes taking place in a certain way, for certain purposes, and thus try to influence the pace and specifics of the country's economic development. The basic instruments of influence on economic processes that are applied by the government operate within the framework of social policy, fiscal policy, budget policy, sectoral policy, such as housing policy, agricultural policy, energy policy, environmental policy, innovation policy, etc., and monetary policy. However, the applied instruments of state interventionism do not always work as planned in advance. When a deep economic crisis develops, unemployment rises strongly, consumption, investment, production levels fall, economic growth slows down, tax revenues to the state budget fall, then the debt level of the state's public finance system usually rises. In many countries after the global financial crisis of 2008 and the pandemic economic crisis of 2020, the level of budget deficit and public debt in many countries has increased significantly. As a result, the government in order to balance the situation in the public finance system of countries is forced to reduce spending and/or raise taxes. During the pandemic economic crisis of 2020 in some highly developed countries, a large amount of a kind of anti-crisis printed money was intervened into the economy without being covered by emerging products. At the expense of limiting the scale of the rise in unemployment in this way, high inflation was generated, which began to rise as early as 2021. Subsequently, central banks also intervened anti-inflationarily by raising interest rates, which increased the cost of money borrowed from commercial banks in the form of bank loans and financial paracredit instruments used by companies to make investments in their business activities. More expensive and harder-to-access credit caused a decline in investment levels, a drop in the rate of economic growth and another wave of downturn in the context of multi-year business cycles. In view of the above, it has often been the case that the specific tools of socio-economic, fiscal, sectoral, etc., and monetary policies applied under state interventionism can produce undesirable secondary effects, which, if they get out of control in their development, lead to the occurrence of another economic crisis. Thus, it is not only the specific model of the socio-economic system that provides citizens with economic well-being, good living situation, financial, property, housing, etc. An important role in this matter is played by the quality of the socio-economic policy pursued, which is more or less tailored to a certain economic situation, developed to a certain extent particular sectors and industries z in the economy, is tailored to a certain sector-industry structure found in a certain national economy, a certain model of a commercially functioning financial system, a certain share of commercially operating sectors and public sectors, and so on. Countries where economic experiments of trying to create a welfare economy under the model of a centrally planned socialist or communist economy are still in operation are relatively few in number, as they are much less economically efficient compared to social market economies. On the other hand, there is no realistically existing ideal model of a social market economy, which should always ensure the welfare of citizens. In recent years, the importance of sustainability, the realization of sustainable development goals, conducting business in accordance with business ethics and corporate social responsibility, realizing the green transformation of the economy, increasing the importance of pro-climate, pro-environmental and pro-environmental policies has been growing. Accordingly, currently developing economies operating mainly under the model of social market economies are becoming more and more sustainable social market economies, in which the importance of sustainability, zero-emission, greenness, climate protection, environmental protection and biodiversity of natural ecosystems is growing, because the livelihood of citizens also depends on this, and in the future, due to the continuing process of global warming, the livelihood of people in general will perhaps depend on this. I am researching this issue. I have posted the results of my research in some articles and monograph chapters, which are available on my profile of this Research Gate portal.

Best regards,

Dariusz Prokopowicz

The above text is entirely my own work written by me on the basis of my research.

In writing this text I did not use other sources or automatic text generation systems.

Copyright by Dariusz Prokopowicz