What is economics?

Economics.

The economy, like the oxygen we breathe, surrounds us from all sides.

The economy is the food you eat and the money your parents bring home. Economics is the school where you study and the polyclinic where you are treated. The economy is the house where you live and the trash you throw away. The economy is government and ATMs, shops and factories, goods and workers. The economy is even the air you breathe - clean in the countryside, but dusty and dirty in the city.

Everything that surrounds us can be considered by scientists-economists from the point of view of influence on our life, our future, our wealth, our troubles and our joys.

If in geometry all calculations and measurements are based on measures of length - meters, millimeters and centimeters, then in economics money is the measure of measurement.

By and large, economics is the science of wealth and poverty. The book of the man, whom scientists consider the very first economist, was called "A Study on the Nature and Causes of the Wealth of Nations".

Just as in meters you can measure the path to school or the circumference of the waist, the side of a triangle or the height of the house, in the same way money can measure quite a lot in our life. But the most important thing is not only to measure, but also to understand how and what needs to be changed in order for people to live better.

Take trash, for example. This is definitely not a product. Garbage is what we don't need, what we threw out and don't want to see anymore. But it turns out that this thrown out garbage also costs money and, depending on how you deal with it, it can make us poor, sick and unhappy, or vice versa - rich, cheerful and healthy. And every solution to the garbage problem has its own price. And this price is measured in money.

But let's start getting to know the economy not from the trash can, but from the moment when your parents return home with the salary they received for some work that they have been doing somewhere in the last 30 days.

Parents take money out of their wallet and count it. And they say, for example: "This month we earned one hundred coins."

And your parents are wrong.

In fact, they earned much more. It's just that at the cash desk at their work they were given far from all the money they earned.

First, taxes were deducted from your parents' earnings at their jobs. And this is a rather large amount. About half of what the parents brought home.

Who took this half, by what right and why?

The state took this money from your parents. And so that parents would not be outraged by this, the state invented taxes.

The state says something like this: "In order to protect the inhabitants of the country, in order to build roads, govern the country, teach children, heal people, catch criminals and pay pensions to elderly people, all residents of the country must pay taxes to the government every month." And decides how much money it will take from each family. The state does not ask your parents for consent or permission to take this money. Furthermore. Many parents do not even suspect how much money the state takes from them from what they earn. Because the state does it cunningly. It does not take money directly from your parents, getting into their wallet, but from your parents 'boss, demanding that this boss give a part of the parents' earnings to the state before giving money to your parents.

What happens next?

And then parents need to go to the store and buy food to feed you, clothes to dress you, notebooks for school, cat food, movie tickets. And every time they open a wallet at the store checkout and pay for a purchase, they again pay tax to the state.

"Excuse me," - you say - "But our parents have already paid taxes when they received their salary!" And you will be right. Already paid once. And now they pay a second time. There is a special tax in the price of each product, it is indicated by three letters - VAT. And every time we buy something, we again give the money to the state.

As a rule, VAT is hidden in the price of each product in the amount of about one fifth - 20%. That is, if you buy a movie ticket for 10 coins, then 2 of your coins are immediately taken by the state under the guise of VAT tax.

But the state does it again not with its own hands, but with the hands of the head of the cinema cashier. A special small army of government officials called tax inspectors forces the director to give a fifth of all the money he receives to the state every month.

And if you thought that this was the end of tax collection, then you are mistaken.

If your parents buy something large and valuable - a dacha, an apartment, a car - and then, in a few years, decide to sell this property, then again, for the third time, they will have to pay tax.

The most amazing thing about all this is that your parents hardly wondered if this was true. Isn't it strange that in order to buy a loaf of bread, a kilogram of potatoes, a bicycle or an apartment, they have to give their money to the state twice or even three times.

Let's try to look at any purchase through the eyes of an economist through special money glasses.

For example, let's take a regular loaf of bread that your parents just brought from the store. What does this loaf represent in terms of economics, in terms of money?

And if you just ran to look at the cashier's check, then you did it in vain. Everything starts much earlier. Moreover, nothing ends with a cashier's check. And you will have to be patient to find out what a loaf of bread is in terms of economics.

And it all starts somewhere outside the city in early spring.

The farmer must first buy or rent a piece of land. Pay for it. And for the product itself, and the tax.

The farmer then has to buy a tractor, plow, seeder, and many other implements to get the field ready for sowing. Of course, the farmer again has to give money for the product, and the price of this product will again include taxes.

Then the farmer will buy diesel fuel. After all, a tractor will not go without fuel. And at the same time he will buy seeds from which he will try to grow wheat. And also fertilizers and watering machines, so that the wheat still grows. And also a harvester to collect wheat, a truck to take the grain to an elevator or mill. And the farmer will pay for all this again. Both the cost of the product and the taxes that are hidden in the price of each product.

In order to buy all this, the farmer will borrow money. But just like that, no one will give him money. Everyone will want the farmer to return them a little more than he took - returned with interest.

This is called a loan and usually farmers go to the bank for a loan.

Then the farmer will work, hoping that he can get a good harvest and sell it. The farmer will most likely need helpers. And they will need to pay a salary. But before giving them their wages, the farmer will pay taxes again.

Several months will pass. All this time, the farmer's family will live in the hope of a harvest and good prices, spend the rest of their savings and save on everything, including food. After all, no one has given them money yet. The crop has not yet grown and sold.

But then autumn comes, the farmer gets the harvest, goes to the elevator and sells the grain. After that, he gives a loan, gives interest on the loan, pays taxes from the amount of money that he received at the elevator. And only after that, like your parents, he returns home, opens his wallet and counts how much money he has left and whether his family will have enough to live until next fall: buy food and clothes, school notebooks, cinema tickets, fuel for tractor, seed for sowing, etc.

But the economy of the loaf, as you know, does not end there. There is no loaf yet. There is only grain in the elevator.

But the elevator should have been built by someone. After all, people did not inherit it from dinosaurs or giant ants. First, the businessman bought or rented a piece of land. Then he hired builders and bought building materials. Then he built, paid workers wages, bought equipment. And every time in every payment of a businessman, taxes were hidden, which the state took for itself.

And this was not only the case with the businessman who decided to build an elevator. So it was with businessmen who sold grain, a combine, a tractor, a plow to the farmer. This was the case with businessmen who built oil wells and extracted oil, from which other businessmen made diesel fuel. This was the case with businessmen who sold building materials to the owner of the elevator. And the businessmen who created equipment for the elevator for storing grain and turning it into flour. This will continue to be so. And every time a businessman or a farmer paid for a purchase, the state went into their wallet and took a part of their money.

Finally, the businessman built an elevator and even ground grain into flour. And he was lucky to sell it to the bakery. To do this, he had to buy a car. And the loaf on your table is still very far away.

The bakery also had to be built first. This means buying land, building materials, hiring builders, purchasing ovens and other equipment, hiring workers and paying them wages. And constantly give the state taxes, taxes and more taxes.

But by the time a truck brought flour to the baker from the elevator, the bakery was ready. And the baker baked bread.

And it seems that the bread is about to end up in your breadbox, but alas. Bread should not only be delivered to the store. First you need to pack it in a bag.

And bread bags start with geologists.

To this end, the state built a school using taxes taken from people and businessmen, hired teachers and paid their salaries. Children came to school and began to study.

But you can't learn to be a geologist at school. And the state spent part of the taxes taken from residents on the construction of the university. Hired professors, paid their salaries and invited students to study. Some students studied for free, while others paid for their tuition.

Finally, some of the students learned to be geologists, and some businessman hired them to find oil deposits underground. To do this, the businessman had to buy scientific instruments for geologists, hire a helicopter and pay the geologists a salary.

When geologists found an oil field, a businessman bought or leased this part of the land and came to the state to buy a license for oil production. Then the businessman hired workers, bought equipment for an oil rig and paid for the transportation of the extracted oil to the plant.

Another businessman bought land, hired builders, bought materials and built an oil refinery, spending a lot of money on it and paying a lot of taxes during the construction and operation of the plant. The result was a plastic bag that was brought to the bakery.

As you already understood, in our story there will be no unforeseen situations that often occur in real life. Trucks and harvesters do not break down and do not require repair. The crop grows and is not destroyed by hail, locust or drought. Factories operate without accidents and fires, and oil is found in the first well, and not in the tenth or thirtieth, as it may well happen in real life, and not on a book page.

This means that the businessman who decided to create a store has already bought land, hired builders and has already built a building. In addition, he has already bought and placed counters and cash desks, hired sellers, loaders and cashiers. And he even already paid taxes on all his expenses, which the state demanded.

Meanwhile, the baker packed the bread in a bag and took it to the store, where your parents could just buy it.

But if you think that this is the end of the loaf economy, then you are wrong again.

After all, the loaf has not disappeared from your table. It only transformed itself into trash and waste.

This means that the economy of the loaf continues.

And it continues with the fact that your parents need to pay for utilities and garbage collection. After all, if businessmen did not take out garbage, and engineers, having studied at universities, did not build houses with sewerage systems, and in addition to them, sewage treatment plants, then it would be rather difficult for us to live, making our way home from school past the garbage mountains from which everything would smell what we leave in the toilet.

And if you think about how often you go to the toilet and how often you throw out the garbage, and your neighbors do the same with you, then you should have a question - where are these mountains of garbage? They didn't disappear from the wave of the magic wand. And if they are not near your home, it means that they are somewhere else.

And this, of course, is the case. Scientists have yet to come up with a good way to deal with garbage. Perhaps you will come up with it. And in order to come up with something good, you don't have to wait for graduation from school and university. The sooner you start to invent, the more chances that after making many mistakes and experiencing a huge number of failures, you will come up with a good effective solution. After all, although it took Edison 10 thousand experiments to invent the light bulb, in the end he succeeded. So you will succeed.

In the meantime, mankind does this with garbage. Somewhere it is taken to huge dumps that rot and stink all over the area. Somewhere they are taken to special incinerators, which burn the garbage and emit a rather smelly smoke. Somewhere, some of the garbage is recycled, turning into plastic furniture, cardboard boxes and even garden benches. But so far nowhere have they learned how to efficiently and safely recycle all waste for humans and nature. And your help and your unusual ideas would be very useful to scientists.

But back to the word that was encountered much more often in this text than a loaf, grain, or a businessman. And that word is taxes.

What are taxes?

Taxes are money that residents and businesses give to the state in exchange for all kinds of services.

We saw how often the state gets into our wallet and takes out its share - taxes. And we know that this share is very big.

What services does the state provide to residents for this money? And this is all that the state calls "free".

“Excuse me!” - even a student of the first grade will say, - “How can it be free if the state took money for it?” And the first grader will be absolutely right. There is not a single free public service. All of them are paid by residents or businesses taxes. With your parents 'money and your neighbors' money.

For what public services do we pay with our taxes? The most familiar service is schooling. Another is medical care in clinics and hospitals. The third is the pension that your grandparents receive. The fourth is the protection that the army and police provide to the residents. The fifth is the money that the state spends on its various officials who write laws and monitor their implementation, on controllers who monitor businessmen and residents, on tax inspectors who collect taxes from residents and enterprises, on officials who distribute money and resources, for the officials who control this distribution, as well as for their cars, offices, buildings, meetings and other aspects of official life. And according to American economists, government officials spend about half of all the money that the government takes from residents and businessmen. And sometimes more.

And here it is just right to think about whether the services of the state are too expensive for people? And how high-quality service is provided to residents by the state for the money of these residents?