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Social system - a term that refers to human society, formed in a structure. An example of a social system is a village, city or state, in rare cases, a few states. Speaking of human society as a system, we must give a description of the structure that makes up this system. Property and types of relations to it are the key elements to understand social system elements and how it is governed.There are three property types which provide an individual with all necessary for life: labor, authority and capital. In society there are always present all three of these, differently distributed among people. One dominating property is the basis for a specific group of people - an element of the social system. Uneven distribution creates the need for exchange. The capital is exchanged for labor. Executive powers to capital and labor. The owner of the company hires an worker and exchanges his labor to the part of the profits derived from investment in the business. At the same time the company owner buys resources from the government. The government, in turn, collects taxes and spends them on social needs. Once humans came out of the primitive state (if, in general this primitive state ever existed in pure form), they immediately self organized into the social system. Humans can survive only in the community. Ownership divides society into groups. The need to exchange contributes to the development of the social system and develops its ability to survive as an entity.
If we recall Daniel Defoe's Robinson Crusoe book, we will notice that as soon as Robinson found Friday, they immediately formed a social system. Robinson had power and property (weapons, and, in fact the capital), while Friday possessed only labor.
The primary source of human existence is labor, it is the property of the first major social system group -Labor. Labor creates private property and generates the second group of the social system - the assets owners- Capital. Each community of people is producing food, clothing, shelter, etc. And as soon as there is production, there also appear the owners of this production. In addition there is public ownership of land, and everything on it and in it. This sort of property need governance as well. People who control public property, call it public resources, form the third group of the social system - Government. The power is based on the available resources. The social system can not operate without its elements. The government decides the issues of social life in the community, protects citizens and manages shared resources. The owners of production (Capital) manage investments and organize its production facilities. The owners of labor are directly employed in production. Without labor there is no production. Without Capital the production is inefficient. Lack of government makes the social system unmanageable.
Groups in a social system constantly interact with each other, exchanging property. And this exchange is caused by desire for material well-being and the only way to increase it is productivity growth. Productivity growth contributes to profits of owners of assets, growth in labor costs and more efficient use of resources. The ability of the social system in self-preservation is totally dependent on the exchange between the groups. The division of labor facilitates productivity growth. The same division of labor allows deeper separation between groups strengthening exchange between the social groups. The ownership types are divided between the groups, so that every group has one predominant property type. The owners of labor have only labor and do not control investments. The government is not engaged in investment. Higher productivity and growth of investment in production equipment and training of employees. The whole social system tends to increase its resistance much of which depends on the productivity level. The productivity level reflects social system development level and how it differs from other social systems.
The most striking example of different social systems is the existence two types of states, east and west. In the eastern state the power and capital are combined in one social group. This makes the resources trade more profitable than investments in manufacturing and productivity. In other words low productivity is compensated through the natural resources trade increase. In the western state, which is on a higher stage of development, all three social system groups are quite apart promoting higher productivity level.
If you do not pay attention to orthodox economics, but come from the proposed social system theory, the main economic targets should reflect all three social groups. The formula to determine the gross national product (GNP) will be as follows: GDP = consumption + investment + costs of public spending. All three groups consume the entire national product. Asset owners provide investment in the economy. The population provide consumer spending. Government expenditures consist of three parts, one part goes to the government maintenance, the second on public investment in resources, and the third is spent on forever state needs, such as defense, police, etc. National product output will be higher if the exchange between the groups will be most intense.
Now a few words about how to manage the social system. In the management of the social system one must maintain an effective exchange between social groups. The satisfaction level of all social groups reflects exchange efficiency. The exchange between asset owners and the government (investment in resources) between the government and the public (tax on security), between asset owners and the public (standard of living.)
The government affects the entire social system and its individual elements, changing the exchange of property between groups. If the exchange is satisfactory, then the owners of the assets are expected return on investments, the population met the standard of living and the government remains in power. We can say that when the exchange between the groups is in balance then the social system is in a stable equilibrium. If the government unable to provide policy meeting different social groups expectations then there are conflicts within the social system and the social system is out of balance. The criterion for a balanced social system is the increase in productivity.
In most cases, management of the state is reduced to avoid economic crisis. The reason for the economic crisis lies in the imbalance between the groups. If the government is unable to provide asset owners with the necessary resources, then their investment activity is reduced, increasing the unemployment rate. Resource requirements depend on the investment cycle, where orthodox economics ignores alternation of investment in productivity with the investments in production capacity. During the period of economic growth, which is characterized by employment, gross national product and the government expenditure growth, the exchange balance shifts towards the state, especially in terms of sunk costs. The social system loses a major resource - aggregate demand. Asset owners are losing the return on investment, and seek to invest in productivity growth, which in turn reduces employment and aggregate demand further. The further growth of production (investment in production) becomes impossible and the system is in crisis. But the government, as the most inert system element is not able to respond to such changes. John Maynard Keynes proposed his theory of partial state intervention in the economy, which helps prevent depression, but ignoring the state as the largest economic entity, does not resolve the crises.
The site describes the social systems and states relationship, based on available resources. Trade, political relations and wars between the states can be explained solely by government recourses, available or desirable. And, therefore, the war is an exclusive product of government disputes over resources.
