If you have ever wondered why Mercedes cars break down today just as much as Zhigulis, or why (continuing the automobile analogy) car service stations don’t repair but break cars, and why there are more lawyers working there than mechanics, here is your answer.

In fact, it is profitable to make things that are good and of quality. However, this holds true in a world where prices are determined by supply and demand—that is, by value.

Now let us note the following. Prices will change exactly in this manner if the number of monetary units in the system is constant or changes extremely slowly. Now let us look at our state and its banking system. It is no secret that the state produces monetary units on an industrial scale. Again, despite the nickname of the current Fed chairman, the state has never actually been observed spraying new money from helicopters. The pointlessness of this activity is obvious. New money that the state injects into the market always enters at some specific point. And there are people and organizations that receive it first.

The happy owner of new monetary units will spend them on what they could not previously afford, or simply buy more of what they always bought. Sellers and producers, seeing this, are delighted—their goods are being bought! They start producing more of it if they can, or raise prices if they cannot. They act as the law of nature commands, the law of exchanging one value for another. But in our case, there was no increase in value, only an increase in the number of monetary units. Value was exchanged for air. Yes, the seller receives profit, goes and exchanges this money for something else, and so on, all the way to the end of the chain. The last one in this chain receives them only after prices have already changed—mostly risen. They do not win, but lose. That is, in reality, some time after the new money entered the market, value simply moves from those at the end of the chain to those who were at the beginning.

Inflation is not “rising prices,” as television teaches us. Yes, in general and on the whole, with an unchanged level of production, inflation manifests itself in rising “average” prices. But no one in real life ever deals with “average” prices, just as no one needs the average temperature in a hospital. In a living economy, for a real entrepreneur, relative prices are what matter. And they do change. Some prices fall. Others rise. These are all signals. They say: “people value this benefit higher than that one!” Inflation, however, is like a tornado wandering through prices, distorting exchange and disorienting all market participants. As a result, on the market there is only one clear signal left—make things out of plastic, make them with the help of a “Handy Hands” club, and most importantly—make them as quickly as possible. Under normal conditions, a service station that breaks cars is doomed. The Mercedes that is like a Zhiguli is doomed. But in conditions of inflation, people have money to buy bad things. And therefore, it is worth making bad things. Usually, the market forces the bad to strive for the good; inflation forces the opposite. After all, profit is always measured in monetary units. But in conditions of inflation, profit may not be connected to value. These may be chimeras born from the wandering of homeless monetary units. And, naturally, sooner or later these mirages dissipate with subsequent personnel changes.

In general, to conclude on our topic: when considering employment, it is worth remembering that going to work and creating value are two very different things. In reality, sooner or later, it always turns out that payment is only for the latter.

One Last Time About the Parliamentary and Presidential Models, and a Simple Method for Evaluating Constitutional Projects

This text briefly formulates the main differences between the parliamentary and presidential models. Of interest to those who wish to understand this question.

All of this appeared in Europe during the development of political thought. Let us note a very important point—this thought developed in parallel with the development of political institutions. Most important among these, in our case, is the representative institution, which has existed for a very long time.

So—one of the results of the discussion of the idea of “government by popular assembly,” which arose in the Middle Ages, was the idea of an elected, that is, accountable government. This idea is the cornerstone of democracy; it is by this, above all, that this form of governance differs from all others. Let us note that, apparently, the implementation of this principle is one of the foundations of the success of democratic countries. I emphasize—we are talking about an elected government, not about deputies or anyone else.

By that time, representative bodies already existed in Europe, and in some countries they were elected. Therefore, the idea of an elected government turned out to be closely linked with already existing institutions. In other words, it was implemented in the mechanisms of government elections through the representative institution—the parliament—and parliamentary accountability. Thus, the parliamentary model arose. As it improved, it eventually crystallized into the following system: the government is formed by a parliamentary majority. The majority itself is formed by factions of parties that won the elections. The majority leader becomes the prime minister—the head of the Cabinet. Loss of the government’s support by the majority means its resignation and, as a rule, new elections.

The idea of the electability of government is implemented in this model through parliamentary elections. In elections, de facto, programs of possible Cabinets represented by different parties compete. People vote for them expecting that this program will gain a majority and can be implemented (there are many behavioral options; people vote expecting the party to enter a coalition majority, become the opposition, etc.).

Let us separately note the role of the majority that forms the Cabinet, which is also often misunderstood. For simplicity, let us take the case of a single-party majority and, accordingly, a single-party government. So—the presence of a majority in parliament means that the Cabinet automatically receives support for its legislative initiatives. But! This will be true as long as the interests of the party (that is, strategic interests, since the party is always interested in winning elections) do not conflict with the interests of the Cabinet (generally, immediate, tactical interests). In case of a conflict of interests, the party may not support its own Cabinet during voting on the projects it proposes. This means that the Cabinet no longer has the support of the parliamentary majority (note, formed by its own party!) and automatically leads to its resignation. Thus, the principle of the majority in a correctly constructed constitutional model plays an important restraining and controlling role; it restrains, above all, government populism (let us mentally compare with how this is implemented in our country and where such implementation leads).

In the parliamentary model, there is a position of head of state, occupied by a president (as a rule, elected by parliament) or a monarch.

There are many variants of the parliamentary model. Unfortunately, our discussions often get stuck on nuances existing in certain countries, and behind them we do not see the whole—the idea outlined above.