2. Conceptualizing Money:



The Fountain of Money at the Heart of All Economics


This one is just a little conceptual aid, for those who might benefit from it. I think it can help to make sense of economic reality and aid in breaking down some unhelpful economic myths.


Now I'm sure you've heard people say "Money doesn't grow on trees!" Right? But how about if I said there really is a fountain of money, or you could even thnk of them as magic money trees, at the heart of all our economies? And they've really always been there.


If you've read the previous sections, you'll know that money simply comes into being when people (or governments) need it, when they 'deficit spend' or go into 'debt'. In other words, without much work or effort or fuss, money really does just come into being, when it is called upon, as if from a magical money fountain or tree. The only stipulation here (and what makes this system possible) is that money comes into existence, usually, on the condition that we return it. As you'll see, governments can be exceptions to that rule, but for everyone else, ordinary people like you and me, money comes into being when we need it, on the condition that we make a (legally binding) promise to pay it back.


In truth, this is just an inevitable practical reality for money, because money is never going to be some physical 'stuff'. It would simply be far too expensive - and pointless - to ship physical money about the planet each and every time a transaction is made, only to be shipped straight back again when the next transaction is made in the opposite direction. Money inevitably resolves to weightless, infinitely transferable numbers that can be sent and received all over the world with the minimum expense and fuss; numbers that are simply recorded up and down, and into and out of existence, as and when we need them, when we go into and out of debt.


Perhaps the most remarkable feature of this system is that it should clearly provide a strong social or democratic foundation for money, therefore also for the economy, for society and for the world as a whole. All people can have access to money, so long as they pay it back, without having to "borrow" anyone else's, or, therefore, pay interest. And few things could be more important, especially when considered against the reality of the world as it is; today entire countries are being crushed by debts and interest demands.


In a world where governments are required to hand over billions every year, simply for having a national currency, where working people must pay 3, 4, or 5 times for their homes, then what power is simply being handed up by society to the few who are rich? Phenomenal incomes are guaranteed to a small minoity of mankind, allowing them to increase their ownership and control over the productive (and administrative) elements of society, without ever having to work a single day.


The magic money fountain or money tree that exists at the heart of all our economies is obviously a democratic facility, it should be entirely subject to fair democratic rules. There are many trillions - hundreds of trillions - of currency units in existence in the world today and they should all have been created under honest and fair democratic terms.


Sadly that hasn't been the case and our financial systems have allowed a small number of people to provide for themselves at the expense of very many others who have gone without. I believe a new generation of basically educated citizens can change that. Whilst it seems fine for private banks to serve society and participate in the administration of money creation on behalf of the rest of us, I think it's very wrong that the fountain itself has fallen almost entirely into private hands at the expense of everyone else. In our world today, even our governments are required to "borrow" money into existence from capitalist banks. In the future, we must hope that banks will come to serve us as foundational components of a rights-based and largely interest free economy.




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