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 think 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. Today, entire countries are being crushed by ever growing debts and interest demands.


In a world where governments are required to hand over billions every year, often in the form of valuable national assets, simply for having a national currency, where ordinary working people must pay multiple times for their homes or go without, advantaged elites can ever increase their ownership, control and profit from the productive and administrative elements of society. And unlike the all the rest of us, they don't ever have to earn a penny.


The magic money fountain or money tree that exists at the heart of all our economies should clearly be a democratic facility and should be subject to fair democratic rights and rules. There are many hundreds of trillions of currency units in existence in the world today and they should all have been created according to fair democratic rules.


But the task remains to make that so. The unjust transfer of those systems to unaccountable private elites has allowed the wealth of the world to fall into a very few hands, at the expense of very many others who have been economically oppressed and/or have gone entirely without. A new generation of economically aware citizens can change that. While it is fine for private banks to serve society and participate in the management of money and money creation on behalf of the rest of us, it's unacceptable that they continue these anti-democratic practices. Today, even our governments are required to "borrow" money into existence, at interest, from capitalist banks. In the future, we must ensure that banks respect our democracies and serve us as foundational components of a rights-based and largely interest free economy.










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