The Inevitability of Money & the Wealth Creation Myth

A little detour into some basics of economics as I understand them. I address the inevitable emergence of “money” within any system that involves trade and the illusion of “wealth creation” as it is traditionally defined.

13 thoughts on “The Inevitability of Money & the Wealth Creation Myth”

  1. A few thoughts about economy as I see it: First, the earth’s resources may be bounded, but due to the sun shining, and people working, you will have a new harvest every year. That is in principle unlimited growth, over time. The rate of growth may be limited by the energy and water and space available, but growth is there, as long as you produce more than you consume.
    Second: Agriculture is the most important industry, vitally important for all humans. No food, no survival. Everything else is only possible, because the efficiency of agriculture has been growing rapidly during the last 200 years.
    Third: Human Labor and its efficiency is the crucial factor for creating wealth. Efficiency is depending on education and infrastructure, i.e. means of production. Creativity plays a role, willingness to work hard and take some risks, security, health care, mobility all play important roles. So it is much more complicated, than you described.
    Fourth: Wealth can easily be destroyed. A bomb on the semiconductor factory, a virus that kills half of the population, radioactive fallout on agricultural land all will destroy huge amounts of wealth in little time.
    Fifth: Stealing wealth from others, destroying other people’s wealth in order to suppress them, forcing people to work as slaves, denying a good education to people or simply killing them is redistributing wealth but in the end it is also destroying wealth, it is counterptoductive.

  2. 20 minutes and 54 seconds of my life I’ll never get back. That was as boring as watching grass grow. Dreadful. Economics 101. I learned all this when I was about ten. Stick to your day job of being paranoid about every news event.

  3. One crucial point to remember when discussing macroeconomics is this —
    The United States government does not need your tax dollars to PAY for ANYTHING……..
    The federal government does not “need” to balance its books like an ordinary household because the government is NOT like a household, unless that household has a legal mint sitting in its basement.
    As I type this now, it all seems so obvious, and unnecessary to defend. But I well remember the emotional rejection I felt the very first time I encountered this truth. It’s very much like we’ve all been programmed to believe that any money the government needs to spend, must necessarily be balanced by a tax increase somewhere, or a service cut somewhere else. That mental programming is completely false — the government “debt” is literally the public wealth. The dreaded “deficit” is in reality the money in your pocket and mine. Government spending is accomplished by keystroke, and tax accumulation is accomplished by keystroke. The phony “debt ceiling” could have been easily avoided by the minting of a trillion dollar coin.
    Wealthy bankers fear inflation and therefore do everything they can to convince you to fear it. And, in fact, “runaway” inflation is catastrophic for everyone (Weimar, Zimbabwe) but that danger is mostly an issue when the state itself is collapsing. Here in our time, we injected trillions into the 2009 bailouts, and then billions into “quantitative easing”, and last I checked, inflation was damn near negative. A little inflation is good for people who owe money to banks.
    This is not my invention, it is a legitimate economic theory called MMT, or Modern Monetary Theory and it is being promoted by professors at the University of Missouri, Kansas City. It is described pretty well here in the Naked Capitalism blog post:
    Proponents of MMT wish to use this theory to advance a program that leads to 100% full employment – and this notion of a “job guarantee” is a plan that is hated by corporations and summarily dismissed by libertarians. Bernie Sanders initially flirted with the idea of full employment but never endorsed it publicly.
    It is my personal suspicion that TPTB will take advantage of MMT by offering the public a UBI (Universal Basic Income) instead of a job guarantee. Once the general public is connected into and dependent on this income, they will be much more easily controlled

  4. A very good and different look at currency and wealth. One flaw in the presentation is that the Earth is getting bigger because of the action of the Sun. Matter and energy from the Sun continuously pours onto the Earth and resources like oil are being constantly produced way down in the crust well below any fossil fuel scam idea. Rockefeller was the guy who had his ‘scientists’ pressure the World into agreeing oil was a ‘fossil fuel’ so that the price could be controlled. So resources are continually being produced but some are more difficult to obtain because the easy obtained resources have been used up. Empty USA oil wells are filling up again.

    1. ” resources like oil are being constantly produced way down in the crust well below any fossil fuel scam ”
      Agreed. Theory supported by soft-tissue dinosaur bones, carbon-14 in diamonds, massive reservoirs of ringwoodite under the crust, and recent LENR transmutations. Curious as to where you’re going to for information….

    2. Yes, this is Abiotic oil, and it makes sence to me. Also the unlimited withdrawal of this material from the earths crust explains the ‘climate change’ slash earthquakes tuanamis etc. I liken it to a gasket in a car engine, it is ment to be the flexible layer to absorb the movement against the solidness of the rigid metal engine. This material is the gasket of the earths crust. And its being withdrawn faster than it can replenish. Thats a theory anyway. Go well !

  5. I like the change of topic and that you are brave to share material you are not expert on.

    The Earth is a closed system, I would call it a finite biosphere and I strongly agree with you about the ‘wealth creation myth’… it takes many people being poor to sustain one wealthy person.

    Good to explore the role of fractional reserve banking and the creation of currency (not money as there is a difference) from debt.

    Also… efficiency creating wealth… its all about how the efficiency is realised. If the worker keeps the efficiency then standard of living / wages increase… if the corporation keeps the effieincy then there is no benefit for the worker and the corporation profits.

    With the development of AI and robots to do the work of people (code, algorithms or physical) on a much larger scale than today there comes a pivotal point of historical importance… the answer to the question ‘how is the efficiency realised and who keeps the benefit?’ will have a huge impact on what it means to live in our society in the future.

    1. “Not an expert”? I thought I was an expert on everything… I just paid for an online crash course in the Austrian school. I think it’s the most aligned with my natural thinking. I’m going to be doing more videos on economics for sure.

  6. So, what do you feel is the toleration and intelligent strategy for “having money” and using it “wisely” once the dollar falls a part? I, and many, should probably be prepared. Any insight would help Nathan. (Peace)

    1. I do want to talk about how the current state of the economy is actually encouraging prepping simply as an investment proposition. That example shows how the proper mechanism of economics incentivizes behavior which is in the interest of the individual and society as a whole. As an example, I believe investing US$ in canned food and survival supplies will give you a greater ROI (in both value and US$) than putting that money in the bank or almost any “traditional” investment class (stocks, bonds, real estate, etc). I believe that physical goods of long-term value are actually a relative bargain right now, as inflation has so far been mostly limited to investment vehicles like stocks & real estate and commodity prices have been historically cheap. I expect that as larger investors begin to lose confidence in paper assets that there will be a substantial rotation of capital into “real” resources and goods, which will result in rapid inflation of consumer prices.

      In other words I believe the market is signaling that (in addition to buying silver & gold) investing in survival goods – food, water, shelter, clothing – may be a safer long-term way to protect your wealth than keeping today’s exchange value for those goods in US$ deposited at your bank.

      Thanks for the comment!

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