At the base of this Austerity -V- Expansion war is the definition of money. What is it? How can it disappear? Where is it? Who has got it? Why do governments and banks not have enough of it? We live in the wealthiest, most automated, most productive, most informed and fastest growing economy ever – and yet have persistent, endemic poverty such as 35 million Americans on Food-Stamps and millions of families in loan–shark debt traps being paid less than a living wage; which means – for the slow witted and low IQs among us - that they can’t live. What are governments and corporate bosses doing?
Money is a set of political decisions. In a well run economy it is the accurate bookkeeping record of all the wealth and current transactions in the real economy. The real-economy is the real goods and services owned and transacted – money is a set of IOUs that keep track. Money cannot be “lost” but it can be rationed.
When the Egyptians learned how to tame the River Nile and produce surpluses and became very wealthy – a major chunk of their wealth was diverted into assuring the royal families of eternal life by building pyramids. These immense public projects needed immense resources – men, stone, wood, paint, gilding, sarcophaguses, embalming and funerary art. The food, clothing and housing of the workforce was authorised by the Pharaoh of the day, who effectively issued IOU’s (money) to the public granaries, wine-stores, weavers, clothiers etc. for the all the supplies needed for these large infrastructure projects. This monetary expansion, quantitative easing, additional economic activity not only did not bankrupt the nation – but despite the silly underlying concept, made Egypt ever more successful – over a thousand or more years. The activity provided jobs, focused talent and education, created national pride, tourist attractions, medical advances, writing, the arts and military might; and transported the bosses to Heaven - maybe.
Today’s well paid, overpaid, fully pensioned world leaders – in business and government – lack any vision, direction, ideas or understanding of wealth creation. The majority of them are simply scooping up as much cash as possible, as fast as possible, climbing the golden ladder to the steel-ceiling, clambering through and smashing down the trapdoors – onto the heads, hands, children and lives of the rest of the world. Then they whinge and trot out their self-serving bullshit economics, “…the money has run out”. The money has not run out – it cannot run out – it should expand with our successful real-economy – the richest 1% is choosing to keep what they’ve got and bully and starve the 99%. They want to stop the clock – freeze the process – with themselves at the top – for ever.
This is the wealthiest society ever and the real-economy is expanding fast. The bookkeeping, money-economy has to be reformed to keep pace. It is time to repatriate the past 30 years of siphons to tax-havens; bring the cash ($11 to $18 trillion) back to the originating economies, invest it in projects in those economies, and thereby re-balance all the economies around the world. Then we can continue to build a marvellous future for all.
7 May 2012.