How the Fed, Banks and Government Steal Our Money
E-Book, Englisch, 188 Seiten
ISBN: 978-3-86248-908-4
Verlag: FinanzBuch Verlag
Format: EPUB
Kopierschutz: Kein
What role does the state, government, and politics play in redistribution in favor of the super-rich? Why is a naive faith in the state anything other than a good strategy for the future for each individual citizen?
Anyone who has never really trusted politicians — even if it started out as only a gut feeling — will find confirmation in this book that this gut feeling was right all along. An easy to understand introduction to the question of why money is responsible for so many problems in our society.
Autoren/Hrsg.
Weitere Infos & Material
1. Why money does not need the state
“The people will miss those resources in the future that they ate up over the decades.” - Roland Baader Right from the outset, we would like to clear up a widely held misconception: money was not invented by any one person in particular, and it certainly did not appear as the result of some government decree. Most people know that money is very important, and they believe that it is right and good that the government controls it. Wrong! Forget for a moment our current monetary system, which we described in the introduction as bad money. Instead, let’s begin at the beginning. First, using a simple story, we would like to explain to you how money originally arose. The origin of money illustrates its true nature and shows us what good money is. And when you understand the nature of money, you are ahead of most economists, not to mention most of our politicians. Imagine a society without money. How would trade among people take place? Let’s take a trip back in time to a small imaginary city. How far back, we’ll leave to your imagination. Imagine that you live in a small city and you are a shoemaker. You make the best shoes in the area. Unfortunately you don’t have any other talents. Neither you nor your wife can bake bread well. You also don’t have any room to keep farm animals. Your children and your wife are widely admired for the shoes they wear. But you can’t eat shoes, and thus, from time to time, your wife has to go out and procure foodstuffs. But because money does not yet exist and you only have shoes to offer in trade, your wife is forced to find a farmer who — by chance — needs shoes and is willing to exchange a bag of potatoes or a ham for a pair of shoes. This may work once or twice, but at some point, the farmer does not need any more shoes; his shoe closet is full. When your wife comes by again to exchange shoes for food, the farmer will politely decline her offer. Let us stop for a moment. Did you notice that we used the word “exchange”? People need a “means of exchange.” Our simple example would get more complicated if we included additional professions: a butcher, a blacksmith, a bricklayer. (But notice: no banker! He is not needed here.) How much more could all these people — we will call them market participants — benefit from one another, if they had a means of exchange so that they would not always have to be on the lookout for someone who right then is in need of what they have to offer (whether a pair of shoes, or some dental work, or a plough)? Did you perhaps think to yourself how great it is that we don’t have these practical problems, since we have money that is supplied to us by a generous state? If so, we would like to free you from this misapprehension and continue with the rest of our story. The people in our small city like to adorn themselves with jewelry, particularly gold and silver. It is a long tradition that the men give their wives gifts of gold at every opportunity, when a child is born, when there is a birthday, and at anniversaries. The women in the city love these presents, but they also know how long their men have to work and how much of their goods or services they have to hand over to the goldsmith to obtain a ring, an earring, or a necklace. But gold is not just a status symbol. Its aesthetic qualities are also indisputable. Gold shines so nicely. Don’t you agree? For that reason, in our society, everyone views gold jewelry as something valuable. It is valued. In the meantime, in order to find someone who will exchange potatoes for shoes your wife has again walked so much that she has blisters on her feet — despite her good shoes. She has noticed that small pieces of gold are greatly desired. Pieces of gold are often traded, and people are willing to exchange them for any number of other goods. Or expressed a different way: Gold is a very marketable good. It can be exchanged at a favorable rate almost any time. So why not trade the shoes for pieces of gold? One day, your wife gets a bright new idea. Instead of trying to exchange shoes directly for potatoes, she could first trade the shoes for gold and then seek out a potato seller willing to accept her newly acquired gold. Thus, your wife needs, instead of one exchange (shoes for potatoes), two exchange transactions (shoes for gold, then gold for potatoes), but in doing so she could gain valuable time and thereby obtain the desired potatoes with less trouble and effort. Now, perhaps the attempt fails and she is unable to find anyone who will exchange gold for shoes or potatoes for gold. But your wife risks it. Let us assume that your wife is successful. She obtains the potatoes faster and cheaper by means of an indirect exchange using gold as the intermediate good (medium of exchange). The innovation was successful! From now on, your wife will use this system of exchange for all her undertakings. She will demand gold pieces to be used in exchange. But it is not just your wife who will change her behavior; others will imitate her. Due to the increased demand from market participants, the marketability of gold increases. This happens because, at her next get-together over coffee, your wife will explain to her friends about her successful “gold-for-potatoes” exchange. As chance has it, a farmer’s wife is in attendance. She also has a story to tell. Her husband used the gold that he received from your wife together with some gold from her jewelry case to acquire a new plow from the local smith. The transaction was much easier than usual, since the smith was happy to take the gold. Normally, the smith has such an overabundance of potatoes and hams from exchanges with farmers that he cannot consume all of it before it goes bad, and thus he had no interest in making more plows for farmers. Word of the new way to exchange goods and services spreads around our small city. More and more, people use gold as an intermediate good rather than exchange goods they have directly for goods they want. Through this, the demand for gold rises and gold becomes more marketable. In other words, it gets more liquid. It becomes a better means of exchange the more market participants demand it and use it — this is a self-reinforcing process. People notice that everyone benefits. They can cooperate more easily, and the division of labor is promoted. Everyone is suddenly relieved of the need to do all the work themselves: each person can concentrate on his or her specific talents instead of spending precious time searching for specific items to exchange. Everyone can more easily benefit from the abilities of others. Previously, this only took place when someone else required exactly the good or service that another person was ready to offer at the time. With the use of indirect trade, the division of labor can now expand considerably, to the well-being of all. The monetary system is thus important because the manipulation of it can have a dramatic effect on people’s lives and wealth, and because — as Germany’s hyperinflation in the Weimar Republic in the 1920s demonstrated — if the monetary system collapses, it is a certainty that the rest of society will also be shaken to its core. Without the use of money, our highly complex economy with its sophisticated division of labor could not be maintained. The division of labor allows for enormous productivity, which in turn allows us to feed a world population of some seven billion people. Without the use of money, most of the current trade in goods and services could not take place, the division of labor would collapse, and people would be forced to attempt to produce everything they needed themselves. The loss of productivity and well-being would be unimaginable. Without a functioning money, the majority of the current population would likely die of hunger and disease. The emergence of money, i.e., a generally acceptable means of exchange, allowed us to establish a complex division of labor and helped the rise of wealthy societies. Stated another way: without money, there can be no civilization. We should celebrate as heroes those who contributed to the adoption of some goods as money. Yes, exactly. Your imaginary wife is a hero. Can we agree that in our small mythical city, money has arisen? And did you notice that no state was involved, that no government enacted a law that made gold money? Money arose spontaneously in the market place because the market participants who wanted to engage in commerce noticed how useful this was for them. They did not even consciously intend to create money. Rather, with a monetary good as their means of exchange, they were able to achieve their personal goals better. And because everyone used the same means of exchange — gold — this good became more useful. Money thus has a main function as a medium of exchange. But it also has other functions, such it is also a store of value and can be used as a unit of account.4 Money can only fulfill its function of holding purchasing power and transporting it into the future if its value is stable. This is because, between the time when your wife sells the shoes for gold, and the time at which you use the gold for purchases, months may go by. Your wife decided in favor of accepting gold pieces in trade because she assumed that they would retain their value during the time in-between transactions. Marketability and value retention go hand in hand. Gold was often used in trade because it was a good store of value. And its frequent use in trade made its...
