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20:35 min 128 kbps stereo 18.9 MB
Text written by Graham
Is the Structure of Our Economy Beyond our Cognitive Capability?
All money in our economy is created out of the financial-value of an asset.
Two forms of this money are discussed here.
They are ‘hired money’ derived from asset, and ‘income-money’ in the form of profit.
Both these financial forms are byproducts of ‘asset created’ hired-money.
Hired-money is money which is created as a financial representation of the value of an asset.
Profit is the byproduct of ‘income-money’ derived from someone else’s hired-money;
However, these are financial-byproducts and they play distinctly different roles within our economy.
Asset-created, hired-money is the money we use throughout our economy;
it has been created as a financial representation of the value of an asset.
Hired-money is the basic-money and the basis of our financial system and as such, is the only money.
The term ‘hired’ is used here, instead of ‘borrowed’ as it is the more accurate description.
What is an Asset?
An asset can be: existing property – real estate or other, entrepreneurial or profitable-idea, assured income (your expected profit), national net income or potential income, etc.
An asset is also known as security in banking terms. We offer an ‘asset’ as security to be converted to a financial form.
The life-cycle of all finance begins with and ends as an asset.
It begins when a bank converts the value of a client’s asset to a financial form that is then ‘hired for a fee’ to the client.
The hire fees are variable and commonly known as the ‘rate of interest’.
The fee charges come to an end when the client’s hired-money is returned.
The bank then reconverts it to asset by canceling the hire-agreement.
That hired money no longer exists.
And the asset is returned to the client.
In other words, the asset no longer exists as money.
Profit.
Profit is the ‘form of hired-money’ you get to keep, because it has not been hired by you.
It comes as wages, salaries, investment-dividend, profitable trade deals, etc. The only money available to us to purchase anything.
Banks are involved in the economy in the same way as other businesses.
Banks offer financial-services and financial-products.
From goods and services they hope to make a profit to pay investors, staff wages, salaries and bonuses, and overhead costs .
The business of banking could also be seen as a manufacturing industry.
Banks make expensive financial-products that they convert from assets and they hire the liquidated asset to the asset’s owner.
Asset converted, hired-money is very costly to the client.
It is hired by the client for one specified purpose, which is profit, and has a nominated life-span ~ limited by the terms of the contract.
The asset has not been bought by the bank.
The bank’s financial product has not been borrowed but hired by the client.
The bank holds the asset as an actual financial deposit.
Banks offer a key service by producing a product without which there would be no financing of commerce as we know it and no economy as we know it.
Our present financial system isn’t a bank-driven-system but a profit-driven-system.
In an all out effort to attract profit ~ all organisations whether governments or industries ~ compete as businesses ~ offering goods and services of every shape, size and description ~ not for the benefit of humanity ~ but for profit.
Making profit is what all business is forced to do, what they must do for economic or financial survival.
Food is not produced so that people may eat ~ it is produced for a different purpose ~ to make a profit.
Without a profit ~ there is no money with which to access the food.
This is something that two thirds of the world’s population experience on a daily basis.
There is no shortage of food; what they suffer is the scarcity of profit.
All business suffers the scarcity of profit. Sales and profitable trades must be made.
A market must be found no matter what the cost in physical-sociological, environmental exploitation or degradation.
The sale of armaments require blood sports, wars or ‘interventions’ that invariably end in fear, death and destruction but of course they can’t end, sales must continue.
Profit is scarce because of the high cost of finance. There is the cost of the hire fee and then the increasing cost of labour especially local.
Production costs must be kept to a minimum; meaning fewer local jobs by exporting them to third-world cheap labour countries.
Cutting labour costs results in less money in circulation resulting in fewer sales and, or fewer profit opportunities.
Hired finance begins as asset and ends as asset. Its one purpose and usefulness is profit-making.
But the profit you make or have, is someone else’s hired money that extracts a hire fee from them.
Hired-finance reverts to asset so it is not circulating in our market-place as our purchasing-power.
So a profit derived from export sales is needed before we have the finance to buy the goods we produce.
Competition in business means eliminating the competitor from the contest in the struggle for the scarce profit.
In the rules of business and commerce the winner survives another day.
Profit from another’s hired finance becomes absolutely mandatory for consumers to access products.
Our economic, social and cultural endeavors are narrowed then to just one purpose, to just one end: the pursuit of profit.
We live with the illusion of a civil and moral world, where philosophy and ethics play a part in our behaviour; the reality is that the rules of economic survival demand that we behave otherwise.
We exploit.
Exploitation of all available resources is mandatory for our economic survival.
We must marginalise, exclude and condemn others to poverty for our own economic survival.
Cooperation is a dirty word in our struggle for profit, except in teamwork so that one group may better compete against other groups.
We use our ~ ‘superior skills and intelligence’ ~ to compete with and abuse the environment and seek to control nature ~ and take advantage of and exploit each other’s weaknesses, fears, desires and socio-economic status.
There are those who listen with sanctimoniously baited breath to environmentalists, ecologists, philosophers and ethicists.
Most of us nod our heads in agreement, wide eyed with apprehension at their dire warnings.
But we refuse to take any responsibility for the economy that we as homo sapiens; not God; constructed.
It is our home grown economy that actually demands and drives our social and global vandalism. Our almost global refusal to investigate the economy means we are continually supportive of it.
We don’t even want to know about it: how it works or what it does, yet our economy is but a construct wherein exploitation is mandatory for our continued economic existence.
We naturally choose survival even if it causes conflict by competing for and denying others access to scarce profit.
We actually marginalise, exclude and condemn others to poverty.
Occasionally the immorality created by the dictates of our economy may create a slight feeling of culpability.
We somehow suppress any subliminal guilt feeling by pontificating about much needed, moral and social reforms.
Social posturing is understandable and predictable when it’s realised we are completely unaware that such reforms can’t be implemented.
Moral and ethical reforms are not possible within an economic-culture that’s dependent on competition, acquisition and conflict.
Ignorance of economic effects does somewhat shield us from the reality that the rules of economic survival demand that we behave otherwise than ethically.
Competitive behaviour becomes so entrenched in our culture that conflict seems a basic human condition.
The reality is that the rules of economic survival demand that we behave otherwise than ethically.