Economics is broken, but you need to better explain the reasons.
While Capitalism is equated with a market based economy, the difference is that while markets need money to circulate, we see it as the signal to extract from the noise of society and the economy, to save and store. Resulting in this current bubble of financial speculation that is metastatically destroying the economy.
Econ 101 says money is both medium of exchange and store of value, but a medium is dynamic, while store is static. Blood is a medium, fat is a store. Roads are a medium, parking lots are a store. The hallway is a medium, the hall closet is a store. The average five year old senses the difference, but economists lack that level of insight.
Money is a glorified voucher system, but we assume it to be a commodity, rather than a contract between the individual and the community. So we think of it as a fuel, rather than an economic lubricant.
Since the asset is backed by a debt, similar amounts of debt have to be incurred, to store the desired assets. Given much of this debt is public, the secret sauce of capitalism is that public debt backs private wealth.
Those politicians occasionally railing against government spending are either naive, or cynical. It doesn’t take much intelligence to realize the capital markets simply could not function, without the government siphoning up trillions in surplus capital. Where would it go otherwise? Derivatives? Apple stock?
What if the government threatened to tax out what it currently borrows? Would people start screaming about the government taking “their” money? Whose picture is on it? Who holds the copyrights and maintains its value?
The fact is that money is a public utility, like roads. We own it like we own the section of road we are using, or the air and water flowing through our bodies. Its functionality is in its fungibility.
People who love money and hate government are like the fish that loves the worm, but hates the hook. If you don’t like the government, don’t use their currency.
We all save for many of the same reasons; raising children, housing, healthcare, retirement, etc. If we saved for these directly, by investing in them as community assets, than everyone trying to save for them individually, we would have stronger communities and healthier environments, as stores of value, not just resources to be used. Networks matter as much as nodes.
There really isn’t sufficient profitable investments to save the amount of notational value we feel we need.
As it is, our individualistic ethos just results in an atomized society, that is more easily manipulated by institutional authority and mediated by a parasitic financial system.
As the executive and regulatory function of society, government is analogous to the central nervous system. As money and finance are analogous to blood and the circulation system. There was a time when government was private, but when monarchs lost sight of the fact they served a function to society, in order to be served by it, they were usurped in favor of government as public utility. It is a two way street. Currently banking is having its; “Let them eat cake.” moment.
Not that finance could be a direct function of government, as the political impulse to print excess money is very strong, especially if it is being viewed as economic fuel. Like the head and the heart, they are distinct functions.
