I think there is a more basic problem with the physics of economics and how it serves society.
The essential premise is that money is medium of exchange, store of value and price setting mechanism.
Yet medium and store are very dissimilar. For instance, in the body, blood is the medium and fat is the store. A doctor wouldn’t be so foolish as to confuse them. For cars, roads are medium and parking lots are the store. These shouldn’t be confused either.
Money functions as a contract, with one side an asset and the other a debt. As such it is an accounting device and effective medium of exchange. Yet we individually experience it as quantified hope and try to save and store it, like a commodity. Though it remains a contract and thus to store the asset, similar amounts of debt have to be created.
The result is a centripetal force, drawing wealth into the center of society and draining it from the fringes. As those with wealth are better able, through a broad array of means, to leverage more, while those on the fringes have to deal with equally powerful negative feedback loops.
One obvious method for creating the debt to store this surplus money, is for the public, in the form of government, to borrow up the surplus and spend it in ways which support, but don’t compete with private investment. Where would those trillions go otherwise, in the currently saturated capital markets?
Unfortunately capitalism has mutated from the efficient transfer and circulation of value around the economy, to the creation of notational value, as an end in itself. Suffice to say, it is destroying efficient capital markets, the economy on which they depend, the society built on this economic foundation and the environment being stripped of all value, in order to store more notes in the system.
It is like the heart telling the hands and feet they don’t need so much blood and should work harder for what they do get. Then, as a solution, increasing the blood pressure to overcome the clogged arteries. Aka QE.
As a medium, we own money like we own the section of road we are using, or the fluids flowing through our bodies. No matter how expensive the car, or rare the champagne, there is only so much necessary to make the system work.
This is not a critique of wealth and power, but simply an observation of how the system works. We need to learn to store value in more tangible assets and better understand the circularity of nature, no matter how goal oriented we, or our culture, presume to be.
Most of us do save for the same reasons, housing, children, healthcare, retirement. If these could be invested in as community assets, rather than everyone trying to completely save for them individually, we would have stronger, healthier, less atomized cultures and societies. Nodes and networks.
This is not to say control of the money supply can be left to politicians, as they live and die on the hope they inspire, so printing money is a cheap high. Like the head and the heart, government and finance serve different functions to the whole organism.
The reality remains though, that private finance, like private government once did, is pushing well past its social function and will be brought to heel.
The people are not going to eat cake.
Either the system accepts serious reform and housecleaning, from the inside, or it crashes and burns and we start over again.The younger generations, being drowned in debt, are not going to hold this system up.
