What seems to be overlooked is that while money is the blood of the economic system, the premise of capitalism seems to be to save and store it. Fat is the store and that is destroying the system of circulation.
Markets need money to circulate, in order to function, but when we view it as a signal to extract from the economy and society, more has to be constantly added and ways found to store what is presumably saved.
Given the growth of the Federal deficit goes back to the New Deal, Roosevelt was not only putting surplus labor back to work, but surplus capital, as well.
Where would the capital markets be today, without the government soaking up a trillion dollars a year? Would it go to the parimutual wagering of derivatives?
It seems the magic of Capitalism is the degree to which public debt is used to back private wealth. Given much of this is spent on warfare and welfare, neither of which are viable investments for the future, when the future we are borrowing against arrives, the results will be catastrophic.
The other factor is that money and financial savings largely functions as a mass social contract, in which assets are backed by debts. So to create the asset, similar amounts of debt have to be incurred. For one thing, this sets up a centripetal effect, as positive feedback draws the asset to the center of the community, while negative feedback pushes the debt to the edges. As finance does function as the value circulation mechanism of the entire community, this effect 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. The Ancients settled on debt jubilees to reset this dynamic, but our economic systems have had too many resources to plunder and haven’t been otherwise stable for long enough to gain this degree of perspective.
The fact is that we do save for many of the same reasons, from raising children and housing, to healthcare and retirement, that if these could be invested in directly, as community functions, than everyone trying to save for them individually, we would have the stronger communities and healthier environments, as stores of value for the future. Rather than just feeding a financial mechanism that can only back this abstract wealth with equally abstract and increasingly sketchy promises of payment.
The irony of our individualistic ethos is the resulting atomized culture is more easily manipulated by institutional authority and mediated by a parasitic financial system. Networks matter as much as nodes. All the technology in the world can’t patch basic conceptual fallacies forever.
