Relationship between money and the real economy (the production of goods and services)

If someone finds himself in the open sea on a deserted island, with hundreds of millions of euros or dollars while there is nothing to eat or drink, he will die quickly. Which shows that money itself is nothing. So what gives value to money in our societies ?

The possibility to exchange it for goods and services !

On the one hand there is a total amount of goods and services available, and on the other a total amount of money (in various forms).

Money can only buy what exists! If the distribution of money in the different strata of society changes, it does not change the quantity of goods and services available, it only changes the possibility for these social strata to access them. The current system, the main purpose of which for everyone is to get money, is a form of struggle between individuals to seize the greatest possible buying capacity.

The struggle to get more money is actually a struggle to grab more of the cake.

The current Western economic model makes no connection between the amount of money an individual obtains and the production of goods and services by the individual. Since, in the more or less short term, the standard of living is determined by the amount of money that the individual has, the individual uses all his energy and ingenuity to obtain the maximum amount of money. The result today? An economy in which the amount of money increases sharply while the production of available goods decreases within our countries.

We have moved from an industrial model to a financial model, from the real economy to the financial industry. This explains the disinterest in all that is production with the consequence of the closure of industrial tools one after the other. Why spend money to get more money through an activity in the real economy when the financial industry allows those who have access to it to get huge amounts of money directly ? The reduction in industrial activity leads to an equivalent reduction in the amount of money distributed to the strata of the population working in this part of the economy. A first obvious consequence is the reduction in the level of consumption of these strata of the population.

But there is a more serious consequence. The money created by the financial industry has no equivalent in the real economy. It can therefore not be easily exchanged for something real inside the system, but only for goods and services from outside. However, money can be exchanged for goods and services if and only if those who produce them agree to this exchange. As long as the goods and services used are produced within the system in which money is created, it depends on the balance of power existing between the different social strata. But as soon as goods and services come from outside, one may wonder what interest foreign producers have in exchanging the product of their labor for money created without real value!... The purchasing power of money in the form of our currencies (essentially the dollar, or the euro) depends on the acceptance of these by the producing countries. We exchange a currency essentially created without a real basis for goods produced by other countries.

This type of exchange can only be imposed directly by military force or, more sneakily, by various media, social or economic manipulations. It is not difficult to understand that foreign producers will use all their energy to stop this type of trade that impoverishes them. The conditions for a confrontation are established. Inevitably, once cut off from their ability to transform the money they create into goods and services at will, financiers will, like the aristocrats during the French Revolution, find themselves in misery. This clash can only have three outcomes : the military defeat of the new financial aristocrats and the collapse of the system they control, their overthrow by the population or the terrible destruction of a third world war.

In the West, individuals have learned all their lives to spend their energy to earn money that has always represented wealth in their eyes. This has been instilled in them by their education but also imposed by the economic and social organization in which they live. It is difficult for them to admit that in this way they were just somehow slaves to those who control the financial system, that is, the creation and distribution of money. As one leader of a large American group said a long time ago, if the public knew how the system actually worked, it would not last another day....

One of the contradictions of the present era is that if the real economy is real wealth, producing goods and services cannot be done without money because that is how the system works. What adds to the difficulties is that the production of money without counter-value is the equivalent of a tax imposed by the financial world on the real economy. Within our countries, this greatly reduces the ability of producers to compete with those who do not bear this heavy burden. Caught in the grip of these contradictions, those who would like to revive activity in the real economy face obstacles that are difficult to overcome.

Unfortunately today, a very significant part of the population makes money without working closely or remotely in the real economy, which means that they too have an interest in the current system continuing. So there will be no revolution, maybe a civil war, a third world war is highly likely, even almost certain. We are in a situation similar to that described by Wilhelm Reich in his book, “The mass psychology of Fascism” and published in 1932 . He correctly foresaw the rise of Nazism, Fascism and the resulting war.

Are we going to repeat the same kind of mistakes that led to the second World War?

CIESINT   Published on 2014-09-25   Read by 2878  Translated on 2021-06-07

Copyright : this article can be reproduced if a hyperlink is provided together with the name of the author.