How believing in immaterial things changed our economy system? Today's post is about money as well, but the focus is the grow of our economy. Last chapter I wrote about money and our faith behind it, you can check it right here.
The capitalist creed changed the way we manage money and helped us to improve our knowledge and technology. During most of human's history in this planet, the economy didn't changed that much. Human's production increased but the main factor was the demography expansion and not the evolution of economy system, the production per capita was static.
What really make the economy increase monstrously was the faith in the future. What!? Yeah. Let me exemplify:
Mr. Monopoly decides to found a bank in Hokkaido. Armond L. is an architect who lives in Hokkaido and received payment from one of his buildings. He decides to deposit 1 million of dollars in Mr. Monopoly's bank. Now, the bank has 1 million of dollars in capital.
Meanwhile, Dani Mi, a professional and experienced baker, but without resources (aka money), believes in her potential to open a bakery in Hokkaido and earn money. However, to build all the infrastructure which a bakery has, Dani Mi needs money, which she doesn't have. So, Dani goes to Monopoly's bank and convince him that found a bakery in Hokkaido is a great deal and an opportunity to earn money. Mr. Monopoly grants a loan of 1 million dollars, crediting this amount in Dani's account.
Dani Mi hires Armond L., the architect, to build the bakery. His price is 1 million dollars. Dani goes to the bank and deposit 1 million dollars in Armond's bank account (Mr. Monopoly's bank). How much money does Armond L. have? Exactly, 2 million dollars. How much money, in kind, exists in the bank safe? Yeah, you right! 1 million dollars.
What does it mean? That 90% of our money isn't represented by dollar bills or coins. If it's seems a fraud to you, so our economy system is a fraud as well. What allows all the banks (and the economy) grow up is our trust/faith/confidence in the future. Mr. Monopoly trusted in Dani Mi success and that she's going to pay the loan (with interest) in about 1 year, and if Armond L. decides to draw some money, Mr. Monopoly will be capable to provide the money. This special kind of money is called of "Credit".
"The credit allow us to build the present at the expense of the future." (Adapted from the book Sapiens - position 4856 Kindle).
R3D63/100
The capitalist creed changed the way we manage money and helped us to improve our knowledge and technology. During most of human's history in this planet, the economy didn't changed that much. Human's production increased but the main factor was the demography expansion and not the evolution of economy system, the production per capita was static.
What really make the economy increase monstrously was the faith in the future. What!? Yeah. Let me exemplify:
Mr. Monopoly decides to found a bank in Hokkaido. Armond L. is an architect who lives in Hokkaido and received payment from one of his buildings. He decides to deposit 1 million of dollars in Mr. Monopoly's bank. Now, the bank has 1 million of dollars in capital.
Meanwhile, Dani Mi, a professional and experienced baker, but without resources (aka money), believes in her potential to open a bakery in Hokkaido and earn money. However, to build all the infrastructure which a bakery has, Dani Mi needs money, which she doesn't have. So, Dani goes to Monopoly's bank and convince him that found a bakery in Hokkaido is a great deal and an opportunity to earn money. Mr. Monopoly grants a loan of 1 million dollars, crediting this amount in Dani's account.
Dani Mi hires Armond L., the architect, to build the bakery. His price is 1 million dollars. Dani goes to the bank and deposit 1 million dollars in Armond's bank account (Mr. Monopoly's bank). How much money does Armond L. have? Exactly, 2 million dollars. How much money, in kind, exists in the bank safe? Yeah, you right! 1 million dollars.
What does it mean? That 90% of our money isn't represented by dollar bills or coins. If it's seems a fraud to you, so our economy system is a fraud as well. What allows all the banks (and the economy) grow up is our trust/faith/confidence in the future. Mr. Monopoly trusted in Dani Mi success and that she's going to pay the loan (with interest) in about 1 year, and if Armond L. decides to draw some money, Mr. Monopoly will be capable to provide the money. This special kind of money is called of "Credit".
"The credit allow us to build the present at the expense of the future." (Adapted from the book Sapiens - position 4856 Kindle).
R3D63/100
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