I am glad to present another interesting essay written by Dozent (Stan P.), this is a continuation on the subject of Baby Boomers culture (that we fondly refer to as "Monkeys"), this time discussed in the context of economy and money. I hope you will enjoy it.
Stan (Heretic) wrote Re:
I found that being too "business"-obsessed in the sense of seeing monetary rewards in everything is also a sign of a "monkey". The reverse is probably also true. Real people want to be paid real money but they (we) are not too obsessed with it. Playing games with monetary reward, that is withholding it when due and rewarding arbitrarily when it is not warranted, is _their_ signature.
I always knew it and I have acted upon it.
What is money (I mean real-money) ? It is equivalent of work or in other terms a rechargeable work-battery :-)
I like to work. It is normal. Why should I be obsessed with WORK. If you can not make money then you do work nobody wants. But the problem is: you NEVER KNOW what will sell.
A few years ago I found your "marketing research.on your sensors a little funny, but "harmless" so I said nothing. Simply estimating the potential size of the market is a good thing. But that as far as I would go.
I know "if the product WORKS for me then it will most likely work for others". I veered off topic. "Monkeys" are obsessed with money because they can not do any useful work. For them money is NOT an equivalent of work. No wonder they print it - they can not not see the equivalence. They either "hustle" money or receive it for being loyal to the boss. They can not earn it on the open work market because they have no marketable skills. They can not make things other people need. They are obsessed wit it because it is their constant problem.
Mind you, this definition automatically defines who is a "human" [in our sense] and who is a "monkey" [figuratively, not literally, in a cultural sense, S.B.]. The critical words are "what people need".
It means that a singer like lady Gaga is a human being because she creates something "people need" and are willing to pay for. It means she is working for her money. It is a kind of work you and me do not understand, but we can not be Astronauts either.
The definition of "useful work" is that is has a "monetary value" on the market. Loyalty and arse kissing does not have a monetary value on the market though it does have value to the Top Monkey and is rewarded accordingly. However, nothing has been created neither by loyal followers nor the boss. The money, being an equivalent of work must be stolen by a form of "taxation" or simple extortion.
This defines instantly the role of the government. What government creates ? Services ? What services ? No, the only "product" government "creates" is SECURITY. Mind you, it is a marketable product and people are willing to pay for it. Providing security is a full time job.
Now what is a value of a well equipped army. That depends. If you are facing Hitler or Genghis Khan, nothing else matters. The problem is a professional army could not stop Hitler. If fact, it was wiped out and proved completely useless. In the end a few million of regular folks had to leave their stores, their factories, their fields, they had to learn to fight and they kicked ass.
So the security it is not worth 50% of MY EARNINGS. If it is, it is time to make weapons and go to war.
There is a reason why the "monkeys" do not understand the connection between work and money. For them, there isn't any. No matter how hard they "work" ie talk, go to meetings, make noise and other efforts nothing happens.
There is no product, no buyer, no sale and no money.
Now we can go back and create some definitions.
[Goods and Services]
To state the obvious: people need things. In order to survive people need goods and services like food, shelter, clothing, tools etc... These goods have to be made. For the sake of efficiency and quality work specialization is required so most of the goods we need is made by other people. By definition services are provided by other people. Primeval societies "found" things they needed. There was a very high "intrinsic" component in goods. We hunted land animals and fish, collected nuts, dug roots, used wood, bone, native gold, obsidian and flint. With few exceptions like fish we have exhausted the available supply of things we could find. Now ALL the goods have to be made by human labor.
[Trade and Economy]
The second factor is an economy of scale. It was difficult to kill an animal to catch a fish or to make a bow. It was even more difficult to produce "high tech" product like a bronze axe or a gold ear-rings. It required a skill and a know how. Once the smith made first good axe, it was easy to make 10 or 20 more. Then one could trade them for some beautiful sea shells :-) You know I am serious there. Trade is as old as humankind. What was the first trade? Well, the Bible is probably right: a woman exchanging sex for food though a Snake had nothing to do with it!
[Money, Value, Currency and Fake Value ]
Trade started as barter. Money was invented later to facilitate the exchange. Money is a concept. It is a measure of "value" humans attach to goods and services. Value is the desire of humans to "own" or "consume" goods and services. However, money has an weakness. It needs a medium to be implement in practice. A medium like sea shells, iron bars or gold and silver. The medium has to be convenient to carry, indestructible, difficult and expensive to produce, impossible to fake, easily recognizable and uniform (that is why diamonds are not money). It has to have value to humans but it can not have any utility value so it will not be destroyed. It has to be rare and expensive but not too rare nor too expensive.
The only medium of exchange that survived the centuries is gold and silver. Over time, gold and silver has become money though it does not have any use and little utilitarian value.
Gold and silver money has serious flaw - the supply is limited by the availability of metal. However, this is alleviated by increasing the velocity of money and creating credit. Velocity of money is a fancy name for reuse. A buys from B, B buys from C etc... the same money facilitated multiple transactions.
Credit is a legal note created by a creditor, and backed by his tangible assets. It is an obligation to buy back the note after the prescribed time for the principal plus interest. This obligation must be enforced by law. Money is an equivalent of labor. It works like a rechargeable battery. It "stores" human labor in a convenient form for later consumption. However, people rarely need a pure human labor like the "professional" services of a doctor or lawyer. In most cases we need "goods" ie. things which have been made by labor. The labor itself is hidden from consumer in the "value" of these goods. The value of the "product" is a measure of a desire of people to consume it. Thus, "money" is an equivalent of goods and labor and a store of value ie. desire to consume.
Credit is equivalent of work to be done in the future by the debtor in exchange for money borrowed from the creditor. To account for the risk to the creditor the borrower has to pay interest.
Currency is a credit note issued by the government as a legal means of exchange. In theory, the government promises to buy it back at any time for money. The government is a debtor, the saver is the creditor. It is a cheap credit as the government does not pay interest [or very little of it]. Money can not be easily created. It has to be saved and pooled to create capital.
Money is an asset and will hold value for as long as people desire gold and other rare objects.
Currency is a piece of paper. It has value as long as the government says it does. This "value" can be wiped out with one stroke of a pen. Currency is someone's liability. It holds value only as long as the issuer is credit-worthy and can pay back its debt..
Gold Rubles and gold Krugerrands are money . The Reichsmarks were currency. It lost all real value on 9-May-1945.
In the mid 20 century something curious had happened - currency had become "money". The liability has become an asset. The piece of paper acquired value backed by the creditworthiness of entire nations. It is not the first time it has been tried. The kings of France tried this. The kings of England tried this. The results were rather sorry - the kings lost their heads. The current massive experiment lasted 70 years for over 3 generations. One could think it was successful, but the fraud was just so big it took a very long time for the results to first appear. Now the cows are coming home. The currency will go to zero again, but that is a subject for another essay.
This simple definition of "money" and "currency" has a very far reaching consequences. First, it provides a clear distinction between human producers and parasitic consumers. Second, it provides a clear distinction between money and currency. Third, it clearly defines the role of the "government".
There are many people who have no skills or no desire to produce anything. Yet they need the manufactured goods and services in order to survive. I call them "Monkeys" because just like the monkeys they tend to congregate into troupes and many are actually destructive. The critical statement is this: since Monkeys do not make anything they can not "earn" money. They have to steal it or extort it. They congregate in groups of alike individuals and use agression to hustle a living.
The Currency is NOT money. It is a piece of paper. It obfuscates the role and the very nature of money as a deferred labor. It enables the incompetent, destructive "monkeys" to pretend they also create "value".
However, currency is designed and promoted as the equivalent of money thus the equivalent of labor but unlike labor, it can be printed at will. It makes "credit" cheap. After all, all it takes is to print a piece of paper. It makes savings an oxymoron. The banks do not need savings to issue credit. Sooner or later credit printing gets out of control and the whole fraud unwinds. We are witnessing it now.
The only products government can manufacture and sell is law and security. Personal security. It is a legitimate role and a legitimate products. In fact, it is priceless. Laws permit economies to function. It enables property ownership and civility. Personal security is the first step to political freedom which has been proven to promote wealth creation.
This has become a book. The real point can be made starting here with the "Monkeys" taking over the government in the times of prosperity and the replacement of money with currency. The system starts rotting from the top and the disaster is unavoidable.
I have no desire to write this book. I know you know the end. We both know the resulting cycle is very long. In fact, this may well be the explanation of the Kondratiev's super-wave. There has to be a longer cycle - about 3-4 generations. In short, the cycle starts with competent people and real money and it ends with "Monkeys" in charge and worthless paper currency.
See you tomorrow.
(Text in brackets  and quotes added by Heretic)
More comments posted on this subject, see under the previous article.