Consider a pool of money. How does it do anybody any good? It has no value if it won’t buy service or goods. Suppose it has value, but most people don’t have any. To get money, people have to work for the few people who have it. Since there are just a few people who have the money, and there are far more who need it, those who have it can be very fussy about who does the work, and they won’t have to pay the workers much because there are thousands of desperate people competing for jobs that are inadequately compensated.
Money is an economic resource. A pool of money in few hands is a monopoly. Monopolies raise cost at the same time they lower value. So the money that is hard to get costs more labor, or more goods. The few “haves” segregate the society for control over the many “have-nots”, who are grouped from most favored to least favored, and, incidentally, least understood by wealthy people who dictate the lessons to be learned by the have-nots. It is these lessons that determine the pecking order of those who are not wealthy.
In the USA, according to a Harvard study in 2004, 1% of the population controlled 20% of the wealth. The top 20%, including the 1% and their lackeys, controlled 84% of the nations wealth. The next 20% controlled 12%, meaning that the top 40% controlled 96% of the nations wealth.
Those statistics indicate that about 60% of the nations population is fed, clothed, housed, and educated on 4% of the nations wealth. This imbalance appears to be worse in the ten years that have passed since that study.
This is the economic scenario of most, perhaps all, of the crumbling economies in written history, and collapsing economies spawn the poverty, injustice, and war that we are taught are just part of histories uncontrollable cycles, but there is more to understand about money.
Any successful economic venture has two things that it needs to do. It must solve the problems that weaken it, and create a better environment, for its citizens. Economy is about making things better. With those problems solved it will succeed, success for the whole team.
The problems are to eradicate poverty and prevent injustice. For that to happen the whole team must try to make it happen. Only 40% of the team has access to money. The other 60% operates on just 4% of the money. This poverty is inflicted at the same time the majority, 60%, are misunderstood, and treated badly. They are less than enthusiastic about the financial sector that lords over them. At least that is the way it has worked in past history.
There is still more to understand about money. When it is not distributed somewhat evenly across the population, people are forced to work for the follies of the rich, because they are the only ones who have money to pay for service, or goods. A population that is forced to work for the wealthy while the rest of the population is poorly served, and poorly protected, produces a sinking economy, a depressed, despondent population that is concerned with its own day to day survival.
Money is unable to be used productively if it can’t be used to solve the economic problems, stopping poverty, and eradicating injustice. The pool of money has less value because fewer people work less industriously and less creatively in the absence of an ethical, kind, mission. There is, quite simply, a lack of trust. People, justifiably, feel they have to look out for themselves, and that is what humans are incompetent at, a little more, or a little less on an individual basis.
As income disparity increases, an increasing number of people work harder for less. They are often regarded by the wealthy as subhuman, and treated as such. Part of that treatment is their education. Economies that monopolize money, have historically also monopolized education, an apparent strategy to retain and increase their power in the presence of sinking economic clout. Force and deception are the apparent tools of disingenuous leadership. Part of the deception has been achieved through propaganda, miseducation, and forced educational abstinence.
Thomas Jefferson referred to adequate education as being necessary for any citizenry to successfully govern themselves. That is the lesson of paramount importance in economics, how humans serve and protect each other. It is a subject that is practically absent from the world stage. This absence is caused by forced educational abstinence. In its place is propaganda that hypes ideological superstitions that cause depression and despair for half of the world’s population, an unsatisfactory existence for much of the rest, and insensitive degradation for humanity.
In my twenty-six years as a public school teacher. I never told my students that 60% of them would be competing for 4% of the wealth, and 40% would be competing for .3% of the wealth. I didn’t tell them that even by working long hours they would not make enough to be able to afford much, and they would not command much respect because part of the propaganda is that poor people are lazy, stupid, or genetically inferior, or they have subversive beliefs.
I didn’t tell them that when a person obtains a secure job that pays a living wage, it comes at the expense of someone else who needs the job, but wasn’t hired. I didn’t tell them that many of my vulnerable students would be lured by advertisement into lifestyles that would impair or destroy their lives and the lives of those who loved them.
Perhaps the explanation is that my teaching was of poor quality, but do you know anyone who knows how money is supposed to be economically distributed? Have they explained it to you? The information is veiled in secrecy. Those whose jobs are to administer the economic system are failing their mandate, and that is the trend in history. Education cannot proceed faster than knowledge is obtained. People that administer the economic system become increasingly brazen at controlling access to monetary information. As income disparity increases, economic administrators are always paid well to keep money from the “have-nots”, as a strategy to greedily garner more wealth for the “haves.” Although that seems to be stupid policy, adverse to humanity, expertise at being sycophants puts many of these people in the upper echelon of the sinking economic ship. They are individually unable to stop the gaping hole left by superstition and ignorance so they just take advantage of the situation. That has historically been the case.
Many of the things people know have been learned by observing animals. We have noticed that competition for food and space, along with strength and cunning are what greatly determines their survival. People are different. Their survival and the quality of their life depends on cooperation. Although we are all individuals, we are also a people, with one economic body, and although other species are colonial and cooperate, we are unique, in that our capacity for safety and well-being began with the very first human inhabitants and was increased or changed with each succeeding generation. In addition to our genes, we inherited our culture, attitude, language, knowledge, tools, and many of our human made resources.
In addition to the things that humankind inherits from previous generations, we as humans are uniquely positioned to use one of natures natural forces to serve and protect humans and humanity. This is a natural force, like gravity, and as with gravity its usefulness is not without danger. In fact this force, if misused, causes immense suffering for many individuals, and humankind as a body. The other thing about this force that is uniquely available to humans, is that it is the main reason that human beings are not extinct. This force is almost academically unstudied. We look at the havoc it causes, we look at its magnificent outcomes, and we look at its wondrous possibilities, superstitiously.
Just as Newton identified the need to identify and study of gravity, we need to identify and study this natural economic force that controls who we are. It is the same force that controls if we are.
Natural economic force works best, if it is unopposed. Bureaucracies use it to fight other bureaucracies. The result is that individuals and humanity are harmed by the strife. In fact the historical bureaucratic answer to peace on earth is bureaucratic supremacy, a huge monopoly that increases the cost and decreases the value of money, the same scenario that the article opened with. Worse is the havoc caused by bureaucratic conflict often eradicates individuals, or it could eradicate all of humankind. Once again there is repeating evidence of this in the lessons of history.
Also in history there is a string of evidence produced by many of history’s most respected intellectual, civic, and religious leaders, as well as its philosophers. The evidence shows that ethics has been hugely important in enlisting cooperation for the benefit of humanity. Practically speaking, ethics can be translated in any language to clearly mean kindness.
Kindness is not a passive quality. It is the aggressive pursuance of goodness. Every good thing that people do starts with an act of kindness. That act of kindness is the ethical reason for business, for government, and for economics. Economics is only economic if it is started and operated with acts of kindness. Economics only exists as a vehicle to competently apply kindness, and absent that kindness the force on humanity is antinomic, detrimental, though sometimes subtly detrimental to individuals and humankind.
Part of our education needs to include KC (kind Competent) accounting, not traditional financial accounting. What does accounting account for? Traditionally it traces the path of money for boon or benefit. The accounting may or may not be a satisfactory accounting because the economic value of money changes depending whether or not its expenditure is economic or antinomic. KC accounting clarifies the value of the transaction by determining first, that it does no harm, second, where and if value was added, and third, it maximizes the value of money.
The value of money is not actual it is perceived. The accuracy of its value is clearly determined as the value of what it is able to purchase. Ultimately each of earth’s citizens, opportunely, serve and protect the others. Economics is the primary method they use for this service and protection. Funds spent antinomically make the GDP a big number that has only a miniscule and remote bearing on the well-being of individuals and humanity. GDP is part of economic miseducation and ideological superstition. It is a pseudo mathematical excuse for hiding crucial economic knowledge.
GDP takes all of the goods and services we produce, and clumps them all together, the good part, the bad part, and the cost of cleaning up the bad part. It completely ignores the cost for damage that was not repaired, and the irrevocable damage done that is part of our legacy.
The total GDP measures the cost of the antinomic chaos that devalues human effort, and harms all of humanity, like a beach full of unsupervised children where many build sand castles. A few knock them down. Many toys are broken, stolen, or lost. Some kids are labeled with unkind names. Then there is a fight. Kids join groups for protection or dominance, and some cry inconsolably while others look for a place to be alone.
KC accounting is to economics, as supervision is to kids on the beach. Controlling behavior adds value and lowers cost. GDP is a method of calculating the cost of human behavior. The bigger the number the greater the cost. The cost is less when people are kind, but the value is infinitely higher.