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5. The three qualities of money

Let's look at money once more, but in another way and ask ourselves: what can you actually do with money?

 

In the first place we use money to buy things. After all, we need food, clothing, a roof over our heads and so on. With money we buy the things we need to live. What is the impact of this kind of money on society? It enables economic production. Due to the fact that people purchase things they need (and don’t need) everyday, it is possible - and necessary - that the economic production process remains in motion. With this money, we can call it ‘purchase money’, we all make it possible that what we need is being produced.

 

When we have more money than we need, we can save the money that we do not (directly) use or need. We can take it to the bank and put it into a savings account. But what happens then to this money? The bank immediately lends it out (in fact, they lend out more, approximately 14 times more than the amount we put into our account). This money, called ‘loan money’, is lent to entrepreneurs who are able to finance their investments with it; a new office, a new production line, expand and so on. Loan money enables entrepreneurs to invest in the economy and thereby ensures us that the economy can continuously (re)develop itself and innovate, because that is what actually happens when we invest in the economy. When the economy is genuinely aimed at (would be aimed at) fulfilling the needs of mankind, it is important for everyone that there is a permanent stream of loan money to be invested in the economy.

 

And then there's something else we can do with money: we can spend it on something without economic value, on something that doesn’t offer any economic profit. One could also say: we give our money away. We give it to a teacher, a doctor, a priest, an artist or a scientist, so that, thanks to this money, they can do what they are good at. For this money, which we call ‘gift money’, we don’t get anything concrete back. We do not exchange it for an economic value. However, this money is very well spent: gift money enables people to develop and makes it possible that science, art and education flourish - and in this way foster human development and fertilize society as a whole.

 

Purchase money enables economic production.

Loan money enables the economy to expand and renew itself.

Gift money makes development possible and forms the bridge to the future.

These are the three ‘qualities’ of money.

 

John Hogervorst

April 2014


John  |  2014 04 16  |  Permalink  |  Share

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