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8. No money outside the money cycle

Money that circulates in the cycle outlined in my last blog “The-circulation-of-money” is money that - judged from a social point of view - fulfills a useful and desirable role. Money outside this cycle does not fulfill a socially desirable task, or even worse, can have socially harmful consequences. This is the case with many activities in the financial world.

 

All money should circulate within the money cycle. Not only the money that is now circulating in the financial world, but also the money that is now used to purchase land, real estate or means of production with.

 

Land, realty and means of production should not be treated as commodities that can be sold or bought, as they are the ‘tools’ an entrepreneur needs to run his/her business. A farmer needs land for livestock and farming. A baker needs a building and an oven in order to bake bread. A transport company needs a truck and a retailer a shop.

 

Entrepreneurs, depending on the nature of their business, cannot do without these 'resources'. But when these resources cannot be sold or dealt in, when they are not privately owned, we can simply use them as tools which may be used by the entrepreneur who is skilled to use them, for as long as he is skilled to do so and for as long as his business produces an actual need.

 

Money should not be used to purchase land, property or means of production. It should flow within the money cycle and should not be ‘stuck’ in the ownership of the abovementioned resources. As this works detrimental to economic productivity, the value of money and the welfare of society.

 

Click here for more ideas for the society of the future: Ideas section.

 

John Hogervorst

April 2014


John  |  2014 04 30  |  Permalink  |  Share

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