National Economy
If economists understand their subject and know what they are doing, why do we have a worldwide economic crisis?
If people in government know what they are doing, why do we have a worldwide economic crisis?
As we have a world economic crisis, economists and people in government clearly do not know what they are doing. If they did, we wouldn't be in this situation. They do not understand what is wrong nor how to fix it.
What is the cause of the economic crisis and how can it be fixed?
The crisis has no natural cause. Everything needed to produce is still here: the labor, knowledge, factories, materials, and energy. The world is still turning. National Economy provides a practical solution to the crisis.
National economy is the study of how a nation, rather than an individual, can be made wealthy. In the study of national economy lies the answer to how all manufacturing that has moved to other countries and all jobs that have been outsourced can be returned to America, how real wages can be increased, and how, at the same time, the people can have more leisure. The problems standing in the way of prosperity are an unsound and fraudulent money system and a lack of understanding of the physical reality underlying economics.
Paperback: 175 pages - Sample Chapter - TOC
Book Dimensions: 6 x 9 inches, 15.2 x 22.9 cm
ISBN: 978-0-615-25921-5
Someone who did understand what is wrong and how to fix it was the original developer of national economy, Nobel Prize winning scientist Frederick Soddy. After doing pioneering chemical research, Soddy devoted himself to studying and resolving the very same economic problems we face today.
Since the time man harnessed inanimate energy to do work, scarcity of wealth has been purely an artificial phenomenon. In prior times, man was dependent on animal energy to produce the wealth needed for living, and thus production was very limited. Soddy knew that science had abolished scarcity. And yet he saw people were poor and starving as wealth was not being produced or distributed to nearly the level it could or should be. After conducting extensive research, Soddy concluded that the cause of poverty and scarcity of wealth was the fundamental structure of the monetary system and flawed economic ideas.
Two major results of his research were that first, banks have had and continue to have the power to create new money without any economic foundation. Second, there is a distinct and important difference between the economics that governs the behavior of the individual (individual economy) and the economics that governs the behavior of a nation (national economy). National economy and individual economy are different and need to be understood on different grounds.
Regarding the monetary system Soddy wrote: “I thought that, as a scientific man, I ought to know something about economics. So I studied the money system for two years and could make nothing of it. Then, one day, the truth dawned on me. What I was studying was not a system, but a confidence trick.” A confidence trick is a scam, a racket, a rip off, a con. And the trick is our double-money system. Rather than have one kind of money, we have two. In addition to cash there is electronic money, which exists solely as data entries in the computers of banks. Cash is insignificant in amount relative to electronic money. Nearly all money is electronic.
Soddy called the double-money system a system of “fictitious credits.” Soddy distinguished between genuine and fictitious credit. Genuine credit is when “the lender gives up and goes without what the borrower receives and pays interest for,” while fictitious credit is when “the lender gives up nothing whatsoever, but creates new money which his borrowers owe him and pay interest upon.” There is a fundamental difference between genuine and fictitious credit. Fictitious credit allows banks to get something for nothing at the expense of the whole community. If we had government-made money which was spent into existence, rather than bank-made money which is lent into existence, we would have far less debt in our society.
Soddy did not have kind things to say about the economists of his day. He said the double-money system “could not have succeeded but for the cooperation of the verbally educated economist and his imaginary ‘economic laws’ arising from the inverted importance he has given to money.” Money is simply a human convention and does not in any way contribute to the production of wealth. Wealth consists of anything physical that is of benefit to human life such as cars, stoves, houses, and clothes. While money and debt are forms of property and can be exchanged for each other, and money exchanged for wealth, neither are in and of themselves wealth. They are not incorporated into a physical product such as a house. Houses are made of bricks, wood, and metal. Money and debt form no part of their structure.
A nation is made wealthy through the production and consumption of wealth, not through finance and banking. Soddy likened wealth to a river constantly flowing. Every day humans are creating new wealth: cars, houses, crops, and clothes. An increase in the flow of wealth makes us wealthier, and a decrease in the flow of wealth impoverishes us. While individuals can save money and investments, it is impossible for the nation as a whole to be idle and live on its savings. We must constantly produce wealth, or we will starve, and the lights will go out. As Soddy said, “Only a camel can live on its hump.”
But instead, in part because banks are private enterprises, debts are maximized in order to maximize the banks’ interest revenue. “In banking mentality, wealth is being owed something. They act literally as if piling up national indebtedness was the goal of the nation instead of its creditors, and no other explanation is required to account for the staggering burdens of every sort of national and municipal debt, which wiser men now have to reduce and if possible extinguish.” Banks consider the debts they own to be their assets, while these same debts are liabilities to the rest of the community. Hence, when the housing market collapsed, the mortgages and mortgage derivatives became “toxic assets.”
What is physically possible should be financially possible. Today we are prevented from putting our people to work and producing and consuming wealth to the maximum by false economic ideas and the system of double-money. If the nation decides to adopt the physical rather than the financial principles of economics, based on the capacity of the nation to produce wealth, where money is the distributive servant, rather than the master of the economy, our prosperity will only increase.
Today money is provided through the creation of debt by banks for their personal profit. Money should be provided openly, honestly and scientifically by the nation in such proportion and in such a way as to allow for general prosperity. In the study of economics Soddy believed, “Wealth, the subject matter of the study has been deposed by the shadow, money.”
The book National Economy is based on the works of Frederick Soddy and presents in easily understandable terms and with many examples the problems inherent with our current economic system, how we got here, and the changes necessary to bring about a sound and stable national economy. It presents a view of economics that is based on the physical reality of wealth and ends with the solution to the world economic crisis. National Economy will help you understand in basic terms what is really going on and how the financial sector is destroying world prosperity. You will know why without fundamental changes to the financial system, the cycle will simply repeat itself, and the people will continue to suffer.
National Economy is a book that anyone can understand. No background in economics or finance is needed.Free Shipping Worldwide!
