It should come as no surprise to anyone who reads this blog to learn that I’m not an economist. Without formal training in economics, I sometimes make statements about the subject that may seem pretty dumb. But, my lack of formal training in economics can sometimes be an advantage. Insofar as I’m not formally trained in what to think in the realm of economics, I also sometimes stumble onto what may be insight since I’m inclined to “think outside the box”. Why do I think “outside the box”? Because, without formal education on the subject of economics, I haven’t been formally “conditioned” to know where the “box” is.
What follows may be old news to most economists, but I doubt that most ordinary people have considered the subject. It might be another example of my ignorance—or maybe it illustrates a little common sense.
I haven’t yet made up my mind.
It’s my understanding that most of classical economic theory is based on a time when the world relied on gold and silver to serve as its asset-based money.
It therefore strikes me as possible that modern economic theory could be opposite from classical economics in some regards. Why? Because he fundamental unit of measure of today’s economics is a debt-based currency system.
Classical economic theory was primarily based on asset-based money.
To my way of thinking an asset-based money is like a positive 1.
Modern economic theory is based on theories discovered in classical economics, but applied today with a debt-based currency.
To my way of thinking a debt-based currency is like a minus 1.
Assuming that debt and real assets are two fundamentally-opposed concepts, is it reasonable to suppose that modern economic theory (based on debt) can conform to classical economic theory (based on assets)?
In fact, it’s hard for me to imagine how modern economic theory could’ve “accidentally” failed to openly recognize and explain the fundamental difference between itself and classical economics and asset-based money. Again, I’m not an economist, but I wouldn’t be surprised if “modern” economics intentionally refused to explore the difference between classical economics and modern economics for fear of alerting the public to the vast and irreconcilable differences between asset-based money and modern, debt-based, fiat currency. I suspect that refusal might be intended to deceive us into the confusion that follows when we try to comprehend an economy based on fiat currency in the context of classical economic theories that depend on asset-based money.
If my suspicions are roughly correct, of course “modern” economics is hard to understand. It’s like trying to solve mathematical equations that were designed to work only with positive integers by feeding in negative numbers.
Figuratively speaking, modern economics is constantly trying to apply mathematical formula designed to work with the asset-based money of classical economics, to find the square root of minus one. They can arbitrarily declare the answer to be “i,” but there is no real answer. The answer is finally “imaginary” and irrational, as is our modern economic system. In the end, is it even possible to rationally imagine that a man, a nation or the world can achieve prosperity while using a debt-based monetary system? The more debt you have, the richer you become? Isn’t that idea insane? Isn’t it unsustainable?
I’m not arguing that “modern” economic theory never before recognized any difference between asset-based and debt-based monetary systems. But I am suggesting that the significance of that distinction may not have been adequately presented to the public. More, I’m suggesting that that the failure to publicly distinguish between asset-based money (gold; payments) and debt-based fiat currency (promises to pay) may be intended to make modern economics virtually incomprehensible to the vast majority of people. So long as virtually no one can or does really understand modern economics, it’s a lot easier for people in positions of authority to exercise unbridled power.
Today, we award Nobel Prizes to individuals who come up with new insights into “economics”. But if you read Chapter 47 of Genesis closely, you’ll see that Joseph understood economics sufficiently well to single-handedly reduce a whole nation (Egypt) from freedom into bondage without shooting a single arrow. In fact, Joseph was so successful that he was cheered and applauded by the very people he placed into bondage. Virtually all of those Egyptian people didn’t have a clue. And that was 3,800 years ago. (For more information on this topic visit “The Story of Joseph—the World’s First Economist”.)
But the fact remains that, according to the Bible, at least a few people had sufficient knowledge of economics to place an entire nation into bondage 3,800 years ago. If so, how much more new knowledge do you think we could’ve found over the past 38 centuries or could add today?
I believe that if you could fully understand the economic principles presented in Chapter 47 of Genesis, you’d know more about economics than 98% of the American population. You might even know “enough” about economics to understand what’s really going on in economics today.
I doubt that the “new knowledge” being discovered about today’s economics is real (in the sense of being true). I doubt that the new knowledge is really worthy of a Nobel Prize. I suspect that new knowledge may be merely a more sophisticated variety of smoke and mirrors used to deceive the world into believing that a debt-based fiat currency could be mathematically equivalent to an asset-based money and thereby convince the formerly free that they aren’t actually living in bondage.