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How Economy Works (Unedited – Raw)

August 7, 2012

Currency… is perhaps the most ingenious, and certainly the most crucial resource to have come out of a social, toolmaking animal society.

Forgetting for the moment the finite number of such toolmaking animals. The idea of currency allows large social groups: to exchange their specialized services into an easily translated and interchangeable means for trading various requisite specializations.

In a healthy economy, the currency and the services or goods rendered maintain an equal value.

To better understand this, I will use the base currency of the American Dollar.

However, Its important to understand that the actual measure of this currency,

for the purpose of this demonstration, Is irrelevant.

On one side of the scale you have 1 dollar, on the other you have a loaf of bread.

The scale is balanced. In the days of economic exchanges that used gold, gems and etc…

There was a finite amount of wealth that existed within the whole, with the exception of the additions from mining.

The gold/goods ratio was mostly even.

Even enough to be considered stable

But there’s a problem:

Gold and wealth is a precious resource in the human mind.

For this reason, humans crave wealth as an evolutionary response.

Ill explain what I mean.

Most people, especially when hungry

Will have a strong reaction to the smell of cooking meat.

You have this craving for meats and sugars because they provide your body with what was once rare opportunities for precious biological resources, such as fats which can be stored for energy or warmth.

For this reason, you also crave sugars, which can also be stored for energy.

As you can see, if something is rare but important; the stronger the craving.

You can use this analogy and trace the logic to anything else you feel is “important” and you can note the “desire” for it.

Back to the topic at hand.

Wealth,

like the quest for sustenance,

Is also such a finite and necessary resource that you crave at a social level.

Wealth translates into the acquisition of all goods and services one requires.

So its not much of a leap to comprehend that wealth translates into power.

And while I will endeavor to spare you the bulk of the psychology of it,

I will also say that women are also a focal point to the acquisition of wealth and related power…

Why is this?

Simply put: children require resources to raise.

Women must seek men with resources that will assist in the survival of the offspring.

Consider this behavioral logic to be the “base” logic, which is subject to translations into more complex or “higher” cognitive reasoning.

The logic is as follows…

Men need resources to support progeny.

Women seek men with resources, so they can support the progeny.

Men and women both also need resources to sustain themselves as individuals, until such a coupling.

In evolutionary logic, this is a “double whammy”, or so to speak.

This means the idea of acquiring wealth is driven deeper into the survival instinct, because of its detriment to two aspects of survival.

You will find, the more essential the need is to surviving, the stronger the urge to acquire or… reject it.

The ultimate being: The fear of death.

(drama)

Thus why you are so afraid of it.

Thus why women feel terror as their children are threatened, and seem to run fearlessly to help.

And thus why men often stop being afraid in the light of such circumstance.

But I digress

The problem, when it comes to evolutionary psychology and the human mind,

Is that humans have succeed in developing incredibly vague instincts at certain levels above the most essential behaviors.

At bottom you have your autonomic functions.

Just higher you have partially control, like holding your breath, until your body needs air too much to allow you to do it any longer.

Further down the list you find social integration that is dependent on different and varied behaviors that we learn at a young age.

We learn environmental factors of avoidance,

we learn language.

But neither of these things are constant.

The acquisition of wealth is one of these varied factors.

If the definition of wealth were “the amount of wood” you have stored.

Then by owning a forest youd have a lot of wealth.

You need to spend wealth to acquire essential goods,

be it trading a fur you have for some food,

or trading gold for the wood, the brick and the services of the architect to assist you in building your new home.

Now it was impossible then to have “too many” furs,

because,

simply put,

The amount of time required to go out and kill the animal in question.

However, If you had assistance getting that kill,

then its another social matter of whom that fur belongs to.

At which, you are not guaranteed it.

However, if you were exceptionally skilled with a knife and they werent…

who knows…

Because of this “finite” resource, and the need to constantly acquire it

Evolution did not make an adequate “limiter”

because no hominid would ever say

“Oh, im done… I have enough for life.”

and if they could say that,

it wasnt often enough for it to be a surviving behavior in evolutionary psychology.

Thus humans are “hungry” for wealth.

And because there is no “cutoff limiter”

because there is no “stomach” to be full,

you are always hungry.

However, there is a kind of “metabolism” in this hunger for wealth.

The analogy being, when you don’t eat too much, too often, your body slows down to conserve resources.

Thus, people with a low metabolism tend to… gain quickly around the holidays. If you know what I mean.

When a human is not used to acquiring wealth very often, they don’t expect it, and thus the craving is much less.

However, When a human is used to acquiring wealth, They become addicted.

Starving for wealth,

They withdraw like an addiction, because… it is.

Do they need all that wealth?

no.

No one needs two helicopters, or two jet planes.

They just want it, and they cant really say why, but…

They can rationalize it.

At this point (if you have been listening that is)

you understand some of the fundamental basics intrinsic to the psychology of wealth acquisition or “greed”

Now onto the economy.

This will go much faster.

The economy maintains balance by having an equal value of goods to services,

These resources grow with the amount of raw resources gathered, until consumed.

Consumable resources offset the services aspect of the economic exchange.

Because the services rendered in themselves cost consumable resources like “food”

Beyond that, the wealth acquired from services rendered also translate into goods for personal survival.

Thus the formula is roughly as follows.

Raw resources (Depend) on services to acquire.

Raw resource value is equal to the useful resource value (-) services required to turn resource into useful “resources”

Useful resource value(goods) = Raw resource value + services rendered.

At this point, useful resource value is greater than the “raw” value, because it has been inflated by the services cost.

To offset this in an economy,

that “extra” wealth acquired by the individuals service will now be traded to someone for goods.

In the case of a raw resource gatherer, their service cost is also the raw resource cost.

So is a 100% translation of resources, and they can sell their service as “goods”

and there is no “inflation” to be re-translated to balance the economic state.

Those that take the raw resource, will shape it into goods, which they will sell at the cost of what they paid + a variable of services rendered.

This results in a profit equal to the services rendered.

In the categorical range of “high-end” goods, being those that are more difficult or time consuming, less will be produced, and cost more.

At the “low-end”,

more will be made, and thus, they will cost less.

Certain foods are easily acquired, and thus cost less while others are more rare and cost more.

Essential goods to survival, tend to be in high demand, and thus there tends to be a greater population involved in its acquisition; so… it becomes a reasonable cost.

Ok?…

Now then… If you were to draw this out and imagine a thousand people in a society, You would see there is a fixed value of Raw resource costs that are proportional to the population. And you would see a variable “service” cost, that is dependent on current demands.

If there are not enough people to supply it, thus there are not enough supplies.

Because there are not enough supplies,

demand is higher and people will pay more wealth to acquire it.

This is the law of supply and demand.

This level of demand is equal to how essential it is.

In the case of a food shortage, for example…

Well food is important. Without food, you will die. So you will pay more.

If you are able to acquire food, you will store it. Just like your body does with fats, your mind does it with supplies.

And because supplies are one form of wealth, Your brain is trained to store “wealth” or to “save” if you are unable to acquire it easily.

Now you understand the basics of economy. Enough to understand the next bit.

The wealthy vs the poor.

Economies are frequently offset but the rich, because they have the money and resources to acquire a greater sum of raw resources.

As well as to employ the craftsman in question.

This results in a range of mild to total monopolization’s.

The result of such monopolies, is the inflation of the laws of supply and demand.

If there are no competitors for the acquisition of raw resources, then that cost will vary solely to the necessity, and not the base resource cost.

So in order to create an effective monopoly, you must choose to control a resource that is very important to survival.

Thus, The balanced pool of raw resource value and the balance resource pool of services value as they are combined, and measured in total as currency: (In this case a fixed amount of “gold”), the inflation will heavily favor one side of the equation; The rich.

And the poor, how do they sell their services to other poor people? They can barely afford the food.

What services or raw goods can the poor people sell to the rich? What do they need?

The result is the poor will be forced to either adapt to utilize other raw resources to survive,

or, if the hardship becomes too great, then over time the people will begin to develop a growing dislike for the rich. Because they “need” to acquire the resources, the wealth to survive.

They will begin to… covet… their neighbors goods.

And perhaps “steal” them.

Because they are so hungry.

(Pop Quiz: can you think of a way to forbid and enforce a law so people wont steal, or covet other peoples belongings even when you’re not there?)

At this point, they will revolt. And overthrow the rich “kings” “aristocrats” and etc…

now you have a basic understanding of how the economy works as it relates to the social classes, in the rich vs poor scenario. Now on to modern days.

PAY ATTENTION: this is the cool shit!

The “gold standard” was fully in effect in the united states until its steep transitional abolition just after the great depression.

The depression happened, largely because of our great new invention “Credit”

And its mandatory counterpart “Debt”

Which is essentially fake money.

“Credit” and “debt” dont just inflate the value of raw and service, they add a value thats nowhere to be found.

It must balance.

In order to balance, money must be taken out of the pool and filled into it

(like a vacuum)

And when this vacuum pressure became too great,

Because of the pressure for various things that required direct transactions of money.

The vacuum overwhelmed the banks at the time and it all snapped back like a rubber band.

And those banks called in all loans on the spot, and people could not afford to pay them back yet.

Mind you the “gold” standard of currency was supposed to total the wealth sum of raw resource and services rendered.

And In order to solve that problem, physical gold was taken out of the system allowing for “phantom monetary transactions” to occur in the form of mass inter-monopoly exchange.

The more transactions you can perform back and forth in monopolies, the more they can say

“hey, can I borrow 5$”

“sure, you can.”

and it can go on endlessly without anyone noticing. But the money must still exist somewhere or people wont get paid.

How do you solve that bit?

Print new money 🙂

Now you have a physical representation of the economic pool that doesn’t actually exist.

This is true inflation.

This is the result of Greed

The uncontrolled addiction to the acquisition of wealth as it has been inherited through evolution.

That which once assisted our survival, now in the world of industry is causing our suffocation.

The way to defend against this, is by regulation using the government.

Free capitalism (within reason) can be offset removing the cost of the poors survival expenses via “Taxation”

high taxes on the rich would also provide government jobs, or “community” jobs. Because there are many services people could do that would help a society to thrive. Being independent of private sectors prevents any monopolies and severely limits the “minimization” effects which private businesses deploy in order to turn over a greater profit, as the by product of greed which I have explained.

Tax the rich much higher, and that money will go back into the majority or “middle” class.

This money would fund many services essential to survival and to thriving as a society, and because they wouldn’t have to take it our of their individual pockets… They would have more of the little money they make to save for anything they “want”

Im sure you could come up with other reasons.

Finally:

individuals will gain a small percent of the total wealth that an organization or corporation they own or run. The more wealthy the whole organization, the bigger that percentage is.

Thus, it is in the best interest of the rich, to pay less taxes… and gain more business.

In order to facilitate this, they must prevent any laws or actions that would interfere with the business agenda.

This is why we have so many means of battery power,

But because of current implementations of fossil fuels, and business obligations within,

Electric cars are not a priority.

When we go to war → defense contractors make money.

When we come to peace → defense contractors lose money.

When diseases are discovered → medical gains money.

When diseases are cured → pharmaceutical corporations lose money.

Thus “treatments” are the best business.

Combating things like this from being manipulated, involves the establishment and funding of a government.

If a government is underfunded → they cannot enforce it.

If they cannot enforce it → companies get away with stuff.

If they get away with too much stuff → People notice and get mad (and they become poor)

So in order to facilitate a business agenda, they must find a reason to get people to go along with them.

Speculation

The solution is an appeal to emotion and morality.

If you act in the name of god, then people will instantly think you are the good guy.

If you fight against something immoral → People will assume you’re a hero and overlook anything that requires more thought.

(pop quiz: Can you think of a way to get poor people to hate being poor less, to stop stealing your things, to stop wanting your things, to disregard the rich, and to share their food like a loaf to an army?)

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