THE UNIVERSAL ECONOMY UNIT VI: WEALTH = (MATTER + ENERGY) X KNOWLEDGE
It is the laws of physics, and how well we understand and apply them, that determine the tangible, usable wealth of humanity. Money is but an aid or, at times, obstruction in the production and distribution of wealth. This is rarely understood by the world’s politicians who, all too often, are elected – and directed – by the self-serving interests of financial manipulators.
An expanded definition of wealth seems in order:
Wealth = (Matter + Energy) X Knowledge
We know there are iron, aluminum, nickel, copper and chromium ores and coal deposits on Earth. In and of themselves they are useless in supporting human life. They are simply matter and, when coal is burned, energy. When multiplied by human knowledge however, they become the stove in our kitchen, the washer and dryer in our laundry room, the chassis, engine and drive train in our car. This tangibly supports human life (obviously we need to switch from coal and oil to alternative energies) and is true wealth. Wealth is whatever physically supports human life without harming the environment or creating ecological problems. Money is but grease – or sand – in the gears.
Another example is silicon, chemical element #14 and the second most abundant substance on Earth. It is in sand. By itself it is of little use to humans. However, silicon combined with a few other chemical elements and multiplied by vast amounts of human knowledge becomes photoelectric cells and a source of electricity harvested directly from the non-polluting light of the Sun. Truly life supporting wealth.
A short 150 years ago it took weeks for the President of the United States to send a message to the King of England or the leaders of France, Spain or elsewhere. It took weeks more to receive a reply. The communication was delivered by square rigged sailing ship. All of the chemical elements needed to build a cell phone and its geostationary orbiting satellite support system were present on planet Earth at that time. But it would require the almost unimaginable growth in human knowledge over those intervening 150 years to place that cell phone in the hands of billions of humans and allow them to speak almost instantaneously to any other human anywhere on Earth.
There are, of course, endless examples of wealth production, especially when one considers agricultural, climatic, oceanic and other fields of knowledge in the application of matter and energy. But from the synthetic clothing we wear, to the food we eat, to the transportation we ride in, to the cell phones we text on, to the computers we surf the internet on, to the dwellings we live in, all of it depends on the equation . . . Wealth = (Matter + Energy) X Knowledge. In these terms, we can begin to comprehend – wealth is virtually unlimited as human knowledge grows. It should never be limited by the artificially imposed scarcity of man-made “money,” or the grossly unequal distribution of that “money” into the hands of an oligarchic few.
It is here where the monetary ignorance and flawed moral ideologies of politicians, coupled with the greed and power lust of the super wealthy who purchase these politicians, create such unnecessary havoc for humanity. This is especially so in sovereign nations utilizing sovereign fiat monetary systems that can never “run out of money.” It is this ignorance and flawed ideological thinking, this greed and power lust that give us the insanity of “debt ceilings,” “austerity measures,” and “privatization” of all things public serving the common good. It is this ignorance, flawed thinking, greed and power lust that give us crumbling infrastructure in the face of all the resources needed to rebuild infrastructure, cuts to food programs for school children in the face of wasted surplus foods, refusal to fund national healthcare for all in the face of empty hospital beds, homeless children and families in the face of empty housing, surplus building supplies and idle builders, and ongoing poverty in the midst of vast, unused physical wealth.
Humanity has entered a period of great hope, yet great danger, in our evolution on planet Earth. We can choose universal success or we can choose nuclear holocaust, climatic collapse, and universal failure. We can choose to use our greatest engineering and architectural expertise, our most exquisite and advanced science, and our growing knowledge of sovereign fiat monetary systems to ensure that universal success, or we can allow monetary ignorance, flawed ideological thinking, greed and power lust to lure us into wasting this same engineering, science, and knowledge in developing endlessly more effective ways of killing one another, the continuing self-destructive use of fossil fuels, and the deliberately created divisiveness of bigotry, racism, hatred and selfishness to insure universal failure.
In the end human well-being is not limited by the laws of physics or the availability of resources. It is limited by our ability to care about one another, by our decisions to overcome the darker forces of human nature and pursue the enlightened visions of human dignity and concern for the common good. Correlating our man-made economic systems with the laws of physics is the critical path. The growing understanding of fiat monetary systems through Modern Monetary Theory is paving that path.
Unit VII will discuss: The Financial War Enslaving America
For an excellent series of short 3 to 8 minute educational videos by Professors Stephanie Kelton, Randall Wray and Bill Mitchell, and financial analyst Warren Mosler on the functioning of sovereign fiat money in a sovereign nation please see: DEFICIT OWL // THE “INTRO TO MODERN MONEY THEORY” PLAYLIST