It is worth remembering that the royal mint prints currency entirely randomly. Nobody has any idea how much folding stuff is in circulation, but by the officially accepted figures, bank notes account for only 3% of money in the U.K. It is not prosperity and fiscal probity that averted runs on the banks long ago; it is the fact that everybody knows that the system would have run dry ten minutes into the banking day and left the tiny minority who got their money out subject to the wrath of the majority who didn't.
Unlike in a purchase, where existing entities demonstrably change hands, in the money houses, all parties leave with more than they entered with. Their wealth did not exist before the point of transaction. The poor and the struggling keep the economy ticking over through keeping the money flowing and borrowing when it runs dry. Through investing entirely in abstracts, the wealthy cause stagnation. Our economy is predicated on growth in perpetuity that always, if only just, exceeds our steadily rising demands, allowing a lot to be skimmed off by the parasitic wealthy without the rest of us responding with anything other than resigned acceptance and the occasion dubious pie-chart in the tabloids. When growth slips below a threshold considerably higher than anything imaginable today, in order to keep his own take at the level he has become accustomed to, the rentier drags his very own market economy into recession.
Nothing new here either, by the way, but it can be helpful to return to this now and again. Keynes's paradox of thrift: saving is only helpful to society as whole if only a few partake; if everybody saved as much as they could instead of spending it on what is effectively surplus production, demand would dry up and the entire merry-go-round of goods and service, production and consumption, grinds to a halt. No bad thing, some biblical armageddonists might say, but for the more grounded amongst us, functioning alternatives to market capitalism that don't involve firing squads are thin on the ground.
The irony that only the Chinese seem to be able to make it work for them and that Mao's children seem to offer our only way out of generational decline is the turd in the bidet for free market evangelists, who seem to respond to China's economic boom as if it were an aberration, a rip in the fabric. India, Brazil and Russia seem determined and destined to prove that large scale, state collectivism is not rooted to any particular political creed. European leaders recognise this, hence the desire to form a united bloc that can compete with them. In a sop to the Little Englanders in the tabloids and on his own backbenches who moved for an exit from Europe a few weeks ago, Cameron has clearly decided that splendid isolation is the way forward.
Assuming that Europe is not going to disintegrate in a wave of civil unrest and economic warfare – and it isn't always safe to assume – all we can do is turn to the political realm and pray for salvation there. Inspiration is not thick on the ground, though, not within the U.K. at any rate.
More follows......
