Where does money come from ?

[thenondualtankie]

21 hours ago, Leo Gura said:

Fundamentally money comes from labor. But there's a lot of theft going on.

LMFAO

we love a bit of Karl Marx

[Bobby_2021]

5 hours ago, Israfil said:

Learning shit is also labor. Is intellectual labor

If you can accept that thinking is also labour then we can agree.

But that would also mean that some people are simply valuable by birth since they have talent and creativity that would make them better than others. I wouldn't associate inherent value to human beings different from each other. 

[Girzo]

9 hours ago, Bobby_2021 said:

Yes. Money can be thought of as debt. Debt you take from the future.

It's a promise that you will add x amount of value to the economy. And the economy is placing a bet on you to deliver that value. 

You are misunderstanding the situation.

it is not thought as debt. Literally by taking a loan new money is created. Numbers added to economy that didn’t exist before.

no-one places a bet here. It is known that the economy will grow whatever that person does with the money. Because the economy has a constant influx of new natural resources into it. And someone needs to be able to buy it. The bank gives you as much as they expect you to be able to earn based on what you are already earning and your credentials. So no taking a bet here either.

[Bobby_2021]

16 minutes ago, Girzo said:

You are misunderstanding the situation.

it is not thought as debt. Literally by taking a loan new money is created. Numbers added to economy that didn’t exist before.

no-one places a bet here. It is known that the economy will grow whatever that person does with the money. Because the economy has a constant influx of new natural resources into it. And someone needs to be able to buy it. The bank gives you as much as they expect you to be able to earn based on what you are already earning and your credentials. So no taking a bet here either.

Good. now think more of the situation from here. It may get slightly complicated. 

Two things can happen as a result of taking loan.

Either you can pay back the money with interest.

OR

you won't pay back the money in it's entirety. 

If you do not pay back the money, the result is inflation. Which means that the "money" added to the economy will reduce the value of money itself in the economy. So what's being added to the economy by giving out a loan is just paper. Not actual value. 

And of course, you can get a printer and pump as much money you want into the economy. Which is essentially what taking a loan is. Society and the banks is betting on you to deliver.

If you want to take a loan for a shitty business idea, they will not give you a loan because it is a risky bet for them.

Students for stem degrees get a loan because banks know that they will pay them back with interest. You can pay them back with interest only if you deliver X amount of value, to the economy. 

Failing to deliver that is inflation.

Money printing (loans) will result in inflation, unless that value is not added to the economy. 

Inflation is literally absolute prices of good rising, since there is more absolute money in the economy without an equivalent amount of value that was added to it.

In other words, society will have to pay your loans, in case you did not pay. Society pays for failed bets in the form of inflation.

[Bobby_2021]

Fundamentally money is value and value is abstract and not physical. It's emotional.

In real terms, money is debt or promise or loans or bet.

If you are lending money, you are betting.

If you are taking a debt, you are promising. 

Betting that value will be added in economy or promising that value will be added in the economy.

Money can be added in society only by delivering value. (And printing papers, at the cost of inflation).

Money is like mathematics. An abstract representation of value. Just like numbers are not physical objects, money is also not a physical objects. Money is purely numbers backed by nothing but trust. 

Massive addition of value is deflationary, like AI, while massive destruction of value is inflationary. 

Edited July 14, 2023 by Bobby_2021

[Israfil]

9 hours ago, Bobby_2021 said:

If you can accept that thinking is also labour then we can agree.

But that would also mean that some people are simply valuable by birth since they have talent and creativity that would make them better than others. I wouldn't associate inherent value to human beings different from each other. 

Value comes from the exercise of that creativity and talent. A master musician that plays at home adds less value than a mediocre one that plays for 100 people.

[Bobby_2021]

50 minutes ago, Israfil said:

Value comes from the exercise of that creativity and talent. A master musician that plays at home adds less value than a mediocre one that plays for 100 people.

He simply made a decision to play at home instead of Playing infront of 100 people. The physical and mental labour, creativity and talent involved in both scenarios was the same. You can even assume that they guy playing at home had more talent and creativity that choose to play infront of 100 people.

That's why the *decisions* to invest labour is what makes all the difference. Not labour itself.

Labour do not generate value. Labour itself has some inherent value.

Value generation is basically betting or investing value that already existed. Decision to allocate that value makes all the difference.