Money is stored work

Money is stored work. Probably Marx was the first person in recent times to notice it. However that was in the mid 19th century before rampant inflation took hold of our economies.

Inflation is rising prices where too much money chases too few goods. Prices rise when there are more pounds or dollars than goods and there is a shortage of goods. Scarcity economics. When there are plenty of goods, prices drop.

In Zimbabwe, a real life laboratory of inflation, the shelves are empty. When there is only one loaf of bread, it goes to the highest bidder. If only two people able to bid, the rest starve. Prices rise because there are not enough goods and the government is printing dollars. If there were lots of food on the shelves, food would have to sell more cheaply or not sell. Shopkeepers pitch their prices high, because they can and because there are food shortages.

Deflation, falling prices, too little money chases too many goods. The price of goods falls. IT costs are deflationary. A new well appointed computer costs under a thousand pounds. In 1976, my first double floppy disc drive cost £940. Nowadays there are too many computers and too little money for them, most people can only use one computer at once. Similarly, in the High Street, too many clothes chase too few buyers. Despite the Sales, the High Street stores overstocked because they thought wholesale prices were too good to miss. They bought everything on credit, and now the price is dropping.

In the UK there are also areas of inflation - for example food and fuel. We may be able to live with an extra set of clothes, but we cannot live without food and fuel. There is not enough food and fuel on the market to lower prices. For people who can afford neither computers, clothes, nor food or fuel. Life is tough.

People charge what they can get away with. Where there is plenty of competition and plenty of goods, the price is close to the cost of production, or what the goods cost to make. Where there is a monopoly, a shortage of goods and plenty of money, the price becomes speculative and reaches what the shopkeeper thinks he or she can get away with charging.

How to get out of this spiral? These are the principles of a good citizen of MatrixEconomics.

Principles of good citizenship

Tell the truth and obey the law where it does not oppress another human being or animal
Pay as little tax as legally possible
Work and provide for yourselves, your family and your friends
Stay healthy
Be self sufficient
Do not use credit - ever, unless you are starving or homeless
Owing money is the first step to twenty first century slavery



Copyright Dr Liz Miller 2008