Re: How is wealth created?


Ckwop wrote:
> Hello there,
>
> I hear on the news at least once a year that the world economy is
> growing by x%, which in my layperson understanding, means the the world
> got wealthier this year. How is this possible?
>
> To facilitate discussion, let me create a simple example. Suppose we
> have 6,000 person nation detached from society and we give each of them
> 100 credits to use as a universal currency. This money can't be created
> or destroyed, it can only collect in one person's pockets at the
> expense of another person. To me this seems like a zero sum game! How
> can the whole society get richer with a fixed amount of money?
>
> If the value of the money simply changed under this system, then I'm
> left with a bigger sense of befuddlement because how do we measure the
> intrinsic wealth of our fictious nation? I have no idea how this is
> possible and would love to know how real world economists work this
> stuff out.
>
> Simon.

Wealth comes from having things. If I have stuff, I'm wealthy. The only
way to get stuff I want, is to first make stuff that others want, then
trade with them. Money is simply an easy way of doing this trade;
barter is too complicated. Money is only a symbolic representation of
the value of the stuff. Money is NOT fixed. As more stuff is
manufactured and traded, the central bank will mint more money, so
people can trade. As technology progresses, productivity increases, so
we make more stuff faster. That's how economies grow. Can't put it in
simpler terms.

.

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