and goes out to buy a new car. The car dealer, selling more cars than usual, may purchase a 24 TV. The TV dealer, unexpectedly enriched with a an extra $200 in profits will impress his girl friend with an expensive dinner. And their waiter, enriched by the unexpected $20 tip, will buy that CD he s been wanting. And so it goes until the money reaches someone fearful, someone pessimistic, someone prudent who prefers to save rather than spend. Then, when the money is pulled out of circulation, no further economic activity or profits are possible, and the spending cycle ends. If this scenario reflects reality, a community s standard of living is less a function of total physical monetary wealth than the rate of economic activity the speed of money. For example, the standard of living in a community that has a total of $1 million in cash, zipping from hand to hand, making more profits is far greater than the standard of living in another community that s otherwise identical except that the $1 million is hoarded in a strongbox buried in a dungeon by a single rich man. The first community could be prosperous while the second (including the rich man) might be economically depressed and almost lifeless.
The root of all evil?
If the idea that savings may be a disability seems new and unlikely, note that even the Old Testament hints at the adverse effect of savings. For example, The King James version of Proverbs 11:2426 reads, There is that scattereth, and yet increaseth; and there is that withholdeth more than is meet, but it tendeth to poverty. The liberal soul shall be made fat: and he that watereth shall be watered also himself. He that withholdeth corn, the people shall curse him: but blessing shall be upon the head of him that selleth it. This passage means that there are those who scatter their wealth (spend freely) and yet become prosperous. And there are others who withholdeth their wealth (save their corn or money) and therefore tend toward poverty.1 And remember the parable of the talents ? The master gives five talents to one servant, two to another and one to a third. The servant given five used the money to earn five more; the servant given two earned two more; the servant given one buried it in the ground lest it be lost. Guess who was punished? The servant who buried (saved) his single talent. The master took his single talent and gave it to the servant who already had ten talents. And then (according to Matthew 25:30) they threw that worthless servant [the one who merely saved the master s money] outside, into the darkness, where there will be weeping and gnashing of teeth. Taken literally, that seems like a pretty stiff penalty for simply saving a little money. After all, that lowly servant didn t steal the
THE NATURE OF MONEY
www.antishyster.com
225