Part 1 The Machinery of Civilisation: Wealth, Money and Exchange 9
1 What Do We Mean by Wealth and Money? 10
2 The Most Fundamental Element of Economics - the Transaction 15
3 The Source of Civilisation - Surplus Wealth, Specialisation and Trade. 22
5 Ethical and Social Considerations 31
7 Good and Bad Wealth Creation and Use 38
7.1 The dangerous growth fixation 45
8 Requirements for Wealth Creation 48
9 The Natural Tendency for Wealth to Accumulate 50
10 Characteristics of Money 56
12 How Much Money Does an Economy Need? 62
13 A Fixed Money Supply in the Simple Three-Person Economy 64
14 Money in the Real Economy 67
15 The Effect of Too Little Money - Preliminary Discussion 71
16
The Effect of Too Little Money - How the Situation Plays Out in
the Real Economy 74
17 The Effect of Additional Money in a Depressed Economy 79
18 The Effect of Too Much Money 81
20 The Great Trickle-Down Deception and its Implications 85
20.1 How the trickle-down fantasy is supposed to work 86
20.3 The impact on employment and national income shares 89
20.4 What do the wealthy spend their money on? 93
20.5 What do the non-wealthy spend their money on? 97
21 Lessons to be Drawn from the Foregoing Money Supply Analysis. 99
22 Waste, What it Is and What it Isn't 101
23 Transactions that Help the Economy and Transactions that Don't. 106
24
The Economic Impact of Money Spent on New Wealth and on
Existing Assets 112
25 The Puzzle of Investment and Saving 116
26 Measuring Economic Performance 120
27
Shortcomings of Gross Domestic Product as a Measure of
Wealth Creation 128
28 Markets, Supply and Demand 132
28.2 An unfettered free market 135
29 Unfettered Free Markets and Fair Markets 137
30 Which Markets Should be State-Controlled, and to What Extent?. 146
30.2
Condition 2 - All relevant product information is accurate and
freely available: 147
30.3 Condition 3 - Products can do no or limited harm to buyers: 148
31 The Pharmaceutical Industry 150
32 Rationed Markets, Efficiency, Competition and Incentives 154
33 Asset Bubbles and their Collapse - Induced Market Rationing 159
34 Dependencies between Buyers and Sellers. 161
Part
2 Wealth Extraction: Banking, Financial Trading and Other
Extracting Sectors 169
36.1 Wealth extraction misinterpreted as production 174
37 Banking and Financial Trading 175
Part 2a Money Magic: Banking 179
38 A Brief History of Banking 180
39 Modern Banking - Creation of Money and Debt 182
39.1 Banks don't lend money 186
39.2 Just what is this stuff called bank money? 188
40 The Contradictions of Modern Banking 192
41 The Bank of England (BoE) 194
42 If Banks Can Create Money How Can They Go Broke? 196
44 Transactions, and their Effect on Bank Balance Sheets. 202
45 Why Can't Banks be Allowed to Fail like any Other Business? 210
46 If
Banks Are So Profitable and Protected Why Don't We Start
Our Own Bank? 213
47 What is it that Makes Banks Different from Other Companies? 217
48 Who really does the lending when banks 'lend' money? 220
48.2 What is it that banks are not entitled to? 224
48.3 But what about inflation or deflation? 225
48.6 Can we turn the lessons learned here to much better use? 227
49 What is the Bank's Service and How Much is it Worth? 230
50 The Moral Hazard at the Heart of Banking and the Damage it Causes. 232
51 The Rate of Interest and its Effect on the Economy 241
52 The Bank Lending Market and the Business Cycle 244
52.2 Positive feedback and instability 247
53 Debts, Constructive and Destructive 249
53.1 The increasing debt spiral. 252
53.2 Taking control of individual private debts. 253
54
The Role Played by Destructive Debts in the Run-Up to the 2008
Crash 255
54.1 The investors who wanted to own the debts: 256
54.2 Those who made the debts available to investors: 257
54.3 The borrowers who funded everything: 261
54.4 The inevitable crash happened - and came as a complete surprise. 266
55.1 Nationalise the banks? 270
55.2 Abolish pretend money? 270
Part 2b Asset Juggling: Financial Trading 273
56 The Evolution of Modern Trading 274
57 Financial Asset Markets 276
58 Pooled Investment Funds 280
59 Wealth Extraction by Fund Providers, Managers and Others 284
60 How Can Wealth Extraction be Eliminated from Financial Trading?. 288
61 Speculation and Investment 291
61.1 Discouraging speculation 294
Part 3 Globalisation: the Good, the Bad and the Very Ugly 297
64 A Brief History of World Trade 305
65.1 Advantages and disadvantages: 307
65.2 Totality of world trade: 308
65.5 Excess imports and borrowing: 308
65.6 Types of currency exchange: 310
65.8 Self-correcting imbalances: 311
65.9 Domestic and international prices: 312
66 International Trade Theory 315
67 Major Developments in International Trade 319
67.1 Prior to the Bretton Woods (1944) agreement 319
67.2 The Bretton Woods proposals and agreement 319
67.2.1 The miraculous power of gifts 325