I want to tell you something strange that happened to me last summer. I was sitting on the deck of my house, reading and enjoying the last rays of sunlight, when a little green man landed next to me in his flying machine.
“Hello”, I said, “Where are you from?”
“I’m from a place you Earthians call Mars.”
“Really! What do you think of our planet?”
“Well... I wouldn’t want to offend you, but I think you are quite backward.”
What!? Why would you think such a thing?
“Well, I had a look at some of your beaches... plastic bags all over, but that wasn’t the worst, worse was the human waste that came out of the sewage systems... phew! The stench! I had to keep my nose pinched. Then I went to one of your cities and landed on an overpass so I could see your world in action. But I didn’t stay there long... dangerous! One big chunk of concrete broke off underneath me and I barely had time to restart my flying saucer before I would crash with it.”
“I know... I know... Our infrastructures are crumbling in a lot of places, and in other places where they should exist, they don’t.”
“What’s the problem? You don’t know how to build – how to fix?”
“It’s not that... We have the best engineers and state of the art technologies as well.”
“Ah! But you don’t have enough of them, I suppose...You lack natural and human resources, right?”
I showed him (or her) the newspaper I was reading: “Look at this headline!”
“Can speak Earthian”, he said, “but can’t read it.”
“Okay! I’ll read it to you: UNEMPLOYMENT UP 2% FROM LAST MONTH. Even well qualified people can’t find work.”
“What’s the problem, then?”
“No money? What’s money?”
“What!? Don’t you have money on Mars?”
“Tell me what money is and I will tell you whether or not we have it.”
So, I explained: “Suppose the government - our rulers, that is – decide to build a water treatment plant or fix an overpass. To do this, they would go to the Bank – banks make special number symbols that have the power to move things – so they could borrow enough of those special number symbols to allow the engineers, technicians and workmen to use our natural resources and execute those projects. Those special number symbols we call money.”
“So, that’s money... What do you do with them when you’re finished?”
“You should know!” I replied, being a bit exasperated. “Since we borrowed them, as I said, the logical thing is to return them to the Bank – with some interest, of course. And before you ask, interest is what we pay back on top of the loan – for the Bank’s services and profit... you know.”
“Ha! Ha! You foolish Earthians! How do you pay back more than you got?”
“Err! Well we don’t. We just put it off. I think they call it a deficit or debt or something...”
He laughed again.
“You have something better on Mars, I suppose,” I suggested, ironically. “How do you build those machines you are flying in?”
“You wouldn’t understand even if I tried to explain, but let me simply tell you this: On Mars, it is not the number symbols, which you call money, that command the capacity to produce, but it is the capacity to produce that commands the number symbols we need for the organization, the production and the distribution of goods and services.”
Then he left with an smirk on his face.
I don’t know! What he said was so simple! Money should serve the economy and not the other way around. Maybe too simple for the sophisticated to understand!