Wealth, Virtual Wealth and Debt

This world famous pioneer of atomic power turns his scientific mind to the solution of the economic paradox.

Wealth, Virtual Wealth and Debt

Excerpt:

Chapter XI
The Riddle of the Sphinx

A Symbolism for representing Economic Transactions.

We have gradually drawn in the threads of our analysis of the nature of money and wealth to the point where it is necessary to try to obtain a mental picture of the economic system as a whole and how it works. What is now required is a simple and informative symbolism or shorthand to represent sufficiently accurately the industrial system and the chief economic processes of production, exchange, and consumption.

Those unfamiliar with the mathematical sciences may be unaware how powerful a weapon of research a correct and informative symbolism is. With regard to the simple operations of arithmetic, without our systems of figuring, a life-time's study would hardly be too much. Before the days of the Arabic numerals-which were really invented by the Hindus-with its system of nine figures and a zero, the operations of multiplication and division used to be performed by an elaborate system of empirical rules upon a calculating frame known as the "abacus." The most proficient professional calculators after a life-time at the work could not attain to the standard reached under the modern system by a school-boy or girl of ten. Something of the same state of things applies in economics.

For lack of simple means of expressing the operations of industry and commerce, chiefly so as to keep on record the totality of the important facts, during the changes of ownership of which they essentially consist , even elementary consequences, such as arise, for example, from the continuous circulation of money, are apt to be unforeseen until they occur. The difficulty is not reduced but rather increased by the fact that almost everyone knows and understands one aspect of the system quite thoroughly. It is necessary rather to see the whole at one glance. The first step is to represent the changes of ownership that occur in barter. This may be done as shown in Fig. 2. Thick broken lines are used to indicate the flow of wealth with arrow pointing from production to consumption. Barter would then be represented as in the figure, where two such streams of wealth are shown meeting at a mart, A, in which the individual owner of one kind of wealth detaches himself from it and attaches himself to the other kind of wealth. The paths of the owners arriving at the mart with one kind and going off with another kind of wealth are thus shown by thin lines beside the streams of wealth.