posted on Jun, 15 2014 @ 02:36 PM
Capitalism requires perpetual exponential growth of the money supply or it enters a contraction spiral.
People who clamor for a static money supply actually, unbeknownst to them, are wishing to hasten its demise or complete decay back into feudalism.
You see, except for banks, every business out there, in its direct financial dealings with human beings, necessarily takes more money directly from
people than it pays out directly back out to people.
The difference being the business's operating expenses towards other businesses (non-human economic agents).
The pizza parlor takes more money in from customers than it pays directly out to its employees, its landlord, its stock holders, its management
The anchovy factory that supplies the pizza parlor takes more money in from the pizza parlor than it directly pays back out to its own employees,
owners, management, landlord etc.
All businesses are like this, taking more money in than they directly pay out to people. Because all businesses also have running expenses towards
other businesses. Their suppliers, subcontractors etc.
This financial shortfall has to be continuously created out of nothing at an ever increasing rate. And it is, by the banking-monetary-financial
Or else the people, as a whole, will eventually run out of money to spend. And the economy will collapse.
Of course, you could claim that there is an infinite regression, an infinite length supply chain a la Zeno's paradoxes. However, there is no such
thing as an infinite length supply / logistics chain.
The alternative is to claim that the entire economy is actually one huge, closed loop. One huge, closed supply chain.
This is actually correct.
However, because at each and every single iteration of this huge, aggregate loop we have a higher total / aggregate price for the entire / aggregate
economic production realized during that cycle, we soon reach a moment when more money has to be shifted in one single iteration of the loop for the
loop to complete the cycle and begin anew is actually larger than the money supply.
So we arrived at the initial hypothesis you might have wanted to disprove. Only it's now clearly not a hypothesis but a conclusion.