The Land of The Thieves - Chapter 4
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Episode 2: Zero point Two Percent of Human Population on Earth (1)
The large plane sped away from London. Now we were a stone’s throw over Myanmar’s aviation area. This non-stop flight was to Singapore.
I chuckled.
“What was your question earlier? You must be kidding. I’m a professional financial consultant, I don’t care about poverty. What I worry about is the opposite, wealth. The world is controlled by a few, the 0.2% that are too rich.”
We had finished the first glass of wine. The always smiling flight attendant had just passed by (again) and offered a second glass. I shook my head. After landing in Singapore, a connecting flight to Jakarta would be waiting. I had to hurry to the boxing club. I had an important match tonight.
“Could you explain in more detail?” the girl with the title ‘best journalist’ next to me asked.
“Yes. Imagine, when a city is full of poor people, only low-level crimes occur- robbery, drunken brawls, or petty fights. Proletarians like this are easy to handle, they are unsystematic and clearly do not have a vision and mission, they just need to be bluffed, sorted out—”
“—But imagine when a city is filled with people who are too rich and continue to greedily devour the surrounding resources. They are systematic, can pay anyone to be an extension of their hand, not afraid of anything. Really nothing can stop them but the system itself is destroying them.”
The girl frowned, seemingly unable to understand.
“You don’t understand economics?” I grinned.
The girl was not as offended as before. “I mean, not all our readers have competency in economy. A simpler illustration would help them.”
“Okay. Let’s imagine that the world is only as big as a city with a population of thousand people. Some of them become farmers, craftsmen, breeders, builders; others traders, soldiers, and all the professions and livelihoods that we know. Let’s say that for centuries they have known only bartering, fish for grain, hairdressing services for roof repair, or delicious meals in exchange for tailored clothes. Until one of the geniuses—we’ll call him Mr. Smith for example—finds money. Their primitive life immediately changes drastically, the small town’s economy moves forward. Transactions are easier to conduct… That’s the first phase of this madness.—”
“—Since money is invented, various technologies are also invented. The industrial era arrives. Sources of oil, gold, coal, tin and iron near the city began to be mined. The workforce gets increasingly productive, the calculations of production efficiency are known, and demands for the ease of financial transactions increase. Mr. Smith comes up again with the idea of setting up a bank and awes the entire town. That’s right, they need capital to accelerate the economy further. But they are skeptical, who would believe a piece of paper? Mr. Smith waves his hand. Take it easy, the bank will print each banknote with a gold reserve guarantee. One hundred dollars guarantees one gram of gold. So, the money is guaranteed to be safe. There is a protective value in the bank, and everyone must transact with money. The townspeople are even more amazed. Incredible, that’s a brilliant idea—”
“So, banks begin printing money with guaranteed reserves of gold. As a sweetener, Mr. Smith promises interest for everyone who is willing to put money in the bank. Then it starts—The rich flock to deposit their money, while those in need of money for business capital also come to the bank with a promise to pay installments plus interest. You know, one of Mr. Smith’s classic discoveries that became the modern economics basic is interest.”
I paused for a moment, nodded at the pilot of the plane who came out of the cabin and greeted the passengers kindly, chuckled, and joked with one of the little kids across from me who was worried about why the pilot had left the cockpit. “Calm down, kid, this plane has a reliable automatic system.”
“Now, the existence of money and banks paves way for the accumulation of wealth. In Year 0, the total money supply is only a hundred dollars, let’s say. In Year 10, the total money supply in the city rises to one billion dollars. How? Because that’s how the new economic system works, very sophisticated at multiplying wealth. You put hundred dollars in a bank guaranteeing the equivalent of one gram of gold, then the money is borrowed by a second person, the tailor. This second person uses it to buy the latest sewing machine from a third person, the machine maker. The machine maker has a hundred dollars now, the proceeds from selling machines. He takes the money to the bank again, saves it. So, how much money is in the bank records? Two hundred dollars.”