Monday, October 27, 2008

Ayn Rand's Capatalism

The credit crunch has made me realise how little I know about the monetary system. What is the system that gives value to money? How do we protect the value of money? How does lending have an effect on money?
When I stopped and thought about how the economy works, I came to these conclusions:

  • The usefulness of money increases when it passes through many hands (equivalent to sharing), stimulating the economy by stimulating trade and manufacturing. When money is passing through many hands people are interacting. People see value.
  • Money sitting in a jar isn't taking part in the building of an economy, it isn't stimulating investment or encouraging people to be productive.

It wouldn't surprise me if the credit crunch lead to more people reading Ayn Rand's, Atlas Shrugged. You can find a passage from the book here.