- Wealth is defined as the ownership and control of something of value in the eyes of other humans.
- Money is defined as something which can be exchanged between humans.
- The Speed vector of money is the rate at which the items on value pass from hand to hand to create profit. The smaller amount of time an item is held, the faster the speed and the more wealth is generated.
- Health includes Wellness (not getting sick in the first place).
- Food includes Food Production through Agro-Forestry because Forest Management is essential to managing the water cycle. To manage the water cycle efficiently one must reason in terms of a Holistic Ecosystem approach to capture, store and reuse water multiple times.
Speed is everything !
We do not manage pedestrians, bicycles and fast cars in the same manner. We do not allow pedestrians and bicycles in the middle of our fast roads.
Why do we violate this logic daily, when trying to understand our democratic economy and ecosystem, and the means for a decent living for each citizen ? Without healthy consumers there shall be no capitalism.
(A) BEFORE THE INDUSTRIAL ERA — The FOOD PRODUCTION ECONOMY
For thousands of years, and until the early 19th Century wealth was the control of Land mass.
The speed vector of Money was following the rhythms of seasons and its magnitude was in the order of 1 year.
(B) THE RISE OF THE FIRST MARKET — The INDUSTRIAL ECONOMY
At the beginning of the 19th Century, with the advent of the Industrial Era, Wealth shifted from Land to Corporate Stock, Commodities, Cash, and Debt. This shift is evident in the writings of Thomas Picketty and others.
The speed vector of money increased to about 3 months.
This period saw the appearance of the Financial markets which are the first exchange or trading platforms. We will call this the First Market Era.
It is important to note that the Food Production cost was an integral part of the First Market.
With the established view that Health and Education are considered essential Human Rights in a democracy, the cost of Health and Education became an integral part of the First Market starting in the 1970s. This cost was managed by inefficient governmental entities and soon became an out of control cost on the Economy, with resulting Social and Economic stress threatening the existence of the democracy itself.
(C) THE RISE OF THE SECOND MARKET — The FINANCIAL ECONOMY
In the early 1970’s the IBM 360 mainframe computer triggered a financial revolution by speeding up the trading capacity of the Banks.
The speed vector of financial money gradually increased to the nano-second.
The resultant explosion of financial profits that the Banks derived from trading in dematerialized instruments, step by step, pulled the Banks away from financing Industry where profits were much less.
In the early 21st Century the Banks are totally focused on the dematerialized financial markets. It is a matter of survival for the Big Global Banks moving away from Industry towards more pure Finance.
In 2018 we have 2 established mature economic markets. The Industrial Market and the, much much, bigger (in volume) financial market. The slow Industrial market is saddled with the skyrocketing cost for Health Care and Education with Governments taxing evermore the Industry which is at the same time destroying salaried jobs through automation and robots.
(D) THE RISE OF THE THIRD MARKET — Health / Education / Food ECO-SYSTEM
Health, Education and Food are considered basic Human Rights without which no democracy can exist. Yet the cost of those basic rights is increasing relentlessly because of an increasing and aging population. At the same time automation and robotization is drying up the mass of salaries paid by Industry with the resulting effect of Governments having to increase taxes non-stop.
In other words, there is not enough liquidity in the First Market economy (The Industrial Market) to cover the continuously increasing cost of Health and Education.
As we described above, the Financial Market, i.e. The Second Market, is slowly pulling away from the First Market and it is increasing continuously in size. In a natural manner the Banks have been privately funding Humanitarian projects through a multitude of Foundations and NGO’s, acting for the common good, doing what Governments are supposed to do but cannot do, because Govern-ment Agencies are inefficient and extremely slow by nature.
At the beginning of the 21st Century, the huge amount of financial liquidities (from financial super profits) directed by the Banks and Hedge Funds onto the Humanitarian Economy is already creating a new Third Market.
What remains to be done is to push the cost of Health, Education, Food Production (including clean water capture and management) out of the First Market into the Third Market. Then a small increasing part of the Financial Super Profits from the 2nd Market can be directed to Foundations operating within the Third Market.
A Second Market smoothly funding a well functioning Third Market will satisfy the consumers needed for the smooth operations of the First Market in a sort of a virtuous circle.
We should be like Christopher Columbus and dare to go beyond the horizon into the New World. On the practical side we should drive new types of Foundations to bring “Humanitarian financial dynamics” to the help of the Health and Ecosystem of our democracies.
Like Christopher Columbus we must go where no man has gone before and reach the shore of the Golden Age of Democracy right behind the horizon.
For more information please contact Dr. Michael Nesterenko on this web-site.