The (simple) whole story of money, growth and nature

The whole story of growth and money. The players in a simple resource using natural trade economy.


Whole Story

As in a four person market economy, shown with two resource providing and two resource consuming trades, people create wealth by exchanging complementary goods in exchange for money. Growth comes as each learns how to do things better and the resources hold out. For price stability the banker prints money to keep up with growth.

The banker also provides safe keeping for the money saved by people with more than they presently need, and gives it out in exchange for a promise of money growth in return.

At the limits of the earth that tells people to make money taking big risks to avoid limits, when that’s more of what’s left with high returns, so to avoid being responsible for growing risks, people with savings should just spend their returns instead of expecting them to multiply. It’s the natural thing to do to make peace with limits.


“The Catch”, why you read nature’s models

My friend George posted a good article on modeling the approaching decline of energy returns on energy invested in the earth (EROI), and I mentioned “the Catch”.

One of the difficulties with complex theoretical models is that they all need to assume the parts are following rules.

How economies work, of course, is with ”animate learning-bots” (that’s “us”), all exploring the world and discovering new relationships all the time. That’s why I tend to take the limiting conditions nature displays as a guide, based on her own synthesis of the whole process (like the switch from multiplying to diminishing returns on the success of the search for stuff). Continue reading “The Catch”, why you read nature’s models