Money Matters – Preface

With this post, I begin blogging a book I will entitle Money Matters. When I finish, I hope that both you and I have a better understanding of money and free markets.

Economic systems operate in the context of markets. Without the exchange of goods and services that create markets, no economic system would exist. Learning about economic systems, or markets, should help us to operate more effectively within them. We don’t want to learn about markets in order to change the rules by which they function. Those” rules” have manifested from the interactions of millions of people over thousands of years. We cannot outsmart the distributed intelligence of all those individuals. We can, however, play the “game” and operate in the market more effectively, if we know the rules.

If you want to become proficient at chess, you first learn the rules of play. You then develop strategies, within those rules, for “winning” the game. The same holds true of the “game” of markets.

Most exchanges involve the use of money. Understanding markets, therefore, requires understanding the meaning of “money,” its role in markets, its source of value, its measure of value, and the operation of the banking system that handles money transactions.

In other words, Money Matters.

But, most people do not understand the most important aspects of money. You might say they are like the novice chess player who doesn’t know how to distinguish the chess pieces. Reading the rules does no good for developing a strategy. In his ignorance about a fundamental element of the game he misinterprets the rules of the game, or, worse yet, he starts making up his own rules.

If I have not stretched the chess analogy too far, I mean to convey the idea that people don’t understand markets when they don’t understand money. Because of this lack of understanding, they misinterpret the “rules” of markets. Based on their misunderstanding of markets they attempt to write new rules. Changing the rules does not improve the game. It changes it.

Free markets, unlike chess, do not have winners and losers. All free market players win.

It concerns me that, because people do not understand money, they don’t understand markets. As a result, they operate in markets by unrealistic rules that create winners and losers, instead of just winners. -For that reason, I have decided to blog a book that I will title Money Matters.

I base this book on the premise that: you cannot understand modern markets if you don’t understand money. The real focus of this book will be markets, not money. I will clear away many misunderstands about markets by refuting some of the false assumptions that people have about money and the banking system. Since money exists as an integral part of the market system, I will explain money in terms of market principles and theories. In the end, I want readers, and me, to understand markets and money in a way in which we can make them understandable to friends and acquaintances.

This book represents a work in progress. I strive for clarity and accuracy. If you have the basics of an idea, you will have the tools with which to learn the details.

Please help me, with comments and questions, to improve this book as I move along. I will respond to all comment by either:

  • editing existing posts, or writing new ones, if the comments are general, or
  • responding in the comments, if the comments are specific for you.

I will also post this preface on the About Money Matters page.


Green New Deal – 2030

Commenting on The Green New Deal would waste my time, except for the attention some influential people have given it. It would, if passed, lead to a life of misery that would make catastrophic climate change seem like a marvelous alternative.

I receive letters from strange people and strange places. Most of them, If they make reasonable comments, I respond to privately. Recently I received a letter from a rather different place: the future. Because it discusses a topic of present-day interest, I have posted it in its entirety.

Dear Jim,

Roughly 10 years have passed since the signing of the Green New Deal bill in 2020. Climate change hysteria rose to such a fever that voters elected Kamala Harris as President and Cory Booker as Vice President. The House of Representatives elevated Alexandria Ocasio-Cortez to the speaker of the House.

The rapidity with which they passed this legislation surprised many people except a few who remembered chants of,” Better off Red than dead.” I found it equally surprising how quickly they acted on the legislation. I guess people liked the Nirvana promised by the supporters.

I have nearly gotten used to having to make these entries by candlelight. I hardly remember the day before May of 2026 when we had to turn in our last smartphones. We just don’t produce enough power for recharging those devices and transmitting the messages we composed. I do have more time during the day to do my writing since I lost my job. But, I hear that pencil and paper will soon become in short supply.

Losing that job does not bother me so much, because the government sends me a check every month. I had planned, when I first heard of this change, of traveling a lot and seeing the world. I had to scuttle those plans when I found I could not get airline reservations. The airlines were not overbooked by people in my situation. They just could not fly because of the lack of fuel. You can still fly, if you need to, but you have to book your flight three months in advance, and it can cost millions of dollars-subject to increase at boarding time. That brings up the issue of inflation.

I have noticed, when I have an opportunity to walk to the store, that the prices of the few items available have increased dramatically. I get an increase in my government stipend every month, but it never seems to keep up with price increases. I have heard that price inflation amounts to 1,000% per month. I have no way to verify that because I get no regular news. I have to rely on rumor.

Someone told me that the central planners have adopted the strategies of the Modern Monetary Theorists. Having government “spend money into the economy,” according to them, will stimulate the economy. I have not seen the results yet. But, what can I do?

I would like to continue, but I have to leave to get to my Chinese language class.

The Chinese have done relatively well in the past ten years. Maybe not adopting their own “green new deal” has something to do with their progress.

Anyway, they allow a few immigrants each year, if they speak and write Chinese. I might get a job there that pays a lot more than my government stipend, or, I might get a job at one of the companies in the U.S. that the Chinese have acquired.

More later,

I hope Roger does better than this. We can change the future now, if we choose to.