Wallace wrote:...my own birthplace in Kirkcaldy...
Once upon a time; I played Ducks and Drakes; on Wemyss Bay; from the docks of Methil town.
I distinctly remember the cold and rainy day I first saw Adam's statue in the Kirkcaldy town centre, being too young to know otherwise, I wondered who he was; another irony.
Meanwhile...I've corrected a logic error in my original post. I forgot that sometimes more is less, and vice-versa.
Wallace wrote:The quotation, as I understand it, defines the GNP of a nation and how it benefits the people within.
I tend not to take the word nation too literally nowadays, as I suspect today's world may be too complex for that idea to readily translate into a beneficial result.
Wallace wrote:It doesn't, however, go into the specifics of why people in the nation cooperate with each other to produce the GDP. Therein lies the theory of money.
I don't agree...
Adam Smith wrote:...those who are to consume it...
ISTM therein lies the [contemporary] theory of money (and economics):
During the Industrial Revolution economics were focused on defining and improving production in order to better equip the nation state for war. The application of Adam's theories as a tool, were successfully used by the British to defeat Napoleon.
Contemporary economics are focused on defining and improving consumption in order to avoid war. The hope of nuclear armed governments is that gradually economic activity will become a substitute for conflict. To be successful the end-state in this transformational idea has to be global, and result in greater equality of consumption, both within and between nation states.
Money is the medium we are gradually learning to use in order to increase cooperation within and between nations. The US has spent trillions over the past two decades convincing the Chinese to cooperate, successfully IMO. In the late 1980s the British government stopped throwing troops at Ulster, and started throwing money instead. Very soon a point arrived, when the people had become used to the pleasure and certainty of consuming, they (both Protestant and Catholic) then realized they had more to lose from a continuation of the troubles than they ever had to gain.
What's at stake within this transformational idea is...well, everything...which, methinks, is the real reason Greenspan was so ashen during his testimony to congress yesterday. He understands better than most that the survival of the many has been threatened by the greed and hubris of the few; during his watch. The real danger inherent in the current economic meltdown is not a recession, global or otherwise, it is the eventual failure of this idea; a failure that may eventually propel us into a war that involves nuclear weapons.
IMO these are the 'true "fundamentals" in [contemporary] economic theory' your original post seeks to explain.
Why people cooperate with each other to do mutually-advantageous things may not be different from why animals do the same. For example, look at this website
that shows cooperative behaviour among ants. Play with it for a while and then imagine that it is a human society where each person is exchanging a $20 bill with his neighbour. Look familiar?
Interesting, in other words ants dance to a collective ant rhythm...the more ants dancing the more apparent the harmony of the rhythm.
Perhaps the critical question is what motivates an ant to switch from an inactive state to an active state, when all the other ants are in the inactive state? Put another way what is the source music to which the ants appear to dance?
BTW likening the global economy to the behaviour of ants may not be dissimilar to likening the global economy to the global climate.
Wallace wrote:In the end, our lives are all about relationships. Money is only money.
I sincerely believe our lives are all about what Maslow said they are all about. If they are all about relationships, they are neither about survival or self-actualization. If they are not about survival or self-actualization, they probably about relationships.
ISTM most people nowadays have a far more complex relationship with money then they do with each other.
My turn to take the tablets