Money or wealth
ALLAH MORAD SEIF
For a nation, the greatest economic success would be to increase its national wealth in a long-term trend. What can promote the real prosperity of a nation is the production of wealth, and that can be a fundamental way of solving economic problems such as inflation or stagnation. In the cycle of wealth generation in the national economy, consumers, with their own consumption in a complex interaction with producers, provide the basis for production and employment, and thus generate more revenue for themselves. By equipping the production factors, manufacturers also meet the needs of consumers by producing the goods and services they are asking for. In this way, the cycle of production and circulation of wealth, prosperity and economic prosperity results.
Perhaps we have noticed that wealth is not “money”. Wealth, automobiles, clothing, home appliances, residential homes and all kinds of services we enjoy. In fact, the wealth is what, if produced, is the kind of human being willing to take money into it. But “money” is not a fortune. Money (also in our era where credit is common) is created by governments and the banking system, and this money can be created without any rules. If the government and our banking system decide to double the size of our country’s money, it is clear that in this case, our actual goods and services are not necessarily doubled, and the welfare that results from the use of wealth has not increased.
What has been said here can be made more complete if we consider that the economy consists of two real and monetary segments. In the real sector, the equipping of the factors of production leads to the production of goods and services, and these goods and services will be demanded and used by consumers. In contrast to consumers (the so-called household sector), the services provide manufacturers with the necessary factors for the production of economic enterprises (such as their labor and capital). In the money section, but the story is something else. Governments, as well as the banking system, can pump money into the economy by creating enough money, in proportion to the real needs, in which case the real and monetary balance will collapse and the result will simply be inflationary. Was. If the creation of money and liquidity is less than the required amount of the real sector, the result is a stagnation, which will be interpreted in the first place by the inflation of goods and services. In short, in a macroeconomic, the proportion between the monetary and real sectors is very important.
If money is only an intermediary for real exchanges in the economy, then what should not be forgotten is the golden inscription: “Creation of wealth” is important, not “money creation”. This simple sentence is easily ignored in the individual behavior of individuals in a nation as well as in macroeconomic policies of governments. Individual behavior may be more convenient for a person to desire. However, if it succeeds, it can achieve more goods and services, but if everyone does this, the result will be something else. Just like someone in the movie theater, getting up from his own place wants to watch the film better, if everyone does this, then such a result will not be achieved. Therefore, work culture and wealth generation are very important in the behavior of micro economic units. For governments, the same is true. Governments easily ignore (and perhaps even devise) the Golden Sense. The underlying reason is that governments, in order to gain popularity, want to meet the expectations that they have raised during the election. This requires money, and the money printing mechanism is also available to the government. Therefore, governments are pushing for more money by printing more money. This, in the words of John Maynard Keynes, the English economist, in his letter to Roosevelt, “seems to be like becoming more obese by opening someone more.” What has happened to us in the Iranian economy (that is, the growth of liquidity of more than ten times the real production growth) is the result of disregard for the golden term, and the result is the issues that we are seeing these days. The law and the divine tradition are such that it will not be for human beings except what they are trying to achieve