Pointedstick wrote:
So, no, then.
Kshartle wrote:
Only if I have purchasing power to buy the car will it be made for me. In order for me to have the purcahsing power I have to have made something myself or stole something someone else made or convince them to give it to me. Or I can have guys with guns declare that slips of worthless paper be traded for things of real value and then beg them to print some and give it to me.
You keep repeating this as if there's anyone disagreeing with you. Can you actually identify where any of us has claimed that people with no purchasing power drive production?
This ties in with the point I'd like to make about money. In a barter economy, "purchasing power" is, by definition, production. Whether I give someone a chicken, plumbing services or marry his homely daughter for him
, I am providing something of LITERAL productive value to someone.
The problem is this is super inefficient. We try to find mediums of exchange, even if it's just another form of production that works pretty well as money (pelts, salt, etc).
And as things get even more efficient, we try to leverage our productive capacities with debt. Debt allows us to leverage our future productive capacity, another person's money, and yet another person's production for higher benefit. (or go on vacations funded by credit cards... but let's focus on needs for now).
So if malinvestment or economic misallocation of resources happen in a barter economy, people suffer a little bit, but that is ok & natural. They'll just have to work a bit harder to get access to someone else's production than they thought. Even debts can be paid with production, because that's how they MUST have been denominated to begin with. I can literally accelerate my debt reduction by CHOOSING to produce more. I can just work harder, and people will accept that work as repayments of debt, or they will pay me through their hard work. Either way, value is effectively being exchanged and this economy is more robust, but less efficient, than a monetized economy.
But when your accumulated production is held as money rather than actual barterable assets, all your purchases generally require money, and all your debts are denominated by money, you've put yourself in a bit of a pickle. You've allowed one asset (let's say gold)... often on that isn't really used for much actual production, to be absolutely vital to the entire economy.
For instance imagine if we had a world-wide gold based monetary infrastructure. Imagine a similar world in a different dimension that decided that shiny yellow metals don't do much for them, and they just would rather use barter... but other than that EVERYTHING is the same in terms of REAL resources.
Now imagine that some aliens came and used a matter transport device to steal all the gold in both societies. The barter economy wouldn't notice. The gold-based economy would collapse, even though NO productive capacity has actually been taken. Nobody was murdered. Factories were fully functional. Infrastructure still worked. All the aliens did was push a button and stole all the means of payment. This is essentially (on steroids) what I mean by a "demand problem." You don't have enough means of payment to pay your fixed costs (debt, insurance, overhead, etc) AND make a decent living on top of it, so you refuse to send those means of payments on the productive capacity of others. It would work JUST FINE if you knew how to work in a barter payment infrastructure, but the monetary society lost that business acumen (at the level that they'd need it to keep doors open) long ago
In modern economies, understanding how PAYMENT SYSTEMS actually work is EXTREMELY important, especially as leverage is use more often (even if used efficiently). Production is ultimately the final measure of economic wealth, but we don't EXPRESS our propensity to consume someone else's production by producing something else. We EXPRESS it by transferring money to a producer. A producer, mind you, that MUST make payroll, pay debts, keep the lights on, pay for insurance, etc.
Now perhaps this "money" is all just a machination of the state (we had a debate a while back regarding whether even gold as money was pretty heavily state-driven, initially). But this is how businesses actually function today. Cash flows are HUGE.
Even though our fiat confetti has no theoretical intrinsic value, if you destroyed all of it (make everyone's bank account go to zero), and we all woke up tomorrow with just as much REAL wealth, we'd still have a massive economic crisis the likes of which we've never seen. Even if all "confetti liabilities" got erased too (it sure would be hard to pay a mortgage with no USD's in existence), we'd still have to figure out how to pay bills while everything stalls out.
The whole point is that regardless of what your STATIST opinions might be on counter-cyclical monetary/fiscal policies, people who run businesses HAVE to understand cash-flow rigidities and management. CASH is how people actually EXPRESS their purchasing power. I can't just show up with technical knowledge of how to build the best widget in the world and expect to know what I need to about business management.
Understanding payment infrastructure matters immensely. Perhaps it is just a state-made nightmare, but it's something to understand and manage, with huge importance, just like taxes and regulation.
And to come back full circle, this is why it's so IMPORTANT to understand why we have to put adequate value on those willing to part with cash to buy a product. If cash is the only asset that will satisfy means of payment, people are putting themselves AT RISK when they expend their accumulated production (in cash form) to trade for another form of production that does NOT satisfy payment in any/all instances.
Keep in mind, I'm not saying CONSUMPTION is important. I truly agree that a car destroyed or a ditch unnecessarily dug is a net LOSS of wealth. But the TRADE is important. It is IMPORTANT to BMW that they sell so many BMW's. Not that they necessarily be blown up by a government stimulus program. Try not to conflate respect for cash-flows with thinking that cash-flows are real wealth. They are not. They facilitate creation of real wealth IN THE REAL WORLD, and it's extremely important to understand how jimmying with cash in the real world will affect things, because as utterly useless as my confetti is theoretically, if I don't pay the bank some of it every month, my REAL house gets taken away from me.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
) will lead to higher demand. This is utter nonsense. 
.
and my employer bills me out for 100% of my time at triple my rate to them.
. The point is there is a big freaking dot that needs to be connected and that's regarding who is important in the consumer vs. producer relationship so we can stop supporting the guys hurting the economy (the communists/leftists/bleeding hearts/liberals/fascists/etc.).