Money capital in the present system is either created out of nothing by the banking system and loaned at interest, or has been accumulated as profit by investors. It is only utilized if it is seen as a producer of more capital/profit. Commitment to what is needed by the communities served by the banking and finance community is at best a second priority.
A discussion of profit is in order here. Profit has two very distinct functions. These functions need to be disaggregated. (Disaggregated is the Economicspeak term for separated/distinguished.) For a very small business, profit is the pay received by the entrepreneur for their time, effort and risk.
For a larger business, profit fulfills this function, and also accumulates capital; in this case unearned income; unearned claims on commitment. (Note that in the simple system described above, capital is created with the expectation that it will be earned in the future, with the results accruing to the community that committed itself to the capital formation.) This unearned capital is distributed to investors and managers, who have previously accumulated capital as unearned income, or borrowed capital to invest from the banking industry, which created it out of nothing, at interest.
Our current private accumulations of capital have to be understood for what they are; the result of a private welfare tax levied on the economy. This tax is paid to investors, managers, and creators of money, through their unearned profit from charges in excess of reasonable costs, for interest, products, or services they have billed out. These private taxes, which are claims on the commitment of the 99%, give enormous power to their holders.
The money-system private welfare tax is hidden in the transactions of buying and selling because we don't disaggregate profit. However it is none-the-less very real.
As a result of the present system structure, the accumulation of money capital has become an end in itself, rather than a means to make possible things that are needed and wanted by the users of capital.
This corruption of the function of money as capital is at the heart of why it is currently difficult to get things done that need to be done in our economy, if they aren't oriented toward profit. Because profit is the bottom line, we work for money, instead of it working for us.
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