Revised November 11, 2013
This is the fourth set of axioms in the Axioms of Economics. This set will include two sections of Axioms. The first section includes the Axioms covering Production Rewarding. The second section includes the Axioms covering Money Supply and Money.
Rewarding Production has been found to lead to prosperity. In Societies and Nations where production is rewarded, those Nations and Societies prosper very well. In Societies and Nations where non-producers and counter-producers are rewarded we find recessions, depressions, wars and hard economic times. The prosperity of the Societies and Nations rewarding non-production and counter-production is low and declining. The only solution that will solve a Society or Nation declining economically is to fully reward the Producers of the commodities, trades, goods and services. They must be rewarded in full for the money, value, energy, wealth, capital and power they have created.
Production Rewarding Axioms:
72. As production rewarding increases, money value increases.
Money value increases because increasing production rewarding gives Producers incentive to increase production rates. This increase in production on the Open Market causes demand for products to decrease, decreasing the value of the products. This allows for each money unit the power to purchase more production per money unit.
73. As production rewarding decreases, money value decreases.
Money value decreases because decreasing production rewarding lowers Producer incentives. Lower Producer incentive decreases production rates. This decrease in production on the Open Market causes demand for products to increase. Increased demand increases the value of the products. This increase in product value causes an increase in money units necessary to purchase the product. The money now has less value because it takes more money units to purchase the same product volume.
74. As the rewarding of non- production and/or counter-production decreases, money value increases.
75. As the rewarding of non-production and/or counter-production increases, money value decreases.
76. Reward production and only production, never reward non-production or counter-production.
77. Reward the Producers and they will reward you with abundant production.
78. Reward non-production and non-production will increase abundantly while production decreases.
79. Reward counter-production and counter-production will increase abundantly while production decreases.
80. Rewarding Producers enhances the prosperity of the individual, family, society, nation, mankind and the environment.
81. Rewarding non-production or counter-production directs the individual, family, society, mankind, nation and environment toward economic recessions and depressions.
82. Any individual making money in any other way than through the production of commodities, trades, goods and services is a rewarded non-producer or a rewarded counter-producer.
83. A society that is rewarding non-production and/or counter-production is declining economically.
84. Any society that is declining economically is rewarding non-producers and/or counter-producers on a large scale.
85. By rewarding non-producers and/or counter-producers you are helping yourself decline economically along with the non-producers and/or counter-producers.
86. Increased production rewarding increases sanity in a society, thus decreasing crime and war.
87. Increased non-production and/or counter-production rewarding increases insanity in a society, thus increasing crime and war.
88. War when used as the first solution or any solution other than the last solution to a problem is a system of rewarding counter-production. This activity causes the individual, family, society; nations, mankind and environment to decline economically.
Money Supply and Money Axioms:
The money supply provides symbols used for the medium of exchange. When a constant money supply is maintained we have a standardized economic system. The money supply gives us money unit objects. These money unit objects are where value, energy, and power are transferred and stored. The value, energy and power are transferred into and stored in money units during the process of marketing goods and services on the Open Market.
This section includes the formula for applying a Constant Money Supply to Banking.
It is found; when constant money supplies are maintained, very stable economic systems are created by Producers.
89. When a constant money supply is maintained, we maintain a constant unit of measure in money units for monitoring the value of production.
90. Money, in money units, is a means of measuring relative value of products on the Open Market.
91. A Constant Money Supply applied to banking;
A. Hold the number of monetary units constant in the money supply.
B. Decide what ratio, money on hand to money loaned out, is most stable when loaning out money. Then hold this ratio constant. This will set up banking so it will never fail.
C. Banks don’t loan out money beyond the established stable ratio of “money on hand to money loaned out.”
D. Creating money, “out of thin air,” is the act of transferring value from the money currently in circulation and placing the value into the newly created money without an exchange for it on the Open Market. This is an act of counter-production. This is an act of taking other peoples’ money (value, energy, wealth, capital and power) and using it with no production in exchange for it.
E. Creating money, “out of thin air,” is very destructive to individuals, families, societies, nations, mankind and environments.
This formula maintains a constant money supply.
92. The value of money is inversely related to the size of the money supply.
93. Creating money, “out of thin air,” to increase the money supply decreases the value of all monetary units in proportion to the number of money units created “out of thin air.”
94. Creating money “out of thin air” to expand the money supply is a form of counterfeiting and rewards non-production and/or counter-production.
95. An open or floating monetary system, where the money supply is not held constant, has few winners and many losers.
96. Expanding the money supply is not an ethical act.
97. When the money supply is expanded, the individuals first to receive the newly created money reap huge profits.
These individuals reap huge profits by transferring value, energy, wealth and power from the money currently in circulation. This value, energy, wealth and power are transferred into the newly created money. They are taking money value, energy, wealth and power without placing commodities, trades, goods and services on the Open Market in exchange for it. Other individuals in the society lose money value, energy, wealth and power which are transferred to the individuals who first received the newly created money.
98. Expanding the money supply leads to inflation.
Money loses value when the money supply is expanded. It requires more money units to purchase the same commodities, trades, goods and services.
99. Shrinking or contracting the money supply increases the value of money units in the monetary system.
100. Production doesn’t depend on the monetary system for existence. The monetary system depends on production for existence.
101. Production is senior to money. Production gives money its value, energy and power.
102. Production is senior to capital. Production gives capital its value, energy and power.
103. Production is senior to wealth. Production gives wealth its value, energy and power.
104. Production creates the power an individual, family, organization, society, nation, mankind and environments possess.
105. Money lends efficiency to production.
It is efficient to transfer the value of one’s production into money units. One can transport the money units to another location and use them there to purchase needed and wanted products. Before the concept of money was developed and put into practice, production was carried from location to location with the purpose of trading it for needed and wanted products. This is the barter system. It is very inefficient.
106. Money is always junior to production and production is always senior to money.
107. In order to get money out of the money supply, an individual must always exchange production for it on the Open Market.
Producer Rewarded Open Market Economics
The Science of Economics
By RP Obrigewitsch
Revised November 11, 2012