5 Relationships Of Raw Materials To Money

Everything we use from this planet to live …

… comes in the form of Raw Materials.

Those who harvest nature’s bounty to provide Raw Materials for human society need to be able to do so without acquiring debt . Otherwise, if providing Raw Materials cost more than it paid, it would not be sustainable and providing Raw Materials becomes impossible.

Those who provide Raw Materials must be able to afford all the finished goods and services they require from the sale of the Raw Materials they produce. Otherwise, they could not continue to provide Raw Materials and survive.

(I know I repeated myself in the above 2 paragraphs. It is an essential point and I did not want it to be missed.)

The Price Level of Raw Materials determines
the amount of Free Currency in circulation.

Free Currency is Debt Free Money.

We’ve had Debt Free Money in the past, Free Currency, once upon a time in the United States of America.

Those who provide the finished goods and services to Raw Materials producers must be able to do so without acquiring debt. Otherwise, providing finished goods and services to Raw Materials producers would not be sustainable and it becomes impossible to provide finished goods and services to Raw Materials producers for very long.

Those who provide the finished goods and services to Raw Materials producers must be able to afford all the Raw Materials, finished goods and services they require from the sale of their finished goods and services. Otherwise, they could not continue to provide finished goods and services to Raw Materials producers and survive.

Those who provide finished goods and services to anyone are paid,
either directly or indirectly,
by the Raw Materials producers.

Having enough debt free currency to allow for the total debt free exchange of all finished goods and services depends upon the price level of Raw Materials.

It is not enough that farmers, fishermen, foresters, miners and recyclers make enough so that they may start a new production cycle, live long and prosper. All those who add their labor to animal, vegetable and mineral Raw Materials to produce finished goods need to make enough so that they, too, may start a new production cycle, live long and prosper.

(I’ll get to the service providers a little later because I feel they require more clarification and differentiation.)

The bottom line is that the price paid to Raw Material producers determine the amount of debt free money available to human society. The amount of debt free money available for personal savings and business investment is determined by the price of Raw Materials.

Here is a five part description of how Raw Materials relate to Money.

1. Debt Free Currency
   • A society’s annual production of raw materials must be represented in the economy by a sufficient amount of debt free currency (a price level) to optimize the debt free exchange between the raw materials producers and the finished goods and services raw materials producers purchase.
   • Those who produce the basic raw materials for society must be paid enough to afford the manufactured goods and services required for raw materials production.
   • This amount of debt free currency in free circulation must also be enough to optimize the debt free exchange of all manufactured goods and services at all subsequent stages of the economic cycle.
2. Debt Free Exchange
   • The amount of wealth in flow within the economic cycle must be represented in the economy by a sufficient level of debt free currency to permit the debt free exchange of all finished goods and services.
   • Without enough debt free currency to meet the need of debt free exchange an economy stagnates and dies.
3. Finished Consumable Goods
   once produced and warehoused, must be monetarily represented somewhere in the economy by more than their minimum domestic labor value equivalent in free currency, so consumption of finished goods can occur without supplemental debt or abstinence from consumption. (a surplus of production in the midst of poverty)
4. The Volume of Debt Free Currency
   available to distribute current production and facilitate the subsequent expansion of commerce is governed by the value placed on raw materials at the first point of sale.
5. The value of raw materials becomes the primary source of personal savings and business investment.

Human society cannot sell under-priced Raw Materials into a high priced retail market without replacing the underpayment with:

• capital debt
• interest driven inflation
• abstinence from consumption and
• a high rate of unemployment.

Governments and the FIRE (financial, insurance, real estate) industries know this and have known this for a very long time. Yet, these service providers have a verifiably long history of repeatedly screwing things up.

Some services I understand, such as education, entertainment and medical services. These seem reasonable and easily affordable if government and the FIRE industries did not cost so much and actually make things worse by repeatedly screwing things up.

I cannot believe that the world’s wealthiest and most powerful individuals with access to the best education repeatedly screw things up by accident. This whole thing concerning Raw Materials and money must go much deeper than the current financial meltdown and scandal.

The reason just about everyone else, including economists of all sorts, are giving more complicated explanations seems to be their need to retain all the rank, honors and privileges bestowed upon them by governments and FIRE industries.

Somehow, their rank, honors and privileges must be justified and maintained while explaining why things are screwed up. It is then no surprise that explanations become complicated.

To make things even more confusing, libertarian economists say things like:

“The governments of almost all countries are engaged in a campaign against the capitalists. They are intent upon expropriating them by means of taxation and monetary measures.”
-Ludwig von Mises

Now, Capitalism emerged as the dominant means to separate products from their producers subsequent to the general collapse of manorial feudalism during the Great Plague. Manorial feudalism gave us serfdom, bondage to the land, land owned by some big mucky-muck.

(I say general collapse of manorial feudalism because land bondage continues in the Southern United States with tenant farming, the foundation of Southern agriculture since the Emancipation Proclamation.)

In Europe, during and after the Great Plague, big mucky-mucks could not get enough serfs to do all the work, so they invented Capitalism to pay people to work. The plan was to pay people less money than what their products could be sold for.

The difference between the cost of Labor and the value of the products determined the amount of profit because Raw Materials costs had already been fixed.

The big mucky-mucks, AKA Capital, already owned everything, all they needed was a system to get people to work for less than their labor was worth.

(Well, they, Capital also needed a system to keep everyone in line. I get to that part a little later.)

In business, Capital is everything that is not Labor or Raw Materials. Capitalism just privileges Capital relative to Labor and Raw Materials, that is why they call it that.

This development meant that the big mucky-mucks, Capital, needed to find a way to have Labor pay for its own management. The old days of just getting a big guy with a whip to oversee the serfs were over.

Managers from the ranks of the workers themselves seek superior privileges over the other workers they manage. They are allowed rank, honors and privileges to the extent they are successful in profitably separating producers (workers) from their products (the job).

Successful managers are allowed to call themselves Capitalists to signify their usefulness to the system named for them, the Capitalist System.

Capitalists often internalize the system point-of-view through close identification with the owners, the big mucky-mucks, Capital. This mental construct then conflicts with their actual (negative survival potential) position.

Capitalists seem easily confused when the Capitalist System acts to collect the fruits  of other people’s production. After all, that is the very reason it was invented.

Capitalists forget they are workers themselves, workers used to more profitably separate products from their producers.  Capitalists are central to a system that must pay for its own management because the owners, Capital, does not produce anything of value to sell.

Capital, another name for the power behind the system’s infrastructure, claims its rank through national governments’ sanctioned cartels and monopoly control over Raw Materials. Capital is control over Raw Materials cloaked in status derived from military strength and the proven willingness to use it.

Capitalism is simply a system that privileges Capital over Labor (including management) and Raw Materials. Capitalists are simply specialists in separating products from their producers, Labor, for the benefit of Capital.

It is not that Capitalists are on the wrong side,
Capitalist are the wrong side.

The big guy with the whip who used to oversee the serfs now needed to be paid, just like everyone else in the Capitalist System. Capital invented the rank, honors and privileges of Sheriff just for him.

Sheriffs were employed to evict people from the Commons (common lands) where they paid no rents. With the Commons closed, people were forced into the cities for factory work so to afford rent.

The Security State Apparatus, a necessary part of Capitalism, descended from this role of the Sheriff as compliment to the Capitalist. The workers are assessed for the cost of being kept in line, policed, for the safety and security of Capital, Capitalism, Capitalists and the Capitalist System.

The cost to workers for their own management by Capitalists and the Security State Apparatus, that is, the cost of both separating them from their production and keeping them in line, is paid for by the workers themselves by means of taxation and monetary measures.

This is monitored by a Union enforced Labor hierarchy entrenched in government bureaucracies. The government itself legitimizes and defends the Union, giving it great political power, in an obvious case of conflict of interest and self-dealing.

Debt Free Money,
Free Currency,
comes directly from the sale of Raw Materials.

When Raw Material producers, those who produce finished goods from Raw Materials and those who provide desired educational, entertainment and health services can afford to live on Free Currency, Debt Free Money, then everyone in human society lives long and prospers.

The big mucky-mucks, Capital, using Capitalists and a Security State Apparatus monitored by government bureaucracies loyal only to their in-house Union, makes huge profits on debt. These huge profits come at the expense of Raw Materials producers, those who produce finished goods from Raw Materials and those who provide desired educational, entertainment and health services.

Debt is a fabrication of governments and the FIRE industries.

• Debt enslaves individuals and entire populations,
• enslaved as certainly as a chattel slave during Roman times
• enslaved as certainly as a serf under manorial serfdom
• enslaved as certainly as anyone coerced into doing something they truly do not want to do.

That is the relationship of Raw Materials to money.