 
### THE MYTH OF ECONOMY

WHAT NATURE CAN TEACH US THAT HARVARD DOES NOT

Dr. Rajkumar Chetty MD FRCPath

Copyright © 2018 Rajkumar Chetty

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CONTENTS

Introduction

Chapter 1: From Each According To His Ability, To Each According To His Needs

Chapter 2: Biological Economics

Chapter 3: Basic Structure Of Economy

Chapter 4: How Well Are You Living?

Chapter 5: Natural Wealth And How You Can Steal Them

Chapter 6: Unit Of Economic Transaction

Chapter 7: Origins Of Capitalism And The Transition From Agrarian To Mineral Economy

Chapter 8: Evolution Of Banks

Chapter 9: Learning From Nature

INTRODUCTION

We are novices when it comes to global economy. It is not even 200 years since we have been doing global economy though Homo sapiens have existed for over 200,000 years!

I do not think we can call ourselves masters of economy because we have hardly done it right. There are too many flaws in it.

While we have evolved a reasonable political system such as democracy wherein people have the power to elect their own government we do not have such luxuries when it comes to economy. You have hardly any say in it as a common man Do you?

Economy seems like a con game. Conmen abound the world over who know how to manipulate the system to their favor. We have allowed this to happen and whose fault is it?

Most people seem to have a good life now when compared to the war times and there is a sense of euphoria around all of us. We have our house, we have our gadgets, we have our credit cards and so on. There is no food ration and we have this gullible belief that it is all going to last.

In this book I am going to explore the nature of our economy and look for things we are doing wrong and what we can do about it. I am going to seek help from natural systems that have over 3-4 billion years of proven track record how to run an economy.

An economic unit is an open system.

This applies to all types of economic units like companies, nations, individual households and even life systems.

An open system means that there is an input of some sort of substrate into the system. The substrate that is put in is used to do constructive work or make a product. In return there is something that is put out, or exchanged, in the form of a finished product or service that is of use to some other system elsewhere or has a commercial or biological value depending on the system we are looking at. What is put out can also be a waste product.

What goes in could be money or equivalent asset of value in the case of an economic unit. The word 'open' refers to the fact that whatever is put in goes out perhaps in a different form or shape. The important thing is there is an exchange of a commodity between the unit and the environment which in the case of economic units could be the society.

The concept of 'open system' is used in thermodynamic considerations. A life system is an open system that takes in energy and leaves out the waste and this exchange continues to happen as long as the system is living.

A closed system would mean there is neither an input of anything nor is there anything put out. Whatever the system had inside in the beginning continues to remain inside undergoing transformations but nothing goes out.

Typically, an open system uses the inflowing substrate (be it energy or money) to perform 'useful' things. Inside a living system the energy that is taken in could be used for various metabolic activities resulting in growth and specialization of the body. That is why we need to eat every day. We also excrete unwanted things returning unwanted matter back to the environment. Any unwanted products formed in the course of this utilization will be discarded if considered harmful or waste. This is standard stuff.

If you take plants as examples of open life systems they take in sun's energy, water and the carbon di oxide as substrates or raw materials. These items have to keep coming in for the plants to put out some of the glorious products. They are food and oxygen.

People normally reserve this way of discussing an open and closed system to nonliving systems. The second law of thermodynamics is involved in this phenomenon. All energy is used by a system to perform 'useful work' which in a life system would mean metabolism and growth. A lot of energy will be wasted as heat. The energy efficiency of a system is only between 25-40% and the remaining wasted energy is dissipated as heat. This heat cannot perform any useful work and can only allow potentially useful energy to go waste. This means the orderly energy is wasted as disorderly, wasteful energy (heat). Physicists would call this disorder or entropy. A system always moves towards this state of disorder in the course of its action. If new energy is not put into the open system the system would quickly enter a futile, back and forth reaction where the meaningless forward and reverse reactions will result in an equilibrium state. The word equilibrium is a misleading word because it suggests as if the system has settled in a nice, comfy state which almost feels like a good state to be in. But, in thermodynamic terms this is not so.

A system that has stabilized into a state of equilibrium has reached the maximum disorder. In this state there is no more receipt of any useful new energy and whatever that had existed before had been used up often as wasteful heat. This is like squandering of resources into wasteful things talking in economic terms.

Take a household economic unit. You earn your salary each month and this is useful 'energy' that runs the household system. Your household is like an open system because there is a regular input of new useful energy (money) that has a big potential to do useful things (create order in thermodynamic sense). The family does a lot of useful stuff with the money like purchasing food energy for their individual bodily growths as well as using it for transportation, housing, medical expenses etc. Like always where there is energy economy there is waste as well. In a household economy the waste comes in the form of things that the money is used to buy that does not add any value. It could be the impulsive shopping that you did buying things that you really did not need, eating out in restaurants paying multiple times more than what it could have cost in home cooking, buying expensive cars that did not transport you to Mars or something (instead of your workplace) and so on. Such wasted money leaves the household as wasted energy like heat leaves a thermodynamic system. This energy (or money) is no more available to do any more useful work for you as a household no more than what a thermodynamic system can hope to get from the lost heat.

You can use nations as examples of economic units as well. There is no dearth of wasteful expenditures in a nation's economy. Wars, corruption, bad planning all lead to waste. At the same time a lot of good, useful work happens that lead to growth. The country has a lot of productivity in terms of industry, agriculture and commerce and these products are the outputs in thermodynamic sense. The same way the country also imports a lot of things which is the input.

I am sorry to keep using thermodynamic terms freely as if they apply to economic principles also. I feel I am right because they do.

The First Law of Thermodynamics states that the total energy of the universe is constant. No new energy can be created. No energy can be destroyed either. Just like energy wealth can neither be created nor destroyed. Both can only be converted from one form to another. Is there any economist who can refute this argument? But, our economy has been designed such that private individuals can 'create' new wealth out of practically nothing. The hyped asset value of stock and derivatives is one stark example of this phenomenon. But, here again when someone makes a bad economic transaction he loses some or all of his wealth. But there is always someone else who gained from his loss. Same way when someone makes this imaginary wealth from the stocks and derivatives someone else suffered a loss and so both should cancel out. There was no new wealth created. Would you disagree?

The subprime mortgage crisis that made banks collapse is really not like the mortgage loans vanished away causing a loss to the banks concerned. The properties were indeed repossessed by the banks and they must have probably netted the banks the money they lent. The borrower had his house repossessed in lieu of the money borrowed. The bank got the money back in the form a tangible asset which only can yield more returns in the future as the prices go up. So, where was the need for bailing out the banks with public funds? Do you see the point?

This book is about the enormous similarities between the way our economy runs in the society and the way life systems conduct their energy economy. The parallels are too striking to miss. My objective is to see if there is anything that we can learn from the nature to help the modern economists to fix the problems before it is too late.

The collapse of our social economy is imminent. Life-saving resuscitation measures are needed immediately.

# CHAPTER 1

### FROM EACH ACCORDING TO HIS ABILITY, TO EACH ACCORDING TO HIS NEEDS

Analysts at Credit Suisse Research estimated that 10% of the world's richest people owned 86% of the total wealth.

The value of global wealth is said to be approximately $240 trillion a few years ago. It will grow to almost 300 trillion dollars by 2020.

In 2015 OXFAM released a report that said 1% of the world's richest owned 50% of the global wealth which is about 120 trillion dollars! In 2009 they owned only 44%, in 2014 it was 48% and in 2015 it was 50%!! Oxfam also said that 85 richest people have the same amount of wealth as the poorest 50% of world population. This is about 3.5 billion people by the way. In other words 85 people have more than what 3.5 billion people have. In 2010 the same figure was 388 people having the same amount of wealth as half the world's poorest population but now even 85 rich people are enough to reach the same target! In the UK 100 richest people had same amount of wealth held by 30% of UK households!! Their wealth increased by 15 billion pounds in 2008 whereas the average Briton's income rose only by 1233 pounds!!

The economic model that we have devised for ourselves is plain wrong and unfair.

It is a bad design. It helps some lucky ones while ignoring the interests of the majority. It is evil in that respect.

What does not work for the majority cannot be considered a good idea. It is not democratic.

There is hardly any other walk of life where the majority does not have the decisive power. Why should the economic model only allow that?

It is no secret that 1% of the world's richest will eventually own 80% of the overall global wealth. Rich people are sleeping on heaps of wealth which they will never be able to use it all in their lifetime. They will be lucky if all of their family folks did that even down many generations.

How could you ever hope to use up billions of dollars? What could you possibly do to spend it all? On what can they spend it on? Does food cost that much? Because you are a billionaire can you eat 10 sandwiches instead of one? Even if you did will it hardly make any dent on the massive wealth of the ultra-rich people. Does even the highest quality, luxury accommodation cost that high? Or, do you want a mansion in every continent or something? Or, even worryingly in every country? Apart from beating the commonsense logic of a home being a place to live this would mean that you have seen it as an investment which does not in any way make this any better. Or, do you have to buy clothes from all leading brands to use up your billions? Even if you bought the entire store or even buy the factory you cannot make the billions go away. Then why on earth do you need the billions for?

This makes far more distressing read when you consider that world's majority of people go hungry when going to bed. The world's majority of people do not own a home. Even when they do it is more a humble home than a mansion or a palace. The world's majority does not have access to clean water. They do not have access to good health as food, water and sanitation directly impacts on the health. Nearly half of the world population, live on just 2.5 dollars a day most of them without access to good water or sanitation. Can something be more worrying than that? I guess these facts alone would vindicate me and my claim that the world economy model is evil and wrong. I am not the first one to say that.

It would take just around 17.5 days for the best paid executive at a top company to earn what a minimum wage worker in rural India will earn in their lifetime (presuming 50 years at work). In other countries like US it would take hundreds of years for a poor worker in developed countries to earn what a CEO would earn in the US. Winnie Byanyima, Executive Director of Oxfam International said: "The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system. The people who make our clothes, assemble our phones and grow our food are being exploited to ensure a steady supply of cheap goods, and swell the profits of corporations and billionaire investors."

Karl Marx, proposed the Communist philosophy that offers free access of goods, capital and services. The complete paragraph containing Marx's statement of the creed in the _Critique of the Gotha Program_ is as follows: In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: _From each according to his ability, to each according to his needs._

The phrase _'From each according to his ability, to each according to his needs'_ is very catchy. Marx is popularly thought of as the originator of the phrase, the slogan was common within the socialist movement. For example, it was used by August Becker, a German political activist, in 1844 and Louis Blanc, a French Socialist, in 1851.The origin of this phrasing has also been attributed to Étienne-Gabriel Morelly, a French Utopian thinker and Novelist, who proposed in his 1755 _Code of Nature_ "Sacred and Fundamental Laws that would tear out the roots of vice and of all the evils of a society", including:

I. Nothing in society will belong to anyone, either as a personal possession or as capital goods, except the things for which the person has immediate use, for his needs.

II. Every citizen will be a public man, sustained by, supported by, and occupied at the public expense.

III. Every citizen will make his particular contribution to the activities of the community according to his capacity, his talent and his age; it is on this basis that his duties will be determined, in conformity with the distributive laws.

The Roman republic, as early as in the third century B.C., passed laws limiting the amount of wealth or land that could be owned by any one family.

Francis Bacon, the English Philosopher and Statesman, who is also known as the Father of Empiricism, wrote "Above all things good policy is to be used so that the treasures and monies in a state be not gathered into a few hands... Money is like fertilizer, not good except it be spread."

Communism arose as a reaction to a distribution of wealth in which a few lived in luxury while the masses lived in extreme poverty.

The world political systems have shunned communism and socialism. Socialism means a politico-economic system where the means of production, distribution and exchange should be owned by the community as a whole and not by private individuals. In Marxist theory it is said to be a transitional state between capitalism and realization of communism. The profits generated by the community-owned firms would be controlled directly by the workforce of each firm or accrue to the society. For example, the profits of these enterprises could be used for the benefit of the society like building hospitals, schools, roads etc. In this system what would go to the private owner as per capitalism is being diverted towards the common good which makes good sense. The socialistic political movement originated in the mid-to-late 18th century. By the late 18th century Karl Marx and Friedrich Engels had done a lot of work on this movement which had come to be viewed as an opposition to capitalism.

It is not true that socialistic thoughts were invented by Marx or Engels. Even Greek philosophers like Aristotle and Plato had espoused something on these lines. Coming in the geographical region where democracy originated it is easy to believe that the Greek leaders and thinkers might have considered social good rather than benefits for the elite. Even a Persian thinker called Mazdak advocated communal possessions and public good. He lived in Persia around 500 AD. The socialistic movement spread in France right after the French Revolution. Considering that French Revolution was a result of excesses of French Royalty that led to a low standard of living for the public it is not difficult to expect such socialistic aspirations. Thomas Paine, an English reformer who lived in the late 1700s, participated in the Fence Revolution and was also instrumental along with Benjamin Franklin in the American Revolution for independence from Britain. Paine wrote the 'Age of Reason' where he argued for reasoning and free thought. He also wrote the 'Agrarian Justice' discussing the origins of property and introducing the concept of guaranteed minimum income for families. This is the forerunner of the idea of socialism where individual and family needs are assured at least to the minimal extent. Who can fault such arguments?

Communism, even though it is normally associated with China or Russia, was a term that was coined by a Frenchman called Victor d'Hupay in 1777. He advised that the community should share all the economic and material products that arise from everybody's work. As with the socialistic thoughts the Greek thinkers had proposed a classless, egalitarian society. The Mazdak movement in Persia in the 5th century AD also challenged the enormous privileges of the noble classes and the clergy. It criticized the institution of private property and for striving to create an egalitarian society. The 18th century English writer Thomas Moore portrayed a society based on common ownership of property in his treatise Utopia (1516 AD). Communist thoughts arose in England in the 17th century when a religious group called 'diggers' advocated the abolition of private ownership of land. Criticism of the private property continued into the Age of Enlightenment of the 18t century in France. Communism emerged as a political doctrine in France after the French Revolution.

After the advent of the industrial revolution, social critics blamed the capitalists for the misery of the proletariat - a new class of urban factory workers who labored under unsafe conditions for poor wages. That was when Marx and Engels popularized the communism in their famous 'The Communist Manifesto'. In Russia Lenin rose to power in 1917 and it was the first time a communist party succeeded in doing so. The problems faced by the Russian public during and after the World War I made them to do so

Karl Marx predicted that, even in his own lifetime, proletarian revolution would overthrow the capitalists, abolish markets, and socialize the ownership. But, sadly, there were no proletarian revolution even in the advanced industrial countries where capitalistic tendencies were most ripe for the overthrow of capitalism. Where the workers organized themselves it was more for demand of better working conditions and wages. Mark did not foresee the global expansion of the capitalistic core countries.

There was an intimate connection between the capital and the state in Western Europe. The expanded powers of the state were used to help acquire exclusive control of the markets in the non-industrialized, less developed nations. This led to the new wave of direct colonization of societies starting from 19th century. Asia, Africa and the Caribbean were exploited for their rich natural wealth. Germany, Italy and Japan joined the race for empire creation following the earlier success of Britain, France and Netherlands. The rivalry possibly led to the World wars fought mostly amongst the Western countries at the core of capitalism. By 1913 two-thirds of the world's manufactures were concentrated in Britain, US, France and Germany. In 1750 it was only a tenth! Britain had the same per capita income as Asia in 1800 but by 1930 it had become 6 times more! Capitalist development in the West produced under-development in the peripheral countries. The two World Wars battered the capitalist nations weakening them also.

The October Revolution of 1917 in Russia began a temporary reversal of the global concentration of capital and power. The Second World War weakened the rich countries to the extent they were unable to wield control over their colonies the same way as before. Decentralization of power followed massively. By 1970s a third of the world's population lived in anti-capitalistic, communist countries. Growth in these countries accelerated.

The core countries still managed to keep their links with their former colonies for accessing their markets. Britain formed the Common Wealth to link up all their former colonies which would give them continued trade access to these regions. This included importing products made cheaply in these nations and also to export their own goods. The US manipulated the international development to suit their interests. Starting in the 1980s the IMF and the World Bank were used to control the emerging nations. The loans issued to these nations mounted and there was the possibility to twist their arms and open up their markets. The WTO created in 1994 allowed the capitalistic interests to be mandated. But, Soviet Union mounted a strong response against the global capitalism by becoming a super power by itself. At the end of the Second World War it had emerged as a dominant power. Soviet Union, Eastern Europe and China kept the flags flying high. They constituted a third of the world's population. Communism spread to other nations too where political parties were formed. At a time when it was expected that Communism will spread to the war-torn Western Europe the US-led schemes effectively curtailed the communist advances. Soviet Union itself collapsed in 1990 ending the resistance to the capitalism.

I am not trying to promote communism or something like that. My plan is to show that there are better ways of doing economy than what we have been handed over by the elite few who put their interests ahead of the common good. In 2014 The World Economic Forum listed income inequality as the second biggest risk to our society.

That alternate model I am trying to elucidate is not my own invention because I am no economist. But I sure do know that you don't have to go to Harvard to know that the economy we are now working with is plain wrong.

I am sure many people already know that but cannot do anything about it.

In this book I have attempted to compare the ways nature has devised the economic principles of life systems as opposed to what we have done in our modern economy of the 21st century.

# CHAPTER 2

### BIOLOGICAL ECONOMICS

Readers may already start wondering how I can compare these two different things. Why not? Fundamentally body economics is so similar, if not identical, to our global economy in terms of the needs. How both systems have achieved the right solutions is what we will discuss. It is quite likely that the modern economy of the 21st century is still evolving just as we have seen major changes in the global economy in the last millennium. We are more likely to be continuing in this evolutionary trajectory for possibly millennia to come. One thing is certain. What we have achieved so far is far from ideal. We are in our infancy when it comes to economy.

The only solace we can derive is the possibility that the capitalistic economy is a passing phase that will not stand the test of time.

In my previous book 'The myth of human intelligence' I had written a chapter on the similarities between economies of life systems and that of the society. I want to reproduce it here in this book to first win the support from readers before even they discard the whole premise as meaningless.

An organism lives on a daily budget. An average human being needs about 2000-3000 calories per day and ea(rn)ts that much food to supply this energy. It may be as high as 4000 calories for heavy working people. Just because you make millions you can't eat 10,000 calories a day. Metabolism is a great equalizer!

When one eats more than the required amount of food, he or she is in a state of surplus budget. There is some scope for saving some energy for the rainy day. The fat cells (Adipocytes) are our bank of food energy. Surplus food energy is stored here. The fatter the person, the more wealthy his body is. This is at least true from the point of view of how much energy is stored. However, the fact that an obese person is at more risk for developing stroke, heart attacks, diabetes etc., is probably a lesson for the economical organization of our society. Every individual, every company, every nation is constantly on the lookout for surplus cash that it can stash away. When wealth is accumulated by a single person, single company or a single nation, the 'economic obesity' would put things at risk for the system. It cannot be healthy. This is one of the stark realizations of the harmful nature of our greedy, money-seeking behavior.

What happens when you don't eat enough to get the 2000 calories? You are obviously in a deficit budget. All economic principles operating in a cash-starved country or company come into play. All developmental activities come to a standstill. There are no more saving activities. Do you ever put money into your savings account when you are struggling to pay your bills? Can a country think of spending a hundred million dollars on a sports stadium when its budget is in the red?

Inside your body, all your energy savings are mobilized. Firstly, you notice the loss of body weight which means all your fat has gone i.e. the energy savings. Then there comes a stage when your body desperately tries to find some energy from anything it can lay its hands on. Proteins are attacked as a source of energy. There isn't energy or resources for making many important proteins in your body and so all energy and resources needed for making less important proteins are diverted towards other pressing needs. What do you think you will do in a situation like this? Wouldn't you sell your car, your valuables to buy some food if you do not have any more liquid cash? How long can you go on in a deficit budget? Surely, there is a limit to it. You can't endlessly cut subsidies, development programs etc.

Up to a point, all these strategies work to keep the system from breaking down, whether it is the body, your company or a government. Nevertheless, a stage is reached when nothing more can be done. That is when people die of hunger as in Ethiopia and Somalia. That is when cells in a life system start dying. The 'famine' of a country and the hunger of an individual life system literally meet here. The country has nothing to offer to the citizen. The citizen has nothing to offer to his or her body cells.

While discussing the aspect of storage of energy I should mention the overwhelming similarity in the way life systems store our energy and the way the earth has done it. I can see some eyebrows being raised when I said the earth has some energy stored inside it.

What do you think you are using to run your car? Where do you think you got the gas to heat your homes? Where do you think you get coal? They all come from the belly of the earth. The earth takes care of the energy needs of the hi-tech society in every sense of the word!

Do you think it is getting a bit interesting? Now I will let the cat out of the bag. Did you know that the oil that we get out of the "Earth's belly" is chemically of the same nature as the fat we store in our body cells? Both are Hydrocarbons!

I am sure every one of us knows why we need to save energy. Considering space limitations it makes sense to pack as much energy as you can in a given volume. Hydrocarbons are your best bet. They shun water and, therefore, don't become bulky. Hydrocarbons give you twice more energy, weight for weight, when compared to carbohydrates, for example. Life systems have solved the problem of energy storage by 'choosing' hydrocarbons as the storage form. Is it more than a coincidence that the earth stores hydrocarbons in its belly? Is it also by chance that man has used the oil hydrocarbons to build his entire modern economy?

The hydrocarbons in the earth's interior presumably got there by thousands of years of transformation of plants & animals life forms that were buried inside. It was a slow process. The matter that was once a part of different life systems ends up being transformed to hydrocarbons. If you look carefully, it looks as though the 'planet digests & metabolizes' matter converting them to a form similar to what an individual life systems does. We eat different plant and animal products, digest them, metabolize them and churn out hydrocarbons (fat) as the storage form! That is what our planet did.

Going beyond the similarities in the mechanisms of formation of hydrocarbons and the chemical similarities let us ask one simple question. Just why do the fossil fuels exist? What do we do with it? Don't we get energy out of it for running our machines and cars, just as our body cells get energy out of our body's hydrocarbons (fats) for running the cellular functions? OK when we starve, we use up all the stored fat. What do you do to replenish the stocks? You eat. All of us know that the earth's fossil fuels are not going to last. Does that mean the earth will have to go on a 'feeding cycle' again? What I mean is the earth has so much plant & animal matter getting buried into it. Such matter will one day replenish the energy stocks!

I have to point out that I never intended to make earth look like doing a planned operation. I know, as well as you do that we alone can plan. I can't help it if two dissimilar systems do similar things. Can I?

Did you know that the cells have their own ways of carrying out their energy transactions? Energy for the cell is like money for us. They use it to bring about biochemical reactions. Every biochemical reaction carries an energy price tag. Metabolism costs a lot in terms of energy expenditure. The cells have to find this energy from the food. Much of the food energy is used to make life possible but the 'overhead expenses' come a bit high inside the cell. Isn't it the same case in our society too?

The financial system of man uses the monetary currency as the unit of transactions. We use Dollars, Pounds, Rupees etc., to measure the quanta of the money involved. A man may be in possession of millions of dollars in the bank account in addition to the property he owns. That does not mean that he can show the documents to this effect to the shopkeeper to buy a pack of cigarettes! The shopkeeper would like hard currency. Again, what if the millionaire walks around with thousand dollar bills! You need much smaller bills to be able to offer the exact money needed to buy what you want. In essence, the financial system works with small units of monetary currency.

The cellular energy is also available in tiny quanta called the Adenosine triphosphate (ATP). It is the equivalent of our monetary currency. All cells work to obtain this ATP energy currency in order to be able to run their molecular machinery. When they can't make enough ATP, they starve to death.

When it comes to the monetary currency we have far more number of currencies on our planet. Every single country has its own. That means almost at least 100 currencies as of now. In the past, over the millennia, there have been thousands of them. Then you create a common currency standard which is arbitrarily chosen to be either the pound sterling until about the early 1900s or the dollar later on until now or the gold. All national currencies are pegged to the value of the dollar to make it more quantifiable. In a life system there is only one major currency - adenosine triphosphate shortly known as ATP. That is it. Are you impressed with the simplicity and beauty of the natural systems? Have we got a lesson to learn here?

The food that we eat has enough energy to make millions of ATPs. If you burn the food, it would be charred liberating the heat energy. This burning of the food requires oxygen to combust the food. We breathe to obtain this oxygen to 'combust' the food inside the body in a controlled manner. It is not a one-step reaction. If it were, all energy would be released in one shot, which would probably be like incinerating the cells in the sudden release of energy. We don't want such massive release of energy as if a bomb exploded every time we eat. Do we?

The body cells produce the food energy in small quanta (I.e. ATP), which occurs inside the mitochondria. These 'energy currencies' are used to run their life. The mitochondria are the printing press of the life systems where the energy currency gets produced. The only difference between the treasury money printing and an organism generating energy currency is that there is no way a life system can 'print' energy currency out of thin air. Is this another valuable lesson for our bankers who not only print unlimited amounts of currency without the backing of the gold reserves but also have the ability to create virtual money circulating as credit card balances and derivatives. In fact, what alarms me is there is the legitimate currency is outnumbered by the ethereal currencies by hundred fold!!

Do you know the efficiency with which our man-made machines work? It would probably be in the order of 20-25%. In other words, we are able to use only 20-25% of the energy associated with your fuel, the rest going as waste. The wasted energy goes as heat. Whether it is your car or your industrial machine, all of them can manage only this level of energy efficiency. We accept that the wastage is unavoidable. Again the heat that is liberated as waste has a role to play in the universe.

Our cellular machines can do better than that. They are said to be able to capture about 45% of the food energy, almost two times the energy efficiency of man-made machines! It is the result of hundreds of millions of years of evolution! If your car could capture energy at this efficiency it would give you twice as much mileage for every liter of petrol you feed it! Also please note that the energy wasted as heat actually is used to keep our bodies warm enough to run our biochemical machinery. Our cellular enzymes run only when the temperature is about 35-37C.

One thought flashed across my mind as I write it. What would be the wastage rate of our monetary currencies? If you considered our economy as an engine (which is not a bad analogy at all) how efficiently are we running it? Could we do better? What are the inefficiencies associated with our modern economy engine? Bad debt that never returned is an economic waste. There is an abundance of it all over the globe where the banks write off loans. The other way of looking at it is a bank that ran having failed to return the deposits of the gullible public. The count of such bank failures should be in thousands since the origin of banks. A private financial institution that deals with stocks and shares may have lost money which is a waste while it made some profit in another transaction. There are many industrial houses that made a variety of products but never got to selling them successfully either because the products were faulty or did not have enough attractive, beneficial features. All the money invested in building the factory and salaries paid to staff etc. are effectively wasted. As in energy economy the 'waste' was really 'profit' for some supporting industries that supplied the raw materials to this factory or was 'salary' for those employees.

Matter is never allowed to remain static in one form longer than necessary. Let us take your own body. You are a life system holding on to your quota of matter. You exchange that matter with the environment constantly. You take in something and leave out something. Monetary wealth is also similar in that respect. It also keeps changing hands.

What happens when we die? What happens when other life forms die? Does it make sense to let the matter associated with their bodies go un-utilized forever? The concept of 'recycling' is not restricted to human society. We are not the only ones to worry about sustainable resources **.** When we came up with ideas of recycling paper, plastics, metal etc. we found a way to solve our resource crunch as we were able to reuse matter. Wherever possible, we tend to use 'biodegradable' materials, which is another way of avoiding matter from being locked up forever. Microbes break down the biodegradable materials to release the matter back into the cycle.

Saprotrophs are microbes, which feed on dead organisms. They do the job of decomposing the valuable organic compounds into mineral forms like carbon dioxide, water, nitrogen and mineral salts. They protect the biosphere from the toxic effects due to the decomposition process of the body of the dead. More importantly, they return the carbon and nitrogen, held by the dead body, into the free mineral form, which is further used by other organisms. The great thing about biological economy is that everything is biodegradable. There is no lock down of matter or any biological asset.

The cycling of matter that occurs in the biosphere is analogous to the recycling of wastes by man today! We not only recycle man-made goods but even 'organs'. I am referring to organ transplantation, taking organs from dead donors!

Animals on our planet obtain their nutrients from unbelievable sources, which makes us wonder looking at the beauty of 'planetary resource management'. There are organisms, which eat blood, wood, wool, feathers, fish scales, dead organisms, wax and even excrement (of their own or that of others). Coprophagy, the practice of eating excrement, is a bit too much. It may not suit our aesthetic taste but it is so much useful for the biosphere as a whole because valuable organic compounds are recycled.

Beetles, mites and worms feed solely on dung. Among them are some which will eat only cow, horse or hare dung. The larvae of the honey comb moth usually feed on beeswax. If the bee nest is completely devoured, there is nothing else to eat. Now the larvae change to a dung-eating habit. It starts eating its own excrement that they have accumulated over the past. How can one expect anything useful in the excrement? Haven't they absorbed everything that was useful during the first round of digestion?

Beeswax is a substance, which is extremely hard to digest. Even though the honey comb moth is a specialist in eating beeswax, its intestines cannot completely digest it in one go. Some amount of undigested or partially digested wax is passed in the excrement that comes in handy during periods of scarcity. By repeated processing of excrement more than one generation of honey comb moth can thus grow up. This cycle can even last for up to 7-8 years.

It is curious that, occasionally, excrement of organisms that lived as far back as 7-8 million years ago can be put back into the bio-cycle. Ichthyosaurs were gigantic, predatory reptiles, which lived in Europe 7-8 million years ago. They have left traces of their existence in the form of enormous dung heaps. The excreta have become fossilized and are seen in England and West Germany. Man has learnt to make use of them. These fossilized excreta (coprolite) are finely crushed, to be used as a fertilizer! Time is not a deterrent to the resource-consciousness of bio-systems!

Food, water and fuels have always been in short supply for mankind. At any point in time or place there are always regions of the world, which find one or more of the commodities lacking or not available freely. Many regions in Africa totally lack water, and are uninhabitable. Food has always been a problem in many parts of the world. Competition, seasonal availability and other factors contribute to this state of affairs. Fuel is a big issue for invariably all countries in the world. The fossil fuel are not going to last and the race is on to find alternative, cheap fuels. Man tends to conserve oil in the fear that he may run out of it. We conserve drinking water too. This state of affairs is seen uniformly in developed and developing countries.

Man can build dams to store water. He can employ modern agricultural practices to grow more grains. He can find alternate fuels if he runs out of natural fuels. Yet, these things don't happen without man having to fight tooth and nail. Africa is a stark example of how man can fail in sustaining resources.

For lower organisms, the solutions to resource sustenance are found in genetic adaptation. What man does with his brains & science the lower life forms achieve with the help of genetic solutions.

Technological advances have helped the human nomads abandon the wandering life but a number of animals, birds, and insects have always lived this way. Seasonal migration of birds, mass migration of animals in search of food, movement of swarms of insects and fish are all forms of such active movement.

Our planet had only finite resources to start with. There is no way matter can be created on earth. We may get some organic and inorganic matter coming into the earth in the form of meteorites and asteroids but overall the amount of matter available for use is finite. There are 30 million types of life forms, each in unknown numbers, varying with each other for the available matter. This is no different from about 7 billion people vying for their share of the global wealth pie which is estimated at 240 trillion dollars!

Matter is precious. Life systems know that too well. Given the intense competition for matter it is no wonder that it is used in the best possible way. Matter is never allowed to be locked up in unusable forms. Life forms grow virtually everywhere. You can find them even around volcanoes, hot streams, deep oceans, and rarefied heights of atmosphere as high as 50 Kilometers!

Man, similarly, tries to exploit every type of matter that can be converted to a saleable commercial commodity. This has led to the social evolution of a new breed - the capitalists.

You have to live. It does not matter what happens to the other organism. This seems to be the attitude of all life forms. Symbiosis is probably the only decent way of mutually agreed way of utilization of matter. Predation seems to be the worst. When you look at a predator gobbling up the poor prey it not only looks so selfish but arrogant as well. The predator seems to think it can do a better job with the matter the prey is holding onto. The predator thinks the prey is not worth living and can part with the matter. If you look at the world economies the acquisition of companies by others is a predatory activity that occurs regularly. It is accepted as quite normal. To me it looks like the predatory company decides that it can manage the prey company better. What the predatory company actually is seeking the resources the prey company has. In fact, the governments and capitalists are constantly looking into ways of laying their hands on the meager wealth you and I may have!

Since Darwin, people have started calling some of the most extreme forms of selfishness by the magic phase 'survival of the fittest'. Any form of 'cut throat' tactic goes in the biological kingdom under the respectable term called survival. Darwin's theory legitimized such behavior.

Our planetary resources are utilized in such an efficient manner that will put human resource management strategies to shame. Matter is never static. Matter is never allowed to go waste. Matter is never allowed to concentrate in localized regions longer than necessary. Nature likes to spread the matter evenly across the planet so that the user will find it everywhere. Added to the movement of matter, the users of the matter move as well. The term 'user' refers to any bio system.

Movement of matter from one point to another is achieved by nature through a variety of mechanisms. Either the matter moves in search of users or the user moves in search of matter. It is happening always. It is marketing at its best. Our colonial history is a depiction of the same natural phenomenon. Colonial empires went in search of useful commodities that they did not have.

If you take a quick look at our own commercial marketing strategies you will find movement of commodities of all types to the place where it will be wanted. This ensures wider utilization of things available only locally. What use is it for a country to grow tons and tons of surplus grains? What is the use of having millions of barrels of oil, which you know cannot be used all by yourself? Commercial arrangements of our society help making such commodities available for the population living in faraway corners without them.

Ownership of property is a concept alien to nature. All matter is for everybody. You cannot own anything forever inside a life system which is a principle quite antagonistic to capitalism. When man learnt how to construct a social order based on a ruling class there was a possibility for creating laws that protected the 'owner'. All the property laws and the concept of ownership is relatively new because for most part of recorded history (within the past 5000 years or so) everything was owned by the ruler only. There was no private ownership. The concept of private ownership must have come about only when democratic institutions made their origins. Until the laws were made to protect private ownership people could not become capitalists yet. I would be surprised if these ownership laws came much before 15th or 16th century.

A predator makes a hostile attempt to take over the matter accumulated by a prey organism. The matter was owned of course by the prey life system as it was hard earned by it by feeding over its life time. But, within the body of that prey organism all the constituent cells stake an equal claim on the total matter content. No single or group of cells can claim priority to anything.

Our human body is said to contain about 100 trillion cells. This is infinitely more populous than the whole planetary population. I could say almost 15,000 times more number of cells prevails in a single human body than there are humans on the entire earth. With such a paltry number of 'cooperating' humans we could not manage our planetary resources in an equitable manner. This is the problem with our economy. Do you see what I mean?

Man has always explored continents hoping to find things he can use as well as finding a place he can live. He has done that even before he had reliable means of transportation. History is replete with explorers who went in search of metals, spices and what not. Man does not even want to leave the icy Antarctic. People talk of colonizing other planets hoping to gain access to matter and space there!

Do we all continue to hold onto the same set of molecules that we received at birth? That is far from true. We do not retain the same molecules even for a short time, let alone until our death. The molecules of our body have their own life spans. In other words, they 'die' at the end of a fixed amount of time, which is variable depending on the molecule.

What is your wealth today becomes someone else's tomorrow.

Studies with radioisotope-labelled molecules have changed our concept of the longevity of molecules in bio-systems. The principle of these studies is to administer a radioisotope-tagged molecule to an individual. Then his body is checked at periodic intervals for the quantity of radioisotope-tagged molecule remaining in the body. It is found that the concentration of the radioisotope-tagged molecule steadily decreases over time. This is because they are lost in the excretions or simply broken down into other forms.

New molecules are synthesised to replace the lost ones. The body continues to have the roughly the same number of molecules but they are not the same ones. It is exactly like what happens with respect to the population of a country. The population of a country may remain the same but the individuals are not going to be the same all the time. People die all the time. The newly born babies replace the dead. The total number of individuals tends to remain the same. Do you see what I mean?

Protein molecules in the liver have a life span of about 10 days. Hormone proteins in the blood have a very short life span of about a few minutes only. Proteins in the muscles live for about 180 days! They are the longest-living molecules inside our body. The turnover phenomenon applies to every molecule in our body, including water molecules! Even water gets replaced! Don't you keep drinking new water every day while also losing water as urine and sweat!

It has been calculated that on an average all the molecules in our body are replaced once every 23 days. This means you change chemically every 23 days. A new person is born every 23 days though we keep claiming that we live for 60 years and 70 years and things like that.

The molecular turnover is not only seen at the level of the individual organism. Living matter of the entire biosphere can be renovated every 8 years on an average. The matter of land plants is renewed once every 14 years. The entire mass of the living matter of the ocean alone can be replaced in 33 days. The plants of the sea have their molecules turned over once every day.

Atmospheric oxygen is replaced in several thousand years whereas carbon di oxide once every 6.3 years. The global cycles of nitrogen, carbon, and phosphorus last millions of years.

The molecular jugglery is an inevitable part of the existence of living systems. The amino acids that come into your body today may have been a part of a chicken, goat, or pig yesterday! Tomorrow it will be temporary property of lowly microbes or other animals!

If you look at our own economy the money in circulation changes hands hundreds and thousands of times within a short, defined period. You may hold onto a hundred dollar bill today but once you buy something the note changes hand, gets passed on to the second, third, fourth customer endlessly. The money that you had has been spent but the note still remains in its own value but with a different owner. Even the different owner does not hold onto the bank note forever. At some point it is going to change hands. More or less, the same principle applies to turnover of molecules inside living systems. The molecules keep changing hands!

The nature's economy has something unique not seen in our money economy. There are no private investments inside life systems. No cell saves its surplus energy currency individually. All surplus energy currency available to the body is stored as energy depots in the form of glycogen or fat stores in common locations. This is like a public granary to which every cell in the 100 trillion has equal access. What a striking contract to this appalling world economy where 1% of the 7 billion people amass billions and millions of dollars when the majority of the world population is battling with a standard of life that is hardly between hand and mouth. And you want to listen to economists from Harvard and the like how to revamp the modern economy and help avert economic crises!! We are far too much caught up in this mess and I am absolutely certain we are going to have to change the way we do economics. A newer model has to evolve to make the system fair and square for everyone.

People accumulate energy wealth by eating more than they require. Or they eat nominal quantities but do not spend the energy currency on work. Both ways the outcome is the same. You find these people struggling to keep themselves in energy balance. The worry is that there are hundreds of millions of people fitting this profile. They are just average folks who are earning average income. On the other side there are billions of other people on the planet who are constantly in negative energy economy. They are the poorest who earn hardly anything and cannot buy the required amount of energy currency in the form of food. They go hungry. There is not enough fat 'money' in the body bank to help them either. That is because they have been forced into the state of insufficient food funds (hunger) for too long.

The funny thing is people who have access to more food energy than they can spend do something that does not match with their real money economic habit. They try to incredibly give it away for nothing!! They do not seem to want to hold onto the energy 'money' unlike their penchant for holding onto their bank notes! How do they do that? They go to fitness centers and pump iron to spend the energy surplus. They go jogging and walking meaninglessly running or walking around parks in the neighborhood. People in the neighborhood don't look at them like they are crazy. It is accepted in our society for people to aimlessly to run around or lift weights that do not need to be lifted. Majority of us in the world never do any physical work in our daily lives. What we think we have achieved by doing away with hard labor to earn our living we have substituted with the futile fitness routines that burns your food currency as heat. The conversion of useful food energy to heat is deliberate.

Why does not man give away his surplus real money to others instead of saving it in his high street bank? Why is he interested in only giving away the food energy surplus? This is because nature punishes those who amass too much food energy. The modern economy respects such unjust behaviors by treating the rich with more recognition than afforded for the poor souls. In fact most people constantly work towards the goal of money excess. Even after achieving a reasonable degree of money surplus still people do not want to stop.

How does nature punish the greedy food energy hoarders? This comes in the form of ill-health. The obese people end up with diabetes, hypertension, arthritis, gall stones, heart diseases etc. Eventually it impacts on the longevity of the persons. Is there a lesson we need to learn here? Surely, the nature seems to tell us something which business schools don't!

# CHAPTER 3

### BASIC STRUCTURE OF ECONOMY

Our current model of economy is based two major things. One is the availability of money that can be lent. The other is availability of suckers who want to borrow that money.

The lender of the money is no fool. He didn't make that money so he can give it to you for free. He not only wants that money back but with a profit.

The borrower needs the money for various things. Because he is helpless and desperate he is accepting to pay the lender an interest as well as pay back the lender the capital. The borrower may need the money for buying food, buy clothes, pay his bills, pay for his house, pay for his business, or pay for some luxury.

The fundamental driver of economy is a transaction. It requires a seller and a buyer. Both agree to exchange a good, service or a commodity for a price. When you spend 10 dollars on something you are poorer by that amount whereas another individual is richer by the same amount. Wealth is only transferred and not destroyed. If there are 1 million types of items or services to be sold then there are potentially 1 million transactions possible. That makes the whole thing huge. If same item or service is available in more than 1 quantity then the number of transactions multiplies proportionately.

The seller or buyer can be an individual, a corporation or a country. The process underlying the transaction can be simple if it is between two individuals. Whereas it can be more complex if it is between two countries. The sum total all such transactions is the productivity of the country called the Gross Domestic Product (GDP).

When more of such transactions take place the economy is in full swing and we call it the boom cycle. When less of such transactions take place then we call it the bust cycle. The boom-bust cycles typically have a frequency of 5-7 years. Every 60-70 years the economy snowballs into deep recession which is also referred to as Depression.

The boom-bust cycle having a frequency of 5-7 years is related to the short-term debt servicing duration. This is also known as the short-term debt cycle. When someone borrows money today he goes on a spending spree causing the boom. That same individual will soon wake up and realize he has debt service payment that he has to make and more importantly has only 4-5 years to repay and so he starts contracting his spending. When thousands of people start doing the same the economy of the country follows this boom-bust cycle in a remarkably similar, predictable pattern. Do not forget even the government will face the same compulsion to meet its debt obligation.

When the economy contracts the Central Banks lower the interest rate to lower the cost of borrowing to ease the pressure of debt repayments for both the individual and the nation. When the economy is in the boom phase the interest rate can be raised to curtail reckless borrowing. The Central Banks can also print more money when the money in circulation is low to make credit available easily to stimulate the economy.

In the ancient past mankind was living no different from an animal. Their needs were primal. You needed food, a mate and a cave to live. There was nothing called luxury. There was nothing to buy. You found your food by hunting. Money did not exist. There was no lender or borrower. All were equal. Nature's bounty was available for all.

Money was created at some point in time in various forms and shapes. Money as we know it did not get invented overnight. The concept of goods of monetary value came about when man stopped being a hunter gatherer and resorted to agriculture. Why?

Agriculture was invented around 8000-10000 BC. So we can safely bet the system of assigning value for goods came about only after this. So economy is only a 10,000-year old concept. That is fairly young considering origins of Homo sapiens almost 200,000 thousand years ago.

Our world is all the time evolving. Things keep changing for the bad or good. Lots of things are in constant change mode. What is today does not mean it will be the same tomorrow.

Mankind has been experimenting with so many social changes over the millennia. We will ignore what happened before he changed from being a nomadic, hunter-gatherer to a settled life. We will focus only on the last 10,000 years when he presumably settled down forming large communities.

Man has tested with various forms of political structures in the last 10,000 years. Countries as we know today did not exist first. Democracy is something new and still we have quite a few countries where democracy does not exist. Democratic political structures have been preferred as the better form of political governance of people but we do not know that yet. It has been around about 2000 years originating in Greece but we do not know what is there for us in the future. We have moved on from a simple head of a clan to village heads, city-states, Empires and so on. Monarchy has almost been discarded as a political leadership but do not forget for almost 5000-6000 years this was the rule.

The reason why I used political governance as an example is to show that our monetary system is also subject to change. In fact it has changed so much in the last few thousands of years and it is foolish to think that the economic system we have now is permanent.

I remember reading a book by a renowned economist about the end of the money. He argued forcefully that money that we associate with bank notes will cease to exist. We, in our lifetimes, have never known anything other than bank notes and coins. So it is a bit shocking to hear such predictions that, unfortunately, are not unrealistic considering the way our economy has evolved. We may be deluded in thinking that what we have today is set in stone and immutable. Remember things can change so fast and history is replete with examples.

It is said that mankind has experimented with various forms of currencies since the origin of economics. Literally thousands of currencies have been used and all of them have perished having lost their value.

When man knew how to grow food he had hit upon a windfall idea that will for the first time in anthropological history allow man to reach a food surplus situation. Domestication of animals for meat and milk was equally big.

Surplus goods situation opens the door for new possibilities. That is what happened thousands of years ago. You needed to do something with it. But thousands of years ago there was no concept of a market where you can sell something. There was no concept of money either. What would you do?

Man disposed the surplus food by giving it away to workers who had taken up to new crafts and or contributed to society by doing other tasks like defense, building small communal structures etc. The concept of salary was born. But it was paid not in bank notes but as food in exchange for his services. The barter as a system of valuation of goods and services was born.

Barter continued for a long time in human history for the last few thousand years. It still does. Until the origins of quantifiable units of monetary transaction barter was the sole method of economic transactions.

Later banks evolved to take the place of the lender. In the earliest times i.e. at least 700 years ago and more, you did not have banks as we know them. Minting of coins was a Royal privilege and not for the private greedy. Many nations all over the world have minted coins of various denominations and value over the history. Bronze, Silver and Gold coins with different engravings of kings and Queens have been in use across millennia. When you go to a museum and see all those ancient coins it is so exciting to think that those coins had value sometime in the past but no one would attach any value to them today as a unit of transaction. Economy does change and that is what I am talking about. Tomorrow's economy will be different when today's rules may be irrelevant including your bank notes. It has to be because the economy of today has failed to see the benefits of all concerned and has focused too much on the purses of too few people on this planet.

It is likely that the concept of lending and borrowing must have started when the prototype money of some sort was accepted in the society. It is also likely that earliest form of lending was not institutional because banks were non-existent. People could have borrowed from friends or neighbors and there are historical records of this borrowing and lending and the punishment for failure to settle the debt.

Even now we do see some form of local lending by private people in small communities. There are also small lending organizations like Credit Unions and Cooperative Societies. People become members of this kind of Cooperatives and pay some sort of monthly subscriptions and the collective money is made available as loans to those in need. The concept is no different from the banks. In a way the modern banks collect the money from small depositors and the accumulated bank deposits are loaned to ordinary people as well as big businesses. The rich people who want to expand and diversify their businesses seek loans from the banks. The banks like to loan the money to such businesses because they can keep the money from idling in their banks without creating profit. Of course they do not mind to loan people of ordinary background too.

The banks are now overzealous to lend you money and that is why their sales staffs keep calling you on your phones to take their credit cards and loans. But they will still verify if the borrower has any collateral that can be used to guarantee the return of the lent money. Or, the borrower should show adequate proof of regular income that will be used to repay the debt. When banks lend money to people without ascertaining their credit history then they risk your deposits. But for the bankers the short term sales statistics means good bonuses and they willingly take risk with your money. This is the basis of the sub-prime mortgage crisis that happened in the US that rocked the financial world all over the world.

Banks also invest the deposited money in stocks and equities and the returns on those kinds of investment can be dependent on the level of risk taken by the investment bankers as well as the global economy. A sudden crisis in the financial world happening in any part of the globe can erase a chunk of your deposited money and the loser is not the bank.

What will happen if there is not enough money in the banks? This may be because people did not deposit money in the banks and this is likely to happen in countries like US where people spend all their money and save little. In Asian countries people have the habit of saving for a lot of important family-oriented expenses like children's education, marriage expenses for their children and also for their old age. So, the banks in these countries are always likely to be well-stocked in money. So, the risk for the depositor is less because the bank can always find the required money to repay the investor. Again if all depositors rush to the bank at the same time, due to some fear of a financial crisis, then even Asian banks cannot do much except default. They will not be able to get all the loaned money in such quick time to refund the depositors. Banking history of the last few centuries is awash with such sudden panic exhibited by depositors that made the banks default. In fact such crises led to the origins of much more new banking structures like Central Banks.

When such bank defaults are about to happen the Central Banks and/or the government intervenes and injects more money into the banks. This money can be coming from newly printed cash or the government could borrow from the banking cartel to give more money to the failing banks. And the consequence will be that the government will have to find a way to service that debt. Billions of dollars have been infused into the banking system during the US economic crisis recently. It is said that almost 2 trillion US dollars was printed and distributed. Who prints the money in the US? It is the Federal Reserve. Who runs the Federal Reserve? It is the private banking cartel. So, the private banking cartel printed the money which they lent to the US government on a returnable basis (of course with interest). Can you start seeing the ludicrous nature of our modern economy?

Even governments borrow money. They do so to fund development projects or to finance the wars. Or, the governmental borrowing will be used to repair the war-torn country and reboot the economy. Centuries ago governments even borrowed from wealthy private financiers. The Rothschilds family is one such. The chance of getting the money back was great because the government can recoup the spent money from the plundering of the defeated nations. Or, the governments agree to give the private financiers opportunities to invest in the defeated nation and perhaps plunder them too. Even if you did not have enough from the loots still you can always increase the tax. Can't you? So, reckless spending is not always the forte of bankers. In fact, deficit spending is one of the main factors that brought down empires. There are thousands of historical examples to support this claim.

Governments also borrow money from ordinary people. How can ordinary people finance the needs of nations? This is accomplished by way of issuance of government bonds and securities. People can buy these bonds in small quantities too. Of course the big investment houses invest a lot in this. Even foreign countries can buy the bonds issued by the nations. For example China has bought almost 2 trillion dollar worth of US Treasury bonds and the Saudi Arabian government has bought 0.75 trillion dollars.

In a way this kind of issuance of bonds is no different from issuance of stocks and shares by private businesses when they try to raise the capital for their new ventures. As I said earlier the rich businessmen always are on the lookout for new wealth and they want to diversify into new areas. The money for these ventures can be sought from borrowed loans from banks and also from such issue of shares to common public. So, it is not as if the poor are the only borrowers. Even the rich keep borrowing all the time.

It is said that the total debt of all nations globally is as much as 164 trillion US dollars as of 2016!! The debt owed by countries may vary and the assets held by the countries also vary. As a proportion to their GDP the developed countries have borrowed more than the low GDP countries! In total if you calculated the global GDP (which is roughly 72 trillion US dollars) the global debt is about 225% of the global GDP! Most respectable banks and lending organizations aim for a debt level of less than 50% of the income for individuals. Doesn't this rule apply for the nations? US government has been lately seeking Congressional support to raise the debt-GDP ratio to higher and higher levels so that the law would allow them to borrow more! IMF says that the debt levels of middle-income countries are only about 50% of the GDP and for low-income countries it is less than 40%. So the culprits are the high income countries. The debt to GDP of the US is 108 to 123 %! China, Russia and Australia have less than 25% debt ratio! If you look at US as a major culprit we have to also remember that the US is the largest consumer of globally manufactured products and therefore there are many businesses around the world that depend on the US consumption to keep them financially viable. Looking at the statistics on debt levels it appears that the US are spending just like those individuals who keep buying things on their credit cards and time will be reached when the cards will max out and then what will happen? Individuals can declare bankruptcy. At the national level the government will default on its payments and planned developmental projects. Loss of trust will panic the public and the businesses. The nation's inability to pay for goods imported goods means that the loss of revenue will hit the nations doing business with this country and it will have a domino effect. Then there is the usual recession.

Please note that all the debt ratios we are talking about in the previous paragraph is the public debt. This does not include private debt - the debt owed by private individuals. If you start counting the debts owed by you and me as individuals the figure could be staggeringly high. A report by the Oxford Economics says that the household debt to GDP ratio has steadily increased since 1980 to the current level of 75 to 125% in advanced countries. In emerging economies the private household debt to GDP ratio is between 15 to 30% only. One estimate puts all governmental and private borrowing at 215 trillion US dollars. Of this a third has been borrowed in the last decade only!

If you add up the governmental public debt and private debt together then you start wondering about the stability of the world economy. If private individuals default on their debt then the lender will start suffering and before you realize the domino effect could bring down many banks and with it the global economy. The same applies to the governmental debts. This is even worse because it will erode the market confidence severely and will cause ripples in the entire global economy.

It is likely that some countries try to print more money to tide over such cash crunch. But in financial terms it leads to inflation wherein the money loses the buying power steadily. There have been instances when some governments have followed such bad policies of releasing newly printed notes to that extent they were no more worth than the toilet paper?

Some economists look at inflation as an indirect tax due to governmental fiscal policies. What you can buy with 100 dollars today will require 1000 dollars in 10 years. Who is responsible for this? Do we realize that we have lost the values of almost 900 dollars of hard-earned money? This is no different from the rising taxes which leaves less and less take-home pay for you. The government has indirectly taken away 900 dollars from you because of the inflation it created. Nobody seems to care about it now because it will have its effect later. On the contrary if a government levied a tax now there is outcry almost immediately and so the governments have learnt how to tax you in round about ways. We, being the suckers we are, think we have been smart with our money.

How much money is out there in the world now? The actual physical money like bank notes, coins and bank deposits total to about 40 trillion dollars. Other forms of money that includes not the physical money but other easily accessible money (like electronic currency issued by banks in the form of credit cards and loans) may amount to about 90 trillion dollars. If you count the investment in gold and derivatives and stock you are looking at Quadrillions presumably. Because funds invested in derivatives alone totals about 644 trillion US dollars. Stock investments total to about 73 trillion US dollars. Investments in real estates are a 'paltry' 29 trillion US dollars.

If you look at the global asset distribution it is worth noting that only about 40 trillion US dollars are real cash money. The rest are all either electronic money in credit cards and loans or imaginary money held in stocks and derivatives.

I said stocks and derivatives are imaginary money because their very nature is such that when someone buys stocks and derivatives you do not really know what you are buying. They are just pieces of paper or a computer entry indicating a value that has been constantly manipulated by traders.

A derivative is a financial instrument used for a number of purposes. It is one of the three main categories of financial instruments that include the other two - stocks (shares or equities), debt (bonds and mortgages). Most common derivatives include options, futures, forwards and swaps. These products are used to insure against price movements or to increase exposure to price movements for speculation. Derivatives are contract between the two parties specifying certain conditions such as dates and resulting value of the product on the specified date. In simple terms the two parties agree to a fixed price for an asset at a specified date in future. The classical example historically is an agricultural commodity. It could be anything like corn, cotton or olives etc. In fact the asset can even be stocks, bonds or currencies. You fix a price for a currency on a specified date and you pay the agreed price irrespective of the price fluctuations or the prevailing price on that date. This agreement is made in the past for a future transaction which effectively insures the buyer and even seller against price fluctuations. By agreeing for a price beforehand the buyer and seller have mutually protected themselves against the risk of too high or too low price respectively. This model is easier to understand with agricultural commodities. If you were a corn grower and needs to spend a certain amount of money and resources over a fixed period for the corn crops to grow then you need some sort of assurance that you will get a good price when you take the corn to the market. If the climate or other factors affected the growth of the corn so that there was less production then the price of the corn may be higher due to demand. If there was a glut in corn production then you will only get a lower price because of the oversupply situation. The farmer can't predict which way it is going to be. He may want the higher price but he can never be assured of this. Same way he does not want to sell at a lower price. So he takes a certain amount of risk and accepts a future price from a buyer who agrees to give him a certain price, irrespective of the market conditions, on a specified date when the corn is fully grown. This is a derivative contract.

The funny thing is that in a derivative contract the underlying asset need not be acquired. The concept of ownership when you buy something is broken. When people trade in commodities do you think the traders take home gallons of oil or tons of corn? No, they are simply interested in the price movements and they sell off the derivative assets without ever owning them. So someone sitting in a far corner of the globe can buy Corn or Cotton from a Commodity market in New York. The person sitting in Indonesia is not a farmer or a shop owner where he plans to sell the bought goods. The current economic model allows totally irrelevant people to simply buy and sell commodities, currencies, stocks on paper and sell it on paper influencing violent price movements and benefiting from them. In fact many commodity prices get unduly affected by such speculators rather than by market conditions or agricultural factors.

As I said earlier people have 'invested' this imaginary money of more than 550 trillion dollars worldwide.

The price of a stock can be 1 dollar today but tomorrow it could be 2 dollars or 0.5 dollars and these changes in value really do not indicate any tangible change in the concerned business but only a speculative drive initiated by a hungry trader and then other investors follow like a herd. If I say stocks and derivatives have no real values it may not be accepted in the current economic model but may be understood when there is a global recession which is not very far away.

The entire global wealth is much less than the book value of the financial instruments like bank notes, coins, deposits in banks, gold, real estate, stocks and derivatives. The alleged book value of derivatives is 544 trillion dollars as I said. The reality is that nobody really owns any asset in this derivative wealth. It is a contract between parties who have never met each other and who have no intention of exchanging goods for real money and who are geographically separated by continents. What kind of asset is this? Apart from booking some profits for some traders and speculators does anyone see real money here? The trader's account may get deposited the proceeds of these kinds of transactions but this is still electronically created money. This money was not created by the treasury by printing new notes. This is real imagined money that has some agreed value in the current economy but if someone sold all the derivatives today where are we going to find the 544 trillion dollars to pay the sellers? The funny thing is that people would have paid only a certain amount of money to buy a stock or derivative but the alleged growth in the value of the financial commodity shoots up the value for mostly unjustified reasons. If I had bought a share for 10 dollars 10 years ago and let us say today's value of it is700 dollars I am a happy man. But, who will pay me the 690 dollars? Of course the buyer of your share or derivative will pay you but if all sellers want to dispose of all their stocks and derivatives at the same time there is not enough money in the world to pay for it. This is the reason why this gimmickry keeps continuing. Do you see what I am talking about?

Lot of alleged wealth supposed to be floating about in the world is in the ethereal cloud. It could be as much as 4 -6 times the amount of real, tangible wealth.

Recently, in the last decade, people have become disillusioned with bank failures in the US and created cryptocurrencies like the Bitcoin. As I said it is the shock doctrine. One anonymous Japanese inventor published an article on the Bitcoin and the Block chain technology in 2008 outlining mathematically how transactions can be made online using a totally new currency. When in shock people behave irrationally and arrive at ideas and solutions that do not make any sense at all. It was invented to support online payments bypassing the banks. As you can imagine it has no intrinsic value but is a means of an alternate currency that does not need a bank. You do not need a bank or the Treasury to 'print' the cryptocurrencies. The point to be noted is that this cryptocurrency concept made its origins shortly after the US crisis.

The problem is that people have created a cryptocurrency for a purpose imagining as if the real currencies we use are not Cryptic themselves. To me the actually currencies we use like credit card debt, loans, mortgage loans are all as cryptic as the bitcoin. They are all unreal, imaginary, artificially created numbers in the computers. Yet, people have created another layer of these virtual currencies.

Early 2018 it is said the Bitcoin suffered a collapse in the price (not unexpected for the so-called currencies issued by the banks also) to the extent about 550 billion dollar 'value' was erased!! My question is when did the imaginary currency (Bitcoin) ever have any value in the first place?

End of 2017 a 19-year old Russian programmer created a new cryptocurrency called 'Ethereum'. The name is highly reflective of these kinds of virtual currencies which I said earlier that they exist in 'Ether' and not in the real world.

There are about 1500 cryptocurrencies now in the world. The Ethereum started at 10 $ and went up to $ 1400 before 'crashing' to $ 800!

Bitcoin has been around since 2009 and if you had invested in Bitcoin at that time now you could be looking at $168 million! It has grown almost 18,000 per cent in last 1 year! It had peaked to $20,000 in December 2017 but fell to less than $7000 in early 2018.Nouriel Roubini, the Nobel prize-winning economist slammed Bitcoin as the biggest bubble in history whose value is destined to fall to zero. The volatility of the cryptocurrency is very high compared to other regular currencies. If you were to order a cup of coffee and if you are trying to pay with you bitcoins then the exchange rate of the bitcoin would have changed in between the short time between your ordering and receiving your order!

Just a few years ago when someone tried to demonstrate how bitcoins can work for paying for everyday items an order was made for a pizza in Chicago. The bitcoins were totally new at that time. So, the payer had to shell out 10,000 bitcoins for that pizza. Because bitcoins were unknown with no value it took 10,000 bitcoins for a pizza (probably worth a few dollars). The idea was to demonstrate that it works. The point to be noted is that today each bitcoin is worth almost 10,000 dollars and each which means that guy who demonstrated the bitocin trade a few years ago would have been richer by 100 million dollars if he had simply held on to those 10,000 bitcoins he paid for the pizza! That must go down the history of mankind as the most stupid purchase of all time! This incident illustrates how ridiculous the whole valuation of an imaginary currency like bitcoin is. Today bitcoin radicalists have made huge fortunes from nothing. They go about preaching the bitcoin virtues trying to encourage people to start using it. Many conferences have been held on the topic of cryptocurrencies to legitimize them.

The point to be noted is that the bitcoins have joined the bandwagon of investment gambling as it is traded as a commodity. Speculators have started doing the same thing they did with other currencies pushing or down up the value for no tangible reason. A bitcoin is now worth more than 5 ounces of pure gold? That speaks for the stupidity of the whole idea of cryptocurrency.

The inventor of the cryptocurrency has not been identified till date apart from the name of the publisher of the article. Why is he remaining in secrecy? Is it because he is afraid that banking cartel may hit him because he has found a way that may prove to be a new monetary system of the future where the banking cartels cannot make their billions as middlemen in all transactions? It is also worth noting that this anonymous inventor of bitcoin has not done it for free. He has ensured that he will get 5% of all bitcoins ever created over time. In other words, he has charged 5% fee for all bitcoin transactions which are no different from the fee charged by VISA and Mastercard and your banks. He has not acted on a noble cause after all. He has made sure he will profit as well. What is the difference between him and the banks? If he gets 5% of all bitcoins made he is likely to be the next richest man on earth.

A global bank in Spain has issued the first cryptocurrency loan in 2018! Goldman Sachs has also plans to introduce a derivative product in cryptocurrency wherein they will help investors to enter this market.

I think cryptocurrencies are glaring example of how you create 'wealth' from nothing. They all exist in computers only.

For that matter even the bank notes printed by the Central Banks are like this anyway. Even they have no backing whatsoever in case of a fall. You may be ending up with even bank-printed notes turning to be as cryptic as the cryptocurrencies.

The advantage of cryptocurrencies is that they bypass a middleman in a transaction. This is why the banks are scared. If you take a normal credit card transaction the issuing bank still depends on the Mastercard and Visa firms to charge the customer a fee. The seller and the buyer are forced to go through two financial institutions both of them charging you money for the transactions. The cryptocurrencies do not need the middlemen. Is that indicative of a good thing or a bad thing? It may be good for the user but bad for the banks. Aside from this consideration is the concept of a cryptocurrency a stage in the evolution of the economic system or a glitch in the system that will die out soon?

The real wealth is supposed to be around 200 trillion dollars in the form of bank notes, coins, bank deposits, gold and real estate worldwide. On that basis we do not have enough real money to pay back all the debt - public and private debt. As I said the public and private debt owed to the lenders exceeds the global GDP by about 4 times. How are we going to repay them all with just 200 trillion dollars?

The lender lends the money hoping for a profit which is paid in the form of interest. Sometimes excess borrowing can be curtailed by raising the interest levels so that people do not over borrow. Curtailing the spending spree is required not just for private household but also for the governments. Shrinking the money supply by raising the interest rates may also shrink the economy by affecting the purchasing power of people who are the consumers for a number of commercial products and services. If people do not buy then many businesses will go bust further reducing tax revenue for the government and loss of jobs. The domino effect will end in a recession.

Sometimes there is little money available for people to borrow. This may be because banks do not have money to lend or the available credit has all been taken up. Our society has seen this kind of situations too frequently. Lack of credit affects personal individuals as well as businesses looking to set up or diversify commercial activities. Even governmental projects can be affected if there is no credit available. Organizations like the World Bank were formed mainly to make such credit available to nations worldwide to help build infrastructure and boost the economies. It is a different story that Western countries have used this as a tool to twist the arms of the poor borrower nations to doing things that will suit them. As I said even Central banks were created by many countries to facilitate money flow.

So the driving force for our modern economy is that money should be available all the time at a reasonable cost. In the past i.e. as recently as about 50 years ago the concept of credit cards was new. Nobody knew what a credit card was. As late as 1970s women were not even able to get a credit card without the endorsement from their husbands or fathers! Today credit cards are so rampant and people recklessly spend the money on things that really are not vital for survival. Money has lost its meaning from buying goods and services of value for survival to one of luxury and comfort. The consequence is that the debt had tripled in the last decade globally.

With regards to the money people really spend almost 95% of it is not real money. Before the advent of credit cards and smart loans from banks (and there are myriads of them) the money meant bank notes and coins printed by the government treasury or the authorized central banks. I said a little while ago that such real money that is circulating in the world is only about 30-40 trillion dollars. A study showed a few years ago that the real paper money in circulation in the UK is only about 3% of the overall 'money' in circulation. That is the amount of money printed by the Bank of England. Where did the remaining 97% of the money come from that everyone seems to be using? Does that sound intriguing? The same situation applies to other countries as well including US where the real money in circulation is only about 3 trillion dollars whereas there is something in excess of 50 trillion dollars as electronic money. That is why people should wake up to the fact that the economy is purposely shrouded in mysterious and difficult-to-fathom designs that the average person has no clue about the most essential commodity in his life i.e. the money.

The average man and woman have no clue about the origins of money. Several surveys have been conducted randomly asking people about the concept of money and where it is coming from. The typical answer will be 'money is something we use to buy things', 'money is printed by the government', 'money is earned by working' etc. They do not know the back dealings of financial institutions. They do not realize that the simple sum do not add up. If the money that is printed is limited and if all the money is lent where is the money going to come for paying the interest? If the government or a private banking cartel printed 1 million pounds and lent all of it the expectation is to make about 5-8% profit as interest. That will be about 50,000 to 80,000 pounds. If there was only 1 million pounds money was printed where is the new money going to come from to pay the interest? How can ever the interest money arise? Do you see the absurdity of the whole lending game which is what economy is all about? If all the lenders asked for repayment of their capital along with interest simultaneously worldwide there is not enough money to do that. That is the truth. The trick is in moving the currency across multiple times between people and between banks when the spender makes a purchase or something when your bank pays the bank of the seller. Even if it was a single 100 pound note it gets circulated probably 100 times every day changing hands every half an hour or so. So a single 100 pounds looks like 100 x 100 pounds = 10,000 pounds. You see the picture now, don't you?

So, even if the amount of money printed is 1 million pound it feels like 100 million pounds because the same money is used 100 times in a short period and over a longer period this gets magnified even more. This money magnification allows the payments of the profits to the lender in the short term. In the long-term it cannot add up.

The printer of the money (or minting of coins in the olden days) used to be the rulers of the state. In the ancient times what kind of guarantee was there for assuring the owner of the coin for the value of the coin? If someone did not honor the coin then what happens? There was no financial regulatory authority in the ancient times. The problem was solved by minting the coin in precious metals like gold and silver or even bronze and so the owner of the coin can still get the value of the coin back. Today's coins are made with cheap metals and you cannot do that anymore.

The bank notes printed by the authorized banks say in writing that the bearer of the note will be assured the value of the note. This is signed by the Governor of the Central bank and the note has the picture of the king or something to give the feeling of more assurance. The American currency even says 'in the name of God' and I am not sure how finance is related to spirituality. I suppose the logic should be to instill some hope in the minds of the gullible public that they will get the money's worth back because the private banking cartel has invoked the God the Almighty!. Little do they realize that the banks have been exempted from keeping the equivalent value of gold to the amount of printed money as safe deposit! This gold deposit, until mid-1900's, guaranteed the public that if they wanted to surrender the notes back to the bank they will be repaid in the equivalent value of gold. But this standard has been removed to allow banks to print more money than they can ever pay back to the public. History has seen public rushing to the banks to get paid back in gold and there was not enough gold and the king had to intervene. So, if you thought the money that we all seem to have was real and assured you need to change your opinion.

If the government or authorized banks only can print the money then how come there is 'electronic money' to the tune of 97% more than the printed real money? This is the way banks have used the back-door entry to 'creating money' even if they cannot issue bank notes. For instance HSBC or Barclays banks cannot print bank notes but they can sure issue credit cards and loans. If an average individual gets 25,000 pounds of credit in his cards and another 25,000 pounds worth of loans and 200,000 pounds worth of mortgage then the concerned bank has created 250,000 pounds of 'electronic money'. You may be imagining that this is all real printed money. Because you were able to use your card to withdraw cash you really thought it was indeed real money. But the reality is that this money has only virtual existence. Can you believe that?

No one is ever going to withdraw all of the 250,000 credit as hard cash to spend. That is the trick. The majority of the credit has gone towards the payment for the house which means it is not the money that you will ever use as real paper money. The remaining 50,000 pounds will be used as hard cash only maximum 10% and the remaining will be spent as 'virtual' credit card or debit card transactions. The banks need not issue any real hard cash to the seller or service provide on your account. The payment will be made virtually to the bank of the seller or service provider. It is all digital transaction. This way the banks will be sending or receiving millions of transactions between fellow banks without ever needing to issue hard currency at any stage. This allows the banks to not only offer more and more profit-generating credit but also get a chance to charge about 2% service fee for credit card transactions. If you were to use your credit card for withdrawing cash then you will be charged a much higher interest than the already high interest rate. This way the banks make sure this virtual money never needs to become real money because there isn't enough money in the bank to do so.

I am sure you people have been using credit cards and loans but have you ever thought about the elaborate design of the economy machine? The point to be note is that the banks are expected to have only 1% of the value of the loan as reserve cash to satisfy the Central Bank regulations. If they were to lend 10,000 dollars then the bank needs to deposit only 100 dollars to the Central Bank for safe keeping! This makes it possible for giving away multiple almost 100- fold more money than they have. If only the banks were asked to keep entire equivalent value of the loan deposited with the Central Bank then it would hold the reins on the bank's frenzy to release more and more loans than what could be repaid back.

When the interest rates are down the cost of borrowing is less which is seen an opportunity for big corporations to take loans from banks. The banks ask the corporations to put in about 10% of the value of the commercial loan as down payment and will give away vast sums of money. The corporations use the money to buy assets like companies which they will sell later for a handsome profit. The company it bought and sold will be just changing hands while the workforce will continue to be underpaid with no improvement in their life style. But, the handsome profit made in the acquisition and resale deal will enrich the shareholders who live on the other side of the planet and who have no clue to what the company does. For most investors who bought the company stocks it is only an electronic entry or a piece of paper which they see as a way to multiply their wealth. The poor laborers lose out as usual.

The other consequence of lowered interest rate is that savers lose out as well. The low or absent interest rate is only good for the borrowers who will spend the money on things they could not afford to buy. But, the saver who puts his money hoping to get some income as extra cash will be disappointed to see nothing is paid to them by the bank. While the rich and greedy benefit from the Central Bank interventions like the lowering of the interest rate there are people who lose out for being careful with their money and saving it for the rainy day. Whichever way you look at it the current economic system is geared to benefit the rich and greedy.

The paper currency printed by the authorized banking cartel or government treasuries is like a claim check. When presented to the bank it is supposed to give back the value of the currency in gold (or any other intrinsically valuable goods like silver etc.). But, banks have conveniently and with the full support of the governments have ditched the gold standard. England abolished it earlier than the US. President Nixon announced in 1971 that the Federal Reserve will not honor the gold reserve rule anymore and that people cannot hope to get back the gold that was assured before. It is like a breach of contract and no one could do anything about it. Instead the US government manipulated the system such that all currencies of the world can be pegged (backed) by the US dollar. When dollar was doing OK it seemed a good idea to have a common standard against which the world currencies could be traded. With the rapid decline in the dollar value and alarming deterioration in US economics countries have now waken up to the fact that trading between countries in US currency is not a good idea. They have started ditching the dollar and started using other currencies including gold for their international trade. This naturally angers the US and they retaliated against Iran for doing so and introduced sanctions.

The major problem with the US is the deficit spending. The amount of money spent by US in unnecessary wars has cost it a fortune. The very design of the US economy since the Federal Reserve was created meant that it had allowed a private banking cartel to issue bank notes which the Treasury borrows. This is unfathomable by any stretch of imagination. Why would not the US Treasury print the notes instead of the Federal Reserve? Printing notes without the backing of gold means you are printing it from thin air. It creates inflation. People devalue your currency because it loses the assurance that is needed. Devaluation of currency is because people do not trust that the value of the currency can be redeemed because far too much bank notes have been issued without any backing.

In the case of US the assignment of Federal Reserve to create money meant that the US Treasury will end up borrowing it from them. This is like a loan! It will take 10 or more years for the US government to repay the loan with interest! Why would the US government do this? Wouldn't make sense if the Treasury printed the notes by themselves so that they do not need to repay anybody? The irony is the US government becomes indebted to a banking cartel and uses the money paid in the form of tax by the public to repay the money that it could have printed itself. It is hard to believe why one would do that. If only they had retained the right to print money within the US treasury then it could have helped avoid becoming indebted to a banking cartel. Not only does the government have to repay the capital but also interest on it. Assuming the amount of money printed and 'loaned' is a few trillion dollars then the US government has this debt burden and will have to automatically go on austerity measures affecting millions of citizens in terms of reduce healthcare spending, reduce educational support, and reduced social benefits. A generation of people living in the US will have to suffer because their government did not have the sense the printing the notes themselves rather than licensing a private banking cartel to print as much as they want out of thin air. Why couldn't the government do the same? In the crisis that happened in 2008 the Federal Reserve printed about 2 trillion dollars to loan to the US government which the government used to bail out financial institutions! Now the US government has got this 2 trillion dollar of additional debt to service!! Does this all make any sense? Even an illiterate person would spot the flaw in this arrangement and why would not the economists from top universities do something about it/ Why don't the people even talk about? This is because the system is devised such that people will not know the absurdity behind it. When I said the Federal Reserve printed the notes people would have automatically assumed that it is after all the US Government's central bank and so it is their job to do it. 99% of the people would not even know that the US Treasury has taken it as a repayable loan. The gullibility of people lets this sad state of affairs to continue.

The Jekyll island meeting in early 1900s to discuss the future of a Central Bank in the US was kept so confidential not only during the time of the meeting but for the next 25 years? Only in 1938, after 25 years after the Jekyll Island meeting, there was some leak of information relating what had happened when the private banking cartel met to formulate rules of the game that will forever enrich them beyond their imagination. Even now I understand that the ownership of the Federal Reserve is not easy to decipher except that you know that it belongs to the banking cartel.

US is not the only country that goes about printing notes from thin air. Even other countries do that. They have done more and more of it in the last few decades. Germany, for example, became so poor after the World War I obviously due to the war expenses. They had a huge debt to be paid back to France for reparation expenses and also to rest of Europe. Instead of defaulting on their payments Germany decided to print the bank notes instead. They printed so much of it and some of them in incomprehensibly large denominations! Even now a museum in Germany houses some of those notes. You cannot believe that they printed 1 million Mark currency, 100 million Mark and 1 trillion Mark currency notes! As of 1923 Germany was printing up to 500 Quadrillion Marks per day! Inflation hit the sky in Germany and people could not buy anything as their currency had lost its value.

I recommend that readers watch a 7-part documentary called 'Hidden secretes of money' by Michael Maloney, a US-based economist if you need further insights into the financial scams orchestrated legally by the governments worldwide and US in particular.

# CHAPTER 4

### HOW WELL ARE YOU LIVING?

In the book 'Contours of the world economy 1-2030 AD: essays in macroeconomic history' written by Angus Maddison and published by the Oxford University press in 2007 it is mentioned that up until the 18th century India and China were the two largest economies by GDP output. Perhaps the cotton, silk and porcelain trade contributed significantly to the high GDP in these two countries. With the rise of the industrial revolution things changed in favor of Europe particularly England.

The first real global economy is said to have probably started in China particularly during the Song Dynasty rule. We could say the same for even the medieval Islamic countries as well as England and the Dutch Republic. The main point to be noted in the pre-industrial economy is that the resources were obtained from nature such as plants and animals. Agriculture contributed a lot. Apart from the food that was grown agriculture also helped in the form of other valuable goods like cotton. Plants gave the timber that people could trade. The animals gave the wool, milk and meat which are saleable items. Chinese found the trick of obtaining silk from the worms and that led to the silk route paving the way for long-distance trade and real global economy. The rich and the Royals craved the silk from China. The Chinese also found a way to make Porcelain from clay! Chinese Porcelain was the winner in terms of commerce!

In short, the pre-industrial economy was agrarian (organically based). In fact, since pre-history our economy has always been like this. There was obviously a limitation on the size of the land available to the individual societies and the manpower needed to do the manually intensive labor in the fields. Remember this was before the era of iron tools and automation. Also do not forget that many countries were cold and snow-covered limiting the arable land mass. Some countries were dry due to low rail fall. These limitations added to the problem. So, in many countries the agrarian economy was just sufficient to meet the needs of the society at the local village level or within that vicinity. Throughout pre-history this situation must have continued which is often referred to as the Malthusian Trap.

It is said that the average person living in 1800 AD was no better off than someone living in 100,000 BC! In fact, bulk of the world population may have been living poorer! Even the life expectancy was no better in 1800 when compared to hunter-gatherers. The material wants for a hunter-gatherer was low and that required only small amounts of work. But, the comforts for people living in 1800 were aimed higher and they had to work all their lives relentlessly to meet the needs! Also, interestingly, it is believed that the forager had a diet and work life much more varied than an average English worker living in 1800 AD.

Societies that relied on hunting and gathering were egalitarian. Members of the society consumed the materials in a uniform manner with little variability between members. But, by 1800, the agrarian economies that dominated the world in 1800 had led to pervasive inequality. There were the rich and the poor. But, the differences were not as striking as today. It can be concluded that material life and welfare actually declined from Stone Age to 1800 AD. They could have easily been better off staying hunter-gatherers.

Industrial revolution that started after 1800 AD changed the possibilities of material consumption. Per person income grew in a sustained manned in some countries. In some countries the economy was 10-20 times wealthier than the 1800 average.

Life in years before 1800 perhaps was based on natural resources which meant that the people were dependent on the same factors that determined the living conditions of both animals and man. This is the Malthusian Trap, an insight attributed to Reverend Robert Malthus who lived in the 18th century. He wrote 'An Essay on the Principles of Population' which attempted to look at the logic of the economy that prevailed then. There was an attempt to correlate the population levels to material living standards. This is perhaps still applicable I guess. The material conditions available for people living in highly populous countries like India is pretty low compared to others though India has a huge GDP.

Malthusian economy states that war, violence, failures in agriculture, poor sanitation and bad public infrastructures as factors that will reduce population pressures and therefore increase material living standards. Because the material living in the era before 1800 relied almost exclusively on finite natural resources and therefore was unable to support a population beyond some critical numbers. In the modern economy these are exactly the factors that are the enemies of prosperity.

It may be true that small group of elites had a good life style in the pre-industrial era but most were living like Paleolithic ancestors. You had no access to running water, electricity, good sanitation in crowded places simply because they were not there. Culturally and genetically man was evolving. Agrarian revolution allowed him to at least settle down in a place which by itself led to a number of social order-generation tools. Economic order is one of them.

One major limitation in the pre-industrial economy was the energy available to do mechanical work. This had to come from the limited population that lived in a given geography. This limited population had to rely on plant food energy or the animal produce (which in turn relied on plants for food). So, the solar energy captured by the plants by photosynthesis to make 'food' was in turn used by man to do mechanical work. Travel over long distances needed horses which needed the plant food as much as the man. These factors simply made long distance travel prohibitively expensive and long. The economy had to remain small by compulsion for far too long. Sea offered a less expensive option using wind energy and seafarers indeed used it for trade for millennia. Even then the products and profits were limited to a select few adventurous kind.

Organization for Economic Cooperation and Development (OECD) released the Volume 2 in 1998 wherein, apart from various other statistics, was shown a typical household expenditure of a family which lived in England in 1698 and 1996. It makes interesting reading. Food expenses accounted for 25% of the family income in 1698 whereas it was just around 6.5% in 1996. Beverages and tobacco accounted for almost 14% while it was about 6% in 1996. Clothing and footwear amounted to almost 20% of income in 1698 while it was around 3.7% in 1996. Rent was less than 5% in 1698 while in 1996 it was twice at 10%. Transport and communication costs were less than 1% of 1698 family income while it was almost one-tenth of the whole income in 1996 (must be much more now in 2018). Education, health and recreation were each less than just one percent of the income. In 1996 it was between 5 and 6% each.

What does the above comparison tell us? It clearly shows that capitalistic mass production of food, beverages, clothing, and footwear in 1996 has lowered the prices so much for these items. In 1698 people would have had to struggle to grow their own food or pay a lot for it as it was produced by hard labor by a select few. The same applies to other consumables. In the modern world these items are produced in labor-cheap, poor countries by capitalists of the western world. The costs of items have come down dramatically not without exploiting the poor laborers! The laborer did not benefit one iota from this. A garment factory worker in India, Bangladesh or Indonesia would be paid 50 cents for a clothing item that will be sold for 10-20 dollars. The major beneficiaries are the capitalistic owner of the retail business and the owner of the manufacturing factory. The least benefit goes to the worker who was involved in the production. You cannot ignore the cost of the equipment used which justifies some profit for the owner of the factory but the real problem is the proportion of the profit-sharing which seams unjustly skewed in favor of the factory owner and the retail shop owner. This is the problem with the modern economy.

Even if you look at the cheap meat we buy off the supermarket shelf we benefit from the low price we have to pay. But, the supermarket chains would have squeezed the meat factories out of their share of reasonable profit. They would put in all the hard work but get a pittance as profit. They will never become rich. The buyer gets the good at low cost which is the modern phenomenon as a few centuries ago it would have taken more money to buy or make the same items for the average consumer.

Mass production is a modern economic driver. Cheap transport is the other. Cheap labor is the third and very significant factor.

Cold, snowy countries did not have the land resources for production of goods nor did they have the manpower. Then how come the European nations, particularly England, Netherlands and France became the core industrialized, capitalistic nations?

The Great Plague happened in Europe in mid-1300s and wiped out nearly half of the already scarce population. Millions died.

For me it is not a coincidence that European Overseas expansion began within a century after this. Like always a shocking event had to precede a major paradigm shift that occurs in economy. In 1492 Columbus discovered America and in 1498 Vasco de Gama arrived in Calicut (India). These two events are tied to the origins of the international commerce and the birth of European colonial empires. I feel Europe had to reach out to the rest of the land masses to access the natural resources that were simply not there in their home countries. This was the beginning of colonial history.

European powers found the gunpowder an effective tool to make inroads into their colonies by creating fear. It helped them a lot in their quests to subvert the states to submission. Quite often, they never adopted a direct confrontational approach such as war. The wars worked for neighboring countries but would have been impractical as a subversive tool for faraway countries. For example, in India, England used the merchant front to gain entry. They formed the East India Company and set base in Calcutta in late 1600s. They showed interest in the spices, tea, cotton and the like which they wanted to trade in. What products England had to sell to India is questionable. Slowly and steadily they used wine and women to win the local feudal lords and kings on their side to open up their markets as well as support the English troops in wars against other unwilling Indian kings. The East India Company grew to occupy other major cities in India and after some time the merchant front was dropped and the intention was made clear. For about 300 years India's resources were meticulously plundered.

The above story applies to the other colonial exploits of England in other countries all over the world. The exploitation of natural resources of a major part of the globe enabled Britain to be the biggest empire in the world and raised the living standards of the British at the expense of their colonies.

Other colonial aspirants like the Dutch, the French and the Spanish all did the same. They wanted to access the natural resources of other countries and generate wealth. They succeeded in their ventures. Europe's affluence is attributed significantly to their colonial ventures.

# CHAPTER 5

### NATURAL WEALTH AND HOW YOU CAN STEAL THEM

Craig Anthony wrote on the Investopedia site in September 2016 an interesting piece that looked at the naturally rich countries. Natural resources, or commodities, are the raw inputs that are used to manufacture and produce all of the products in the world. Commodities themselves, which include those extracted from the earth and those that have yet to be extracted, are worth trillions of dollars.

Venezuela, a South American country, has an estimated $14.3 trillion worth of natural resources. The country's main resources are iron, natural gas and oil. This country ranks eighth in the world for natural gas reserves, accounting for 2.7% of the global supply, and ranks sixth in oil reserves, accounting for 7.4% of the global supply. Iraq holds an estimated $15.9 trillion worth of natural resources. The country has 9% of the total world's oil deposits, accounting for most of its resources. Iraq is also among the top countries for reserves of phosphate rock. Australia with $19.9 trillion in natural resources is known for its large reserves of coal, timber, copper and iron ore. But the country also is the leader for two important metals: gold and uranium. As for the precious metal gold, Australia has the world's largest supply and meets 14.3% of global demand. As for uranium, about 46% of the global supply comes from Australia.

Brazil, the seventh-ranked country in terms of total natural resources, is estimated to have $21.8 trillion in commodities. Brazil has large deposits of gold and uranium and is the world's second-largest producer of iron. While the country also has sizable oil deposits, its most valuable natural resource is timber. About 12.3% of the world's timber supply comes from Brazil. China has an estimated $23 trillion worth of natural resources, 90% of which are coal and rare earth metals. However, timber is another major natural resource of China.

Iran, with $27.3 trillion in natural resources, is endowed with main natural resources like oil and natural gas. Iran has about 10% of the world's oil supply and 16% of the world's natural gas supply, and is about the same size as Alaska. Canada has an estimated $33.2 trillion worth of commodities. Canada has 17.8% of the world's oil supply, which is the highest after Saudi Arabia. It also has the world's second-largest reserves of uranium and is the third-largest timber producer worldwide. It also has large reserves of natural gas and phosphate. Saudi Arabia has 20% of the world's oil reserves, the fifth-largest natural gas reserves and large amounts of timber. Overall, the country has about $34.4 trillion worth of natural resources. The United States of America, with about $45 trillion in natural resources, is number two on the list of naturally wealthy countries. The U.S. has over 31% of the world's coal, but also has large amounts of timber. A total of 89% of the country's natural resources are from coal and timber, but it also has sizable deposits of natural gas, oil, gold and copper. Russia is number one on the list of countries endowed with natural resources. Its total estimated natural resources are worth $75 trillion. The country has many different natural resources, but its main deposits include coal, oil, natural gas, gold and timber. The country also has the second-largest supply of rare earth metals in the world. Russia is about twice as large as the United States.

One may wonder why certain countries have taken the lead in wealth accumulation. The above two paragraphs kind of give you an idea why. If you see around you might encounter a lot of rich people around you. I am not talking just about the ultra-rich but simple people who have more money than you. Most if not all of them may have inherited their wealth. Their fathers or grandfathers may have accumulated the wealth which got passed onto the guys who go around boasting their wealth.

People generally ask why some countries are rich. The explanation is that they 'inherited' natural wealth.

Some countries like Saudi Arabia are new to the riches. Their oil finds early last century transformed their wealth totally. Some countries like Venezuela, Brazil and Iran are not so rich because they squandered their oil riches in bad management and war. Corruption and unlawful activities may also siphon away national wealth into the coffers of private individuals and Russia could be an example of this.

In countries like Saudi Arabia, which is ruled by a monarchy, the natural wealth is not equally shared amongst the citizens. The royalty is said to own all the natural wealth and that includes trillions of dollars of oil. The average citizen is not any better off being a Saudi Arabian citizen. Is this fair? Only the royal household and the family members go about investment sprees all over the world buying football clubs, hotels and businesses! This is strange. I have lived in Saudi Arabia for a few years and I did not see any evidence of riches in the average Saudi household. If at all the only benefit they have is that the government does not tax them to fill up the government exchequer for development projects. The oil money is enough. At least in this respect the average citizen gets some benefit.

Coming to the general concept of natural wealth, whether it is fairly or unfairly shared, is it enough to just have these resources? These natural resources should be merchandised. How do you do that? You make some sellable products with them and sell them at a higher price. Depending on the product you will get the price. Or, you simply sell the raw materials as such. Coal, Oil, gold etc. perhaps come under this category.

Cotton is a natural commodity. Countries grow cotton as a crop. This cotton can be sold either as cotton or as finished clothing. The latter requires set up of manufacturing factories and laborers and all the frills associated with capitalistic economy. Some body will get rich and someone will get exploited.

The same can be said of other natural assets. Iron ore deposits of a country do not make all of the Citizens steel business magnets. Do they? There are only a select few who took the bold step of borrowing money from banks to set up the factories and start the production of steel.

Every single commodity available naturally has a story to tell. It is easy to see who was the winner and who was the loser.

If you take the diamond as a naturally occurring commodity available in African countries then you suddenly start thinking why isn't Africa rich? Why are the Africans poor? What happened to their natural wealth particularly their diamonds for example? Then you start asking uncomfortable questions like 'Who are the De Beers and how did they get hold of the diamond cartel? Again this same question can be asked of every single mining company that plundered the mineral deposits of Africa. All these mining companies, invariably coming from the Western countries, set up minefields in these poor, foreign lands and start using up the natural wealth as if they are their own. They just have to get the local governments on their side by throwing a pittance at them. A mine that will yield billions in wealth will be taken over by a foreign power either forcefully (war, colonial occupation) or by paying an unreasonably low compensation to the local rulers. But this unreasonably low payment is huge for the local poor government and they take it. If only the local government knows how to go about mining their assets and selling it by themselves them many of these African states will be like Europe today.

In fact, European colonialism robbed the richness of the so called poor countries of today. The role oil played in international politics and the way Americans and Europeans messed up with the Middle Eastern states is enough testimony to this.

Minerals have played a big role in the evolution of the modern economy. They have a lot of uses. There are so many types of minerals. Even apart from the minerals the other natural commodities like timber, oil, coal etc. have huge commercial value. Until about 18th century the world economy was agrarian. This was based exclusively on land and its irrigation. The products of agriculture and the products of domesticated animals essentially constituted the entire economy. The precious metals like diamond, gold, silver and the treasures of the sea like the pearls completed the whole.

As I said earlier the Malthusian trap held the world economy in a confined scale for a long time perhaps for tens of millennia. But in 1800s we saw a rapid growth propelled by the invention of steam power and the associated reduction in transport costs. That opened the way for long-distance trade.

England was naturally rich in coal and that helped in the large scale implementation of steam powered engines for transport and for factories. The transition from mechanical power of food-derived muscle energy to water-based steam energy was a paradigm shift in energy economics as well as money economics.

Europe became the seat of scientific growth from about 16th century onwards. There was a phase, often referred to as 'The Age of Reason' between 1685 and 1815, which led to dramatic achievements in Arts, Science and Philosophy in Europe. There was also a revolt against Christian beliefs leading to the Protestant movement. By questioning the religious authority the liberal philosophy movement spurned the freedom from arbitrary authority. This led to the rise of the middle class and the overthrow of the landed gentry. It eventually led to revolutions in France, America and England. The power of the institutions like the Church and the State weakened which had until then enjoyed a patronizing relationship with the masses. Scientific discoveries of oxygen, electricity, calculus etc. led to great practical applications in agriculture and industry and facilitated the emergence of the industrial revolution. The scientific revolution and the political revolution together gave birth to the industrial revolution. Imagine the impact of the invention of electricity? We run this world with electricity, don't we?

Europe also witnessed a profound movement called the Renaissance. The Renaissance was a cultural movement that profoundly affected European intellectual life in the early modern period. Beginning in Italy, and spreading to the rest of Europe by the 16th century, its influence was felt in literature, philosophy, art, music, politics, science, religion, and other aspects of intellectual inquiry. Renaissance scholars employed the humanist method in study, and searched for realism and human emotion in art. If you see any European cities you will be struck by the strikingly beautiful architecture of their buildings which is a sign of their explosive growth in Arts. Any museum in Europe has countless portraits that are stunning. The Louvre museum in Paris is one such example but I am sure there are others though less well known. Also you could see masterpieces of art in every palace in Europe. The painting you can see in the ceilings of some of the palaces and on the walls creates a lasting impression on you.

Renaissance is said to have begun in Florence, and not elsewhere in Italy. Scholars have noted several features unique to Florentine cultural life that may have caused such a cultural movement. Many have emphasized the role played by the Medici, a banking family and later ducal ruling house, in patronizing and stimulating the arts. Lorenzo de' Medici (1449-1492) was the catalyst for an enormous amount of arts patronage, encouraging his countrymen to commission works from the leading artists of Florence, including Leonardo da Vinci, Sandro Botticelli, and Michelangelo Buonarroti.

It is also postulated that Florence was the birthplace of the Renaissance as a result of luck, i.e. because "Great Men" were born there by chance. Leonardo da Vinci, Botticelli and Michelangelo were all born in Tuscany. Arguing that such chance seems improbable, other historians have contended that these "Great Men" were only able to rise to prominence because of the prevailing cultural conditions at the time.

The Middle Ages Italy had some unique political structures that led some to theorize that its unusual social climate allowed the emergence of a rare cultural efflorescence. Italy did not exist as a political entity in the early modern period. Instead, it was divided into smaller city states and territories: the Kingdom of Naples controlled the south, the Republic of Florence and the Papal States at the center, the Milanese and the Genoese to the north and west respectively, and the Venetians to the east. Fifteenth-century Italy was one of the most urbanized areas in Europe. Many of its cities stood among the ruins of ancient Roman buildings; it seems likely that the classical nature of the Renaissance was linked to its origin in the Roman Empire's heartland. The rich heritage of Roman Empire seems to have continued even up to the Middle Ages it seems.

During the 12th century Italy had a noticeable and widespread form of political and social organization. Italy appeared to have exited from Feudalism so that its society was based on merchants and commerce possibly forerunners of the Capitalists. There was an anti-monarchical thinking, represented in the famous early Renaissance fresco cycle _Allegory of Good and Bad Government in Siena_ by Ambrogio Lorenzetti (painted 1338-1340), whose strong message is about the virtues of fairness, justice, republicanism and good administration. The city republics of Italy opposed both the Church and the Empire instead devoting to notions of liberty. There was a "remarkable efflorescence of moral, social and political philosophy that occurred in Florence at the same time" in addition to art, sculpture and architecture.

It is not just Florence that was the seat of the Renaissance movement. Even cities and states beyond central Italy, such as Venice at this time, was also notable for their merchant Republics. The relative political freedom they afforded was conducive to academic and artistic advancement. Italian cities such as Venice were great trading centers making them intellectual crossroads. Merchants brought with them ideas from far corners of the globe, particularly the Levant. Venice was Europe's gateway to trade with the East, and a producer of fine glass, while Florence was a capital of textiles. The wealth such business brought to Italy meant large public and private artistic projects could be commissioned and individuals had more leisure time for study. Also there were people who made a lot of wealth creating an aristocratic class. Such rich families spread out to rest of Europe and used their wealth to finance a lot of activities.

The Age of Reason as they call it led to the origins of modern capitalism also. This is my opinion. As I said in the previous paragraphs the merchant republics of Italy that existed during the Renaissance may have contributed to the Capitalism also.

The printing press was one of the most significant inventions of the Middle Ages and possibly the most significant invention of the second millennium. During the mid-15th century (during the Renaissance period) a German goldsmith named Johannes Gutenberg invented the printing press improving upon the methods that were prevalent then. During ancient times, and for most of the Middle Ages, books were hand-written by scribes or monks and many people did not learn how to read. Most books were written in Latin, a language which only the most educated people could understand. This was before the printing press revolutionized the world of literature and spread of scientific and religious thoughts. The printing press is considered one of the most significant inventions of the Middle Ages because, like nothing before, it enabled the fast flow of information and lead to the spread of new ideas. Once it became possible to reproduce text very quickly, books could be read by many more people. This meant that people who were previously illiterate now had motivation to learn how to read, which lead to a more educated and inquisitive population. The printing press spread within several decades to over two hundred cities in a dozen European countries. It is estimated that by 1500 printing presses in operation throughout Western Europe had already produced more than twenty million volumes. In the next hundred years, with presses spreading further afield, their output rose tenfold to an estimated 150 to 200 million copies. In Renaissance Europe, the arrival of mechanical movable type printing introduced the era of mass communication, which permanently altered the structure of society. The relatively unrestricted circulation of information and (revolutionary) ideas transcended borders, captured the masses in the Reformation and threatened the power of political and religious authorities. The sharp increase in literacy broke the monopoly of the literate elite on education and learning and bolstered the emerging middle class.

Why did the Age of Reason and Renaissance happen in the first place in Europe? I feel this is largely due to the influence of new learning gained from occupation of foreign lands and the invention of the printing press. When you get a chance to spend some time in a new place you tend to pick up a thing or two. Don't you? You may pick up a new language for example. You may pick up a new cooking recipe. You could pick up a new custom. Why not some new learning as well? Ancient practices in the colonial countries seem to indicate that they had strikingly beneficial resources including knowledge. This knowledge was available for the colonial empires once they were there. For instance India was rich in knowledge for centuries and possibly millennia before the arrival of the British. The Moguls who occupied much of India before the arrival of the British brought a number of Arab skills and knowledge. It is not too difficult to understand how a new entrant coming with the intention of exploitation will fail to spot these opportunities.

In short, the colonial empires from Europe brought back new knowledge from the foreign lands and that led to a synthesis of new inventions and discoveries. Let us say you visit a foreign land as a tourist. I am sure you notice a thing or two that is new and worth contemplating. It could be a simple custom the people had or a new way of doing things and so on. If you were a scholar and attended a conference or something you tend to gain some insights by talking to fellow people in the foreign land. Students often prefer to go and study in US universities because of the breadth of knowledge and facilities available there. A person who is well travelled generally ends up being a wise man. This is common knowledge. We all know that. People who are not able to visit foreign places have a very closed and orthodox view of things and are afraid of change.

If you look at British people of today they are far more interested in travel than people of other nationalities. I have seen this when I lived in England for almost 15 years. They will be always talking about some trip or other they want to undertake. This tradition is not just because of the cheap air travel these days. The British have always done this for centuries when the airplanes were not even there. The British monarchy often encouraged and funded travelers to go and explore foreign lands with the long-term objective of colonization.

One thing that played a big role in favor of England becoming the first to kick of industrial revolution and spark global economy was that it had an unusually long stable history. For almost 1000 years it was not subjected to any foreign rule. This allowed it to retain its collective wisdom intact. If it were brought under the rule of a foreign power there is every chance that the invader would have destroyed the cultural heritages and places of learning like they always do. Knowledge and wisdom gained over centuries is lost when such acts of meaningless violence happens against a civilization.

For example, India suffered similar fate when the Moghul rulers destroyed the Indian kingdoms over a protracted period. One classical example would be the Nalanda University that was burnt down by an army of the Mamluk Dynasty of the Delhi Sultanate under Bakhtiyar Khilji in c. 1200 CE. At its peak, the school attracted scholars and students from near and far with some travelling from Tibet, China, Korea, and Central Asia. Archaeological evidence also notes contact with the Shailendra dynasty of Indonesia, one of whose kings built a monastery in the complex. The subjects taught at Nalanda covered every field of learning, and it attracted pupils and scholars from Korea, Japan, China, Tibet, Indonesia, Persia and Turkey. The vast library that existed in Nalanda not only collected religious manuscripts but also had texts on such subjects as grammar, logic, literature, astrology, astronomy, and medicine. Nalanda flourished as a center of learning from the 5th century AD to 12th century and declined after the massacre by Khiliji.

The uninterrupted preservation of culture and wisdom in England for a thousand years coupled with their flair for travel and exploration made England a cauldron of knowledge synthesis.

The Age of Reason that prevailed in Europe in the 17th and 18th centuries also needs to be mentioned here. The close proximity of nations within Europe and easy travel made interchange of ideas easy and quick. European thoughts on politics, science, philosophy etc. radically changed during this period in a favorable way. This era is also known as the 'Age of Enlightenment'. Thinkers in Britain and France challenged the religious and state authority and led to revolutions. At the same time fertilization of ideas led to inventions thereby sparking the origin of modern science. Isaac Newton published hi 'Principia Mathematica' in 1686 and John Locke wrote his 'Essay concerning human understanding' both works providing the toolkit for European science and philosophy for the next two centuries and beyond. German Philosopher Immanuel Kant lived during this time as well and he wrote his essay 'What is Enlightenment?' where he asked the people to 'dare to know and have the courage to own reason'. In medieval times these were revolutionary thoughts.

French Philosophers like Voltaire and Rousseau lived in this era. Another French thinker Diderot published the 'Encyclopedia' in 1751 which brought together leading authors to produce a compilation of human knowledge. Even the American independence stemmed from this spark of revolution led by Thomas Jefferson whose Declaration Of Independence was written in 1776.

In terms of Science Newton made major breakthroughs that transformed our ideas of the world. The invention of steam engine by Thomas Savery, a British scholar in the 17th century England, followed by improvements in its design by other English scientists Matthew Boulton and James Watt led to the practical applications of steam power in transport perhaps opening the door for long distance trade. The reliance on horses and ships was removed. This was a land mark in the economy.

Benjamin Franklin, Maxwell and Michael Faraday (all British scientists in the 17th and 18th century) opened the other flood gate to cheap power - the power of electricity to run their motors in the vehicles and factories and mankind never looked back after that. The real global economy was made possible.

Joseph Priestley, another English scientist, discovered oxygen and its role in combustion. The first commercially successful internal combustion engine was created by Étienne Lenoir around 1859 and the first modern internal combustion engine was created in 1876 by Nikolaus Otto not long after the Age of enlightenment. The real industrial evolution took off. The history of internal combustion engine involved British, Italian, French engineers and that showed how Europe took the lead in the Industrial revolution. Gottlieb Daimler and Karl Benz were actually scientists independently involved on inventions of the internal combustion engines and we all now know the cars they help build though we do not know much about their history.

The internal combustion engine is also the basis of jet engines and this also shows how this must have led to the origins of air travel and radically altered the way goods can be transported over very long distances in unimaginably short time and at cheap cost. Also people could travel across continents in hours rather than months. If you go to any supermarkets these days in any country there will be fruits, vegetables flown across thousands of miles. A sandwich bought in a UK supermarket was actually made in South Africa!! This is not a joke. I have seen this.

Just brushing aside the point that air travel made this possible we need to ask a genuine question: are there no sandwich makers in the UK? Why you needed a factory in South Africa to bother making sandwiches for UK consumers instead of worrying about their own local customers? Do you see the capitalistic roots here? The same question can be asked why some countries bother to sell fruits and vegetables 100s of miles away. Don't people know how to grow vegetables locally?

This is one of the major concerns I have. The argument that capitalists had the finance to set up big factories and buy costly machines to produce goods which would otherwise be impossible for the labor class to do on their own does not hold water for food industry. Does it? Why do you need some capitalists to sell food worldwide? Why should meat production assume global scale? Is a local slaughterhouse not enough? Does a local farmer growing vegetables need to compete with some global company that also tries to sell vegetables grown on the other side of the planet? This means one thing to me. The capitalists do not satisfy themselves with the money they made with big businesses that really need huge capital. Their intention is to put their hands in every pie. The loser is the local, small scale producer of goods.

The same argument can be applied to other small scale industries which are operating within a country. They have to compete with global brands who manufacture the same product and sell in all countries. The opening up of the trade barriers is crucial here and the capitalists lobby for support from the government which is always readily forthcoming strangely. So the nexus between the government and the capitalists is what ticks the wrongful economy.

England, the pioneer in colonialism and industrial revolution, has managed to keep the legacy of occupied land and the market access even after the colonization has ended. They achieved it by way of grouping their former colonies under one umbrella called the Common Wealth. This consortium of nations is still functional and they hold biennial meetings where all the member states attend. The name 'Common Wealth' is striking. I am not sure how they got away with this name in the first place. Doesn't it directly imply that the wealth of these countries will be considered 'Common Wealth' paving the way for continued access to it though England had lost the ruling rights? The preferential access to markets of these countries still makes it quite lucrative for Britain.

Europe, with all their colonial exploits, has worked since 1940s to unite most of their own countries to inbreed business practices wherein they scratch each other's back by preferential access of their markets. When someone else tries to break in and access the European market they impose a levy that will make the foreign product unattractive and thereby driving the business away. This also has, unfortunately, the side effect of stifling innovation for the European companies because they know that the European government will kill the competition threatening them from outside Europe.

Policies to protect domestic markets such as tariff measures stifled trade. The Great Depression that happened in the US in early 20th century was due to the protectionist, inappropriate policies. Its repercussion spread to Europe as well. The US Congress passed the Tariff Act of 1930 that raised the tariffs on imports by an average of 50%. There were reciprocal tariffs from neighboring countries and other restraints. International trade came to a halt in mid-1930s deepening the Great Depression worldwide. The recent introduction of tariffs in 2018 on Aluminium imported from China has resulted in counter-tariff measures from China and we have to wait and see how this will affect world economy as China and US are the two major players in the global economy.

Considering the Great Depression happened within a decade after the World War I means that the economies of major nations were already in a fragile state that could not withstand such disruptions.

Germany was saddled with debt payments to be made to Allied Powers for damages caused during the war. As it was recovering over a decade there was political turmoil in Germany because people had lost hope. There was poverty and rationing of food etc. that led Germans to think what next. As I mentioned earlier such shocks usually allow people to be receptive to ideas that are not conventional or sound. This was the reason why Hitler could form his National Social Party and come to power. Nazis built their military might while at the same time spearheading a re-industrialization policy. The German Highway system call Autobahn was built. The Car industry got a boost with Volkswagen. But, unfortunately, Germany's invasion of Czechoslovakia and Poland in late 1930s precipitated the World War II.

A new world order emerged after the World War II. A number of countries were devastated by the war. There was a need for restructuring the global economy. In other words credit was in short supply to meet the needs of the countries. The World Bank was formed with subscriptions from member states. The mandate was to rebuild the economies of Europe and Asia. The World Bank emerged as the biggest lender of foreign aid to developing nations. The financial assistance coming from the World Bank, just like in any other financial deals, was actually a repayable loan. It is not as if someone is giving away largesse for nothing.

The meeting that was held to discuss creation of new economic order in the form of three new organizations was held in 1944 at a Washington hotel in Bretton Woods. Those three organizations were the World Bank, International Monetary Fund (IMF) and the International Treaty Organization (ITO).

As expected the US played a lead role in this initiative. The World Bank loans were issued with severe restriction clauses that will demand the borrower countries to abide by the directives from the World Bank when the borrower country cannot repay. The World Bank was given the right to ask the borrower country to make structural policy changes that will suit the US. For instance, the World Bank can question a borrower country like Indonesia or India to revise the wages for workers so that their manufacturing output will lose any competitive advantage whatsoever. Or the World Bank can ask the country to remove any subsidies to farmers which will make their farmers to go out of business to the extent the country will be forced to import food grains from the US.

The IMF was formed to maintain a fixed exchange rate system called the Bretton Woods System. Slowly the IMF became the world's overseer of the international financial system playing s crucial role in the aftermath of the East Asian financial crisis.

The International Treaty Organization (ITO) was not ratified by the US Congress. Why should an international treaty be ratified by the US? Anyway its intended primary function of liberalizing world trade was assigned to the General Agreement on Tariffs and Trade (GATT). Over time a number of revisions have been implemented that slowly and steadily reduced world tariffs, removed no-tariff barriers like quotas such that there a reduced barrier to trade in services, protection of intellectual property and liberalization in agriculture. Eventually GATT transformed into the World Trade Organization (WTO) which was given the same mandate of liberalizing the world trade.

The world 'liberalization' of world trade means only one thing - how to expand the market of the developed economies. In other words, the capitalistic lobby slowly and systematically devised their own ways of making more money.

The US had several advantages that allowed it gain supremacy in global economy. First was its size and the huge natural resources. Britain until World War II had this privilege of being the world super power but after the war it had declined. Even during the peak of its power Britain's share of the world's manufacturing output was 20% in 1860. But, the US produced almost 45% of the world's output in 1950!

The US did not take part in World War I until the last 6 months. This helped it avoid huge expenses unlike the European counterparts. Europe spent far too much resource on it and ended up using their work force to help as soldiers. So the depletion of farmers and industrial workers meant that their production fell in all areas. They had to buy these items and the supplier was the US. US made a fortune by selling these items to the Europe and got paid in gold. At one point almost three-fourths of gold supply was held by the US making it very rich. This experience is probably makes US think it is always better to drive the countries to war every now and then.

The US government, supported by the banking cartel, made a strategic decision of helping with reparation of the war-torn economies of the Western Europe and Japan who had lost almost half of their economic output. The Marshall Plan (another US ploy) allowed injection of 11.8 billion US dollars into Western Europe and Japan between 1948 and 1952. This would be almost 200 billion US dollars equivalent now. This injection of capital financed technology put the Western European countries back on their feet. The Marshal Plan got Western Europe to become unified and allow economic and political cooperation with the US. The reviving economies of the Western Europe and Japan enabled US to make its riches and become the World Super Power. The US also used the ploy of economic assistance to win the support of the beneficiary countries to allow not only their market access but also allow the US to build their military bases there. The power of the military allowed US to quell opposition to its economic pursuits. The vast economic and military resources of the US made it possible for it to keep firm grip on the global capitalistic system. Formation of NATO enabled its dominance on the core countries of the Western Europe. Economic rivalries were replaced with cooperative arrangements like OECD (Organization for Economic Cooperation and Development) which freed old conflicts and removed trade barriers boosting the prospects for the US till 1973.

The developing states of the world started growing which concerned the capitalistic nations. But these developing nations needed the capital to make progress. This capital was sought from the capitalists who added some hidden costs to the loans. Servicing the debt became a challenge and the developing states were at the mercy of the lenders. Forging of links between the capitalistic nations and the local powers in the developing states allowed the developed nations penetrate the developing economies as suppliers, distributors and subsidiaries. In India for example the country adopted Socialistic policies after independence but over the years opened the doors for globalization. Lots of companies set their foot making predatory investment crushing the local businesses and the World Bank and IMF played the role in dictating the way the Indian government has to make their financial policies. The same ploy was used in many countries.

The oil crises of 1974 and 1979 due to the rise of the oil prices led to both recession and inflation simultaneously. Middle East saw this as a boom in their economy and the surplus money they had was denominated in US dollars (Petrodollars) and was deposited in the US and European Banks. The banking cartels were now flush with other people's money which they could exploit. They had to find borrowers ready to pay interest which is consistent with the standard model of capitalistic economy. The borrowers were the oil-importing countries who were reeling under the cost of oil prices. The ballooning of the debt in many developing countries was unavoidable as they needed the resources to keep their economy afloat.

Monetary policies adopted by the Chairman of the Federal Reserve Bank in the US at that time resulted in increase in interest rates which made the amount of money to be paid by the developing countries to service their debts increased! Do you see now the sign of exploitation of the world by a group of private financiers?

This also impacted on the US economy as money supply was reduced to reduce the inflation. The severe downturn in US economy affected the developing countries by reducing the demand for their products as US was their major consumer. Latin American countries defaulted on their payments as they could not earn enough to pay their debts. The alternative to them was to listen to IMF how to adopt austerity measures or some sort of restructuring. Some countries which had resorted to building their industries and aim for import substitution with their own manufactured products started facing problems due to economic downturn in their own country as well as countries where they were trying to sell the products. Opening up the economy in a market-friendly way to global players was a model adopted first by countries like Hong Kong, Singapore, Taiwan and Korea which was later adopted by some more countries including Mexico. Mexico joined the US and Canada in the North American Free Trade Agreement in 1994. Linking to the global economy was no more seen as exploitation by the capitalists but a way of selling their own products. More interestingly, the developing countries saw this as an opportunity for attracting investment from the capital-rich countries which will boost their businesses. By allowing the foreign capitals to invest in equity of local countries the influx of capital started while at the same time the local businesses lost their ability to plan for themselves. They had to listen to the foreign capitalists who told them what to do.

# CHAPTER 6

### UNIT OF ECONOMIC TRANSACTION

What is money? Where does it come from? How do we quantify it? If you were to talk about natural systems we would be talking about energy quanta instead.

Let us now first talk about the money that we all know and love. Money is a device used to pay for something. If you were living in the medieval times, or even before, you would most probably be giving an object or product of some value to get some other object or product in return. We would call that barter, a form of trade. Because there was no money concept at that time the barter was the only form of trade in the earliest times. Over time it was to fade out because it was difficult to ascertain value of goods and also to equate one good with others. I suppose people sometimes had to feel they are giving away something of more value than they get in return. Moreover, sometimes the items you want to trade were not divisible (like individual livestock) and so you cannot exchange them for smaller value goods. If you had wheat or rice or carrots to sell then you could buy any small quantity you want but for bigger items an equivalent value good was not readily available.

Mesopotamians are credited with inventing the barter system but you never know that for sure. As early as 6000 BC bartering was used there. Phoenicians, Babylonians and Romans all did it over periods of time. Food, tea, spices were bought in exchange for goods. Even livestock were used in exchange. As recently as the Middle ages Europeans bartered crafts and furs in exchange for silk and perfumes. Musket balls, deer skins and wheat were used as barter by Colonial Americans. As recently as the early 20th century bartering returned during the Great Depression because money had become scarce and unreliable due to the banking crisis. Surprisingly, even in the modern day barter trade does happen significantly between businesses, corporations and national governments. U.S Department of Commerce and GATT both estimate that barter accounts for 20-25% all transactions world-wide. This is interesting.

According to Kevin Brown, CEO of Hudson Barter Exchange, the recession of the late 2000's is what sparked the trend. Person-to-person bartering is still done today through swap meets and online via sites like Craigslist. There are more than 1000 sophisticated barter exchanges throughout the U.S that enable people and businesses alike to use "barter bucks" to trade goods or services for credit that they can apply to something else on the exchange.

In the Paleolithic era (until 10,000 BC) people were living under conditions constrained by the environment. Availability of edible flora and fauna, climate and competition for resources determined the living condition of the people. The only non-food commodities were tools, fur etc. They were only used for their own use. If at all some exchange of goods may have happened between people but the concept of trade and economic gains were simply not there.

People living in the pre-historic era had to earn their living by hunting and gathering. Their housing needs were met by natural shelters like caves and where they had to build something it was all 'Do it yourself'. There was no concept of laborers and wages. Same way your clothing need was met by your own activity. The idea of skills and differentiation of labor, and the consequent trade value, was not there yet. In fact, there was no government of any kind. The lack of enough people in the group or clan meant that there was no need to think of trade, profit etc.

In the Mesolithic era that began with the end of the last glacial period about 10,000 years ago agriculture and domestication of animals began. Food surplus allowed them to store the food in some common granaries for distribution. Food surplus meant that all people in the group need not work on sourcing the food. The liberated time was used by them to learn new skills and make new goods. This was the start of the economics. People were paid wages in the form of stored grains. The novel goods made by the freed people became sellable goods that had some value.

Even when people were living in small groups, just like other animals, the sense of territory was always there. Animals mark their territory by a variety of methods and when some animal from other territory enters other territories that is not welcome. This sense of territory is the forerunner of markets in our modern economy. Every country has its own space where they can market their goods, make use of the natural resources with a priority etc. When some other country wants to come into your territory to exploit your natural resources there is war. But, quite often, various subversive methods have been used by various countries to do exactly that.

When an ancient tribe made some new tools and crafts they would be trying to exchange them for something else which they do not have but is available in a nearby tribe. The concept of trade was born. As I said a little while ago this trade relied exclusively on barter. No coins or bank notes were there yet. Cattle were probably used as a determinant of measurable monetary value. That again means this practice started when man learnt to domesticate animals for renewable food proteins. It is said that a person's wealth was based on how many cattle he had, a practice still prevalent in primitive communities even today.

In the Neolithic era tools made crafts possible and the making of goods. Red ochre and shell jewellery were traded during this era. This small scale activity did not need organized planning. The age of the market economy was still far away.

It was the Sumerians who first developed a trade and market economy based on the commodity money. They had used a measure of barley as a unit of value. The unit was called Shekel. It was actually a coin that represented a claim on weight of barley held in the city warehouse. The word Shekel is referred in the Akkadian empire around 2150 BC under the reign of Naram Sin. Later in 1700 BC it is also mentioned in Code of Hammurabi. The shekel as a unit of weight, possibly a precursor of coins, was common among western Semitic people, Moabites, Edomites, and Phoenicians.

Shekel's value was variable depending on era, government and region not unlike the value of currencies issued by different banks in different states in the earlier times. It could be between 7 and 17 grams or 14 grams. Shekels were used to pay wages for laborers. The Code of Hammurabi sets the value of unskilled labor at approximately 10 shekels per year of work! Later on the Persian empire (539 - 333 BC) give ranges of 2-7 Shekels per month for unskilled labor. Though it is not clear how it was calculated the bare minimum wages needed to survive for a household was 22 Shekels per year.

Shekel has evolved over times. The Israeli Shekel replaced the Israeli Lira or pound in 1980. The Israeli Shekel is a pure unit of currency and not weight anymore. This is one classic example how economy evolves over time.

Along the lines of commodity money, just like Sumerians, the Babylonians and their city state neighbors also developed the system of prices using a metric of various commodities that were fixed in a legal code.

Sumerians were great. They not only introduced the writing but also the accounting system. The accounting system was mainly developed to log the details of deposits of grains in the common storehouses. Do you see the similarity to bank deposits? In fact, the early law codes of Sumer had been written down as financial law and surprisingly many of these had attributes still recognizable in the modern pricing systems!! These include codified quantities of money for business deals which were to become interest rates, laws concerning how private property is to be taxed or divided, inheritance rules etc.

Temples played a major role in origins of economic systems. It is argued that temples first originated as a common storage area for surplus grains deposited by the public voluntarily. It is believed that the king and the priest made the people do so by convincing them that it is God's desire that the public submit a portion of their produce to the temple. Fearing punishment from God the people accepted this idea. This was to transform later on to the form of income tax which helped fund the governments worldwide until this date.

The temple itself had assets and property that had been given to it by people. The accounting system, as I said earlier, was developed mainly to document such asset keeping. The temples charged ground rent for the property and also promoted interest-bearing debt and profit-seeking. Temples also housed the handicraft workshops in the third-millennium Mesopotamia wherein the public were able to house their craft products which was exchanged with other items that legitimized profit-seeking trade. So, the temples were the earliest facilitators, as well as the beneficiaries, of economy in the earliest times.

Lydians introduced the use of gold and silver coins around 650 BC. They were made in different denominations which again reflect the quantitative value differences that is highly useful for payments of different amounts. As early as 4th century BC, an Indian thinker called Chanakya wrote the _Arthashastra_ where he elaborated the science of economics. It is believed that the Maurya dynasty in India minted silver coins in the 6th century BC. Even the Chinese seemed to have started the minting of coins as units of economic transactions around this time.

World economy expanded slowly with military conquests and voyages. Multinational trade was made possible by this way. The Silk Road was used for trading between China, Central Asia and Europe. The first bank notes were issued in China in the ninth century during the Song dynasty.

Over time and down the millennia various countries and states have adopted innumerable forms of economic transaction units. The earlier economic units were coins usually made of glod or silver. The intention was that the monetary value of the metal would compensate the holder for its assigned value. If someone sold a goat and got paid a few coins what exactly is the fun for the seller of the goat? He gave away a live goat that could yield him milk and meat and got back a few metal coins does not sound a good deal. The deal becomes worth considering if those coins were made of precious metals like gold or silver which the seller can melt and recoup the value of his goat. The problem is that gold and silver are in short supply. So, many governments have resorted to replace these gold and silver coins with bronze and less precious metals devaluing the value of the coins. In fact the earliest minter of coins, the Greek, faced the first economic crisis when they started replacing their gold and silver coins with coins made with copper and silver mixed. People did not have the confidence anymore in these less precious coins and the economy suffered a big set-back as early as 6th century BC. Still we have not learnt the lessons if you saw the plight of Greece even now.

There have been literally thousands of different paper currencies used by people all over the world over different points in time. Very few have survived to this date. Even the surviving ones seem to fluctuate in value on a daily basis and we modern economists have started trading in currency itself pushing their prices up or down. Trading in currency as a commodity by itself is a strange thing considering that the currencies arose to act as a unit of an economic transaction. Printing too much of the currencies without any back-up devalues the currency because people do not think the government can compensate them for the value of the currency. So, it is still a valid expectation that the coins or notes should have a value or assurance. The abolishing of the gold and silver standards by practically all countries in the early 20th century has taken away the assurance factor but not many people know about this. Every one still thinks the money is printed by the government and because it is written on the note that the bearer will be paid the value of the note. No one has really had the time to sit down and think from where the government will refund the value of the note? Even worse if the printer of the money is not even the government, which the gullible people do not even know, who is going to repay?

What do life systems do to quantify energy economics? The concept of balancing the books is equally applicable in energy economy as it applies to our modern currency economy. If you want to spend something you need to have something. Just like money does not grow in trees the energy also does not grow in trees. Is it not? May be it does. All energy available on this planet is sourced from the sunlight that is beaming towards the earth non-stop for the past few billion years and will probably continue to do in the next few billion years also. This perennial source of energy forms the basis of all dynamics of life systems by providing food. The harvesting of sun's energy is accomplished by the process of photosynthesis in plants and that is why I said 'energy does grow in trees'! The infinite supply of sun's energy is transformed to mechanical energy through the food intermediary! So, all manual labor that goes on here on our planet is actually transformed sun's energy! That is wealth creation. For practical purposes it is limitless.

If you considered the earth as a thermodynamic open system the sun's energy is the input that drives the entire operations - both living and nonliving systems. All energy wealth of our planet is presumably infinite if you take sun's energy influx into consideration and availability of the 'machinery' (plants and cyanobacteria) to manufacture 'goods of value'. The 'goods of value' does include the food obviously. Also the dead plants and animals get buried and the hot inner earth 'cooks' them and 'digest' them to make fossil fuels and precious metals. The coal is dead plant really. It is nothing but carbon. Over more time this carbon in the form of coal can get transformed to diamond which is also carbon. So, the creation of 'wealth' by the planet's inner working actually forms the basis of modern economy too. The coal that started the industrial revolution and the oil that started the riches of the Arab world and the mineral wealth that spurred colonialism and European superpowers are all linked to the sunlight as the root cause. In that sense the energy economics and modern currency economics both are inter-linked and similar in every respect. Money does grow in trees and in fact it grows only there!

We should also not forget that planetary wealth in terms of total content of elements and minerals has been finite since the beginnings of the earth 4.5 billion years ago. Most people would not know that the all atomic elements like carbon, oxygen, nitrogen and the whole lot of them were not made in earth!! They are made in some faraway stars which spew them out in cataclysmic fashion when their time is out. These atomic elements, which form pretty much the basis of everything living and non-living on our planet, are formed by the fusion of subatomic particles like protons and neutrons and electrons in the deep interiors of the stars under enormous temperature and pressure. So, the stars are the actual 'factories' that made our atoms! These stars literally have 'exported' them to our planet. It is said that even some organic matter got transported to our earth in millions of tons by means of meteorites that hit us. These meteorites are alike unformed planets as if they were breadcrumbs! They keep orbiting the interplanetary space and slowly get pulled by the gravitational force of the planet. What I am saying is they ain't making any more new atoms on the planet and they ain't making any more new land mass either. What you got 4.5 billion years is what you will ever get. So, our planetary wealth is actually not infinite.

We humans have learnt to use these atoms and elements in ingenious ways to make value-added products of technology. Even life systems should be considered products of such 'biological technology'. The products of engineering and technological inventions have made humans to create the so-called monetary wealth. We have assigned the value of each depending on how useful they are. In many cases the people who invented (scientist) or created (factory workers) these fantastic products are not the ones who became rich. Instead, it is the entrepreneur who used his money capital to make those products on an industrial scale and sold it to the rest of the world who gets rich. Again, it is a travesty of the system that we designed for ourselves.

Life systems are in one respect very unique in that their currency is standardized much more than our modern economics. There is only one universal unit of currency. That is adenosine triphosphate (ATP). Every single life system uses the same. That includes the millions of life forms including the unicellular bacteria to multicellular life form like us humans!! Is it difficult to believe? How is it even possible? There is perhaps a big lesson to learn here for the modern day pseudo-economists, I suppose!

If I had a dollar with me I can spend it anywhere I like. The dollar is not part of me but owned by me. That dollar is used externally and it cannot be eaten or consumed internally. The dollar can only work outside my body. I can sell the dollar. I can buy food with it. I can buy other items of value. I had to earn my dollar through work. It did not get paid to me for free. My problem now is that none of this description fits the characteristics of the universal biological energy currency which is ATP. This is disturbing me as much as it disturbs you. I am trying to think hard as I write this what am I missing? Am I even right in seeking a comparison between a dollar as a unit of economic transaction and the ATP as a unit of energy economy inside my body?

The fuel that is used for 'making' ATP in our body is any one of the three raw materials - fat, glucose or protein. All these three materials come from our food obviously. ATP is 'printed' inside mitochondria which is one of the sub-cellular organelles. There are many mitochondria in every cell of our body. They are also called the 'power factories' of the cells. The interesting point is that every cell can make ATP from the above-mentioned raw materials! ATP cannot be imported into the cell as such or exported out of the cell. It is made inside the cell and consumed within the cell! The biochemical process that enables ATP synthesis in the mitochondria is called the oxidative phosphorylation wherein the raw materials are combusted by oxygen in a controlled manner inside the mitochondria. The ATP generated is used for myriads of biochemical reactions inside the cells. Every single metabolic reaction inside a cell comes with a price tag. Certain amount of ATP energy is needed for these metabolic reactions the sum total of which constitutes growth. If a cell cannot make enough of these ATP then it cannot run these reactions and the metabolism slows down. In the case of total absence of ATP generation the cell dies. This can happen in situations like total lack of food raw materials or simply lack of oxygen to combust the food. If someone is unable to breathe then the lack of oxygen can shut down the cellular power economy.

In our modern economy no one prints their own currency, do they? But how come each cell is able to print its own energy currency?

As I said before the printing of monetary currency seems to happen out of thin air with no basis. This cannot happen with energy currency generation inside the cell. There has to be availability of real asset of value to back the ATP generation. In that sense I think the natural systems have retained the relation between the monetary asset and its value. This is something for our economists to ponder about. You cannot persist with a system such as the one today where assets like stocks and derivatives keep climbing in imaginary value for no reason. There is not enough money in the whole world to pay for all the world's stocks and derivatives that are estimated to be valued around 500-600 trillion dollars! Even the real estate that we consider as a common asset seems to jump up in value over time. It is the same house or building but the value is multiple times more than what it takes to build it from scratch. They cite the location of the building (i.e. city) and argue that the going market price has gone up! But, does the house or building really worth that much intrinsically? The answer is no. A house in London may cost millions of pounds. A house in a smaller city can be costing only a few hundred thousand pounds. If you go a bit further the actual cost of building a house of the same size would be less than 100,000 pounds. So, where arises all this premium value? This is the perception and agreed game play that something is worth something and we perpetuate this myth. That is the bane of our economy.

Life systems do not keep pumping up the value of 'biological goods' nor do they jack up the value of their energy currency. They are all fixed at the same rate since the beginning. What an ATP can do has always been the same since ATP came about. I am not sure if we can say that for our currencies and products. In India I read recently that the Reserve Bank of India had abandoned the printing of 2 rupee and 1 rupee notes because they are not worth much and cannot buy practically anything in the shops. Why print such low denomination notes? But there was a time not long ago when such notes were in circulation and I have used them just like others. But, in today's world such low denominations do not count. 25 paise and 50 paise coins are not considered legal tender in India! As a boy I remember even using 5 paise and 10 paise coins that helped me buy some sweets in the shops. That was in the 1960s and before my time my fathers and grandfathers would have found even smaller denomination coins worth something. What does all this mean?

If you take a life system such as humans for example a glucose molecule (one of the energy fuels) can be used by our body to make 32 ATPs inside the mitochondria. This has remained the same since millions of years. Not only the cellular energy currency has not perished but the value of it has remained unaltered. Can we ever think of a model such as this in our modern economy where we have driven away all those greedy speculators from jacking up the prices and value with no basis whatsoever?

ATP energy is used to perform reactions within cells for growth and repair. Typically there are certain important reactions in the biochemical 'chip' where organic compounds are processed down fixed routes towards synthesis of essential cellular commodities. I used the word 'chip' indicating the transistor inside a computer because just as in the transistor the pathways inside the cells are defined for the flow of information. Once the cellular entity (a biochemical molecule or its intermediate) enters a pathway it is a no-return route. It proceeds to completion with the end-result of a useful product. Each of these biochemical reactions have a crucial first and second step which will require energy input (like we need money to make purchases) to proceed forward. For example, if the cell wants to use a type of sugar called galactose (which is the sugar present in milk) the first enzymatic reaction catalyzed by galactokinase requires one ATP for the transaction. This has remained constant ever since we had the ability to digest milk. The number of units of ATP has not increased or decreased over time in the evolution of the organism. This is just one example for the sake of illustration. The same applies to tens of other biochemical reactions inside the cells for which the energy costs have not changed at all for millions of years. Can we say the same thing for any of our monetary currencies, past or present?

The other point worth comparing between bioenergetics and our monetary economy is that the quantity of energy made from biological assets has remained same while in monetary system we cannot boast of this. For example if you take 1 gram of fat the energy quantity that can be produced from it is 9 calories. 1 gram of sugar or protein give us about 4 calories of energy. This has not changed for millions of years. Can we even dream of telling something like in our economy? Let me ask you something. What did 1 ounce of gold fetch you in terms of dollars just 50 years ago (not 50 million years ago)? Today an ounce of gold is going at 1300 dollars or so. There was a time not long ago when you could have bought an ounce of gold for 50 dollars!! Do you start seeing the truth?

One point is worth mentioning though. The capacity to make 32 ATPs per glucose molecule has been made possible by the advent of the 'oxygen technology'. Until oxygen came about a couple of billion years ago the world was low-tech from a biological sense. It was like the times before we had electricity or steam power. We relied on manual processes for everything and that meant limited productivity. You could only make a few things over prolonged time out of a certain raw material. The same glucose molecule allows only 2 ATP production if oxygen-less metabolic process is employed. In our body we actually have remnants of this oxygen-less technology in the form of the metabolic process called glycolysis (literally means lysis of glucose). This glycolysis is used in conditions when the muscles are overworking to that extent where there is not enough oxygen coming. For example if someone is running long distance puffing up oxygen still there will not be enough of it because of the continuous work undertaken by the muscles to accomplish the running. In such cases the body does a limited amount of energy capture by incompletely breaking down the glucose through glycolysis. The end products are 2 ATPS and a molecule called lactate (which still retains a lot of un-captured energy and can be used when oxygen becomes available).

So, oxygen is important for better energy capture. This is an understatement. Until about 2 billion years ago our planet was devoid of oxygen. There were primitive life forms living on the planet but none of them depended on oxygen for their survival. In fact, oxygen was lethal to them. It is said the cyanobacteria living in the oceans were the ones which used the photosynthetic process to capture sun's energy to convert carbon di oxide to oxygen. Over millions of years the level of oxygen grew on our planet to the current level of almost 20% of atmospheric gases. But, in the very beginning, the primitive life forms died on exposure to oxygen. There was a mass extinction of life forms. Why am I talking about oxygen here?

Advent of oxygen in nature is comparable to the industrial revolution of our modern economy. What is the relation between both? In both cases the critical factor was energy production and utilization that paved the way for complex growth in the systems. Industrial revolution relied on the steam power made possible by combustion of coal to heat up the water. This energy was used to drive the engine turbines in factories and locomotives. Until then humans were relying on small scale energy sources like horse power for locomotion and movement of goods and the mechanical power of the human muscle. This was by nature very limited in scope and until mid-1850s the situation could not improve. For over 200,000 years man lived this life of simplicity effectively restricted to his village. But, once the steam power was found, all the shackles that chained him to local economy were broken free. He could now expand his capabilities both in manufacturing goods on industrial scale as well as move across great distances. The real global economy was born. The advent of cheaper goods and more profits that came along with industrialization also helped man to break free of population control. Suddenly human population grew in the last 150 years by almost 100 times since the birth of Christ.

Life systems were limited in size and complexity until 'oxygen technology' came about. I said a little while ago the same glucose molecule yields only 2 ATP molecules if it is metabolized without oxygen (anaerobic metabolism call glycolysis). But, when oxygen is used to fully combust the glucose inside the mitochondria then the total number of ATP molecules that can be made is a whopping32!! This is almost a 16-fold increase in the energy capture efficiency. That simply meant that more power was available inside the cells to run more cellular machineries. More cells could be supported using this surplus energy. This led to bigger organisms with more cells. When there were more cells available to do cellular work then there was this possibility to divide the labor and become specialized. Enough energy could be found to support this. I have to add here that it is possible to compare the impact of agriculture on human social growth. Availability of surplus food made it possible for our group size to increase and also led to the possibility of people becoming specialized in different arts and crafts. That was the beginning of trade where the specialized goods became objects of value.

In the same sense availability of more energy with aerobic metabolism (using oxygen) suddenly cells became more in number in a given organism and also the cellular specialization. Cells could form specialized molecular products like growth factors, hormones, transporters, receptors etc. which not all cells could make. I will touch upon this topic in more detail later but for the time being it is enough to say that oxygen made it all possible. More relevant to the topic of this chapter the value of a unit of monetary currency has never changed despite all these advances in life systems.

Many different life systems use, even today, different raw materials to make their energy. This is like we use different forms of assets to generate wealth. We could use the minerals like gold, diamonds, industrially useful minerals like aluminium, iron etc. On the other hand we could use agricultural produce which again is a vast number of plant products. We could use the animal products like meat. Milk etc. to generate monetary wealth. There are also the fossil fuels like oil and gas. Then there is the learned skill we can exploit for monetary wealth and so on. Life systems also use diverse assets to generate their energy currency. Photoautotrophs are organisms like plants which use the energy of sunlight to make sugars. They are able to 'manufacture' food at a global scale. They are the real 'multinational corporations' for that matter. Industrial manufacture of food using purely the sunlight and a waste product called carbon di oxide the plants have created high-value, essential commodities. The main product is glucose and the 'waste' product of the photosynthetic reaction is oxygen. Plants generate ATP energy currency by absorbing sun's energy which is used for making the glucose product. The quantity of ATP generated and used by plants per unit transaction has remained constant always.

Plants also make ammonia which is one of the most essential raw materials for making proteins, the building blocks of life systems. There are literally 100s of different types of proteins in various life forms including us which have a diverse range of structural and functional roles. Plants depend on nitrogen-fixing bacteria in a symbiotic relation for fixing atmospheric nitrogen to ammonia. These nitrogen-fixing bacteria derive their energy from the inorganic source which is nitrogen. Our vital 'protein commodities' rely on plants and bacteria to generate ammonia. Using our own cellular processes we use the raw material of ammonia to make the proteins.

There are organisms called chemoautotrophs which depend on inorganic compounds for their energy wealth. Some fascinating examples of sulfur-metabolizing prokaryotes are found in deep-sea ecosystems. For instance, certain prokaryotic species can oxidize hydrogen sulfide from piping hot hydrothermal vents. They use energy released in this process to fix inorganic carbon from the water into sugars and other organic molecules in a process called chemosynthesis. Sulfur-metabolizing prokaryotes form the basis of food chains in their deep-sea habitats (where not the tiniest ray of light can reach to support photosynthesis). The sulfur metabolizers support entire communities of organisms, including worms, crabs, and shrimp, thousands of meters below the ocean surface.

There are organisms like Heterotrophs which depend on the organic compounds made by plants and animals for energy generations. We fall under this category.

Mineral-based economy literally led to the globalization of trade and the transition from an agriculture-based economy was a milestone in our economic history.

Life systems do depend on a fantastic array of minerals to run their own energy economy too.

I can see the similarities between us humans making merry with the planetary mineral wealth and the way life systems utilize the abundant inorganic and organic chemical assets. The only difference is that life systems have not exhibited the proprietary zeal unlike us who have taken to the abnormal attitude of claiming ownership of planetary assets for personal gains. We have allowed a big mistake to be committed. How could possibly someone claim ownership of some geological asset that formed from some precursor that formed in turn in a distant star many billion years ago? Are we mad? Who are we to say that it belongs to this person, this corporation or this country? Doesn't belong to the whole world? The problem is the only economic model we know cannot comprehend such a view. We have been brainwashed to believe that there is no other way. The suckers that we are don't even think there is a problem here.

# CHAPTER 7

### ORIGINS OF CAPITALISM AND THE TRANSITION FROM AGRARIAN TO MINERAL ECONOMY

At some point in history the economic focus shifted from the agrarian commodities to mineral wealth. The geochemically abundant metals, of which there are five (aluminum, iron, magnesium, manganese, and titanium), constitute more than 0.1 percent by weight of Earth's crust, while the geochemically scarce metals, which embrace all other metals (including such familiar ones as copper, lead, zinc, gold, and silver), constitute less than 0.1 percent.

Africa, surprisingly, is home to some of the most concentrated deposits of minerals like copper, gold, diamonds etc. But they are the poorest. People starve to death or fight to death because of economy-related problems. This is the stark irony of capitalism. Someone, who has no business with the African wealth, must be enjoying. We sure know who they are, don't we?

By moving away from agriculture to mineral-based technological development the scope for capital-intensive factories arose. For example, iron as a mineral has so many uses and capitalists started building huge factories. The same way Aluminium mining and processing and the utilization all needed big investment which the laborers cannot afford. You needed people who had the money to buy the expensive machinery. You can keep going about so many other minerals the same way.

Even when our society was agrarian, which covers a time period from about 8000 BC till the industrial age, for a large part of this period the land was in common use. Members of the society took part in the agricultural activities for collective sharing of the produce. In fact, the surplus was deposited in common granaries and not in the coffers of some rich millionaire.

When agriculture was invented the society was based on small groups perhaps not exceeding 50 in numbers. So, the concept of kingdoms and empires were not there. There was no king or some capitalist who received preferential treatment. There was just a group leader. As food supply became abundant the limitation on the group size was removed. As the number of people in a group increased to thousands social order-generating mechanisms evolved. These included city-states to start with. There was a king who took the responsibility to protect the group against rival groups and mediate equal sharing of resources which means that the surplus food was held in a common storage area. The ploy of divine sanction was used to win the support of the people and the common storage areas were considered as houses of Gods. This was probably the origin of the temples. Temples therefore effectively controlled the lands. The people who did other societal tasks like soldiers and craftsmen were rewarded with the surplus food as almost like wages. It is also thought that the temples which had the control of the lands may have rented the land to people and this could be one of the earliest profit-oriented economic activity with the only difference that the profit maker had the interests of the people first rather than themselves.

As societies became bigger the governance of the states became a challenge. Overseeing free riders and unequal sharing could not be done with ease. Evolution of bureaucratic structures led to the origins of regional heads who worked to govern the states under the direction of a common king. These regional bureaucrats were probably related to the king or very close to him. They enjoyed this special privilege of overseeing the regional governance. Because the economy was solely based on agriculture and limited number of specialized crafts for thousands of years there were no capital-intensive businesses and hence the concept of capitalism was not yet born. But, the control over land probably slowly evolved towards ownership as time moved on. Large swathes of land came under private ownership and the era of Feudalism was born. The Feudal lords gave pieces of 'their' land for peasants who wished to use the land for growing food and in return the Feudal lords expected them to do some service for them.

Karl Marx also used the term 'Feudal System' when he analyzed society's economic and political development, describing feudalism as the political order coming before capitalism. For Marx, what defined feudalism was the power of the ruling class (the aristocracy) in their control of arable land, leading to a class society based upon the exploitation of the peasants who farm these lands, typically under serfdom and principally by means of labor, produce and money rents.

Mark also used it as a model for understanding the power-relationships between capitalists and wage-laborers in his own time: 'in pre-capitalist systems it was obvious that most people did not control their own destiny — under feudalism, for instance, serfs had to work for their lords. Capitalism seems different because people are in theory free to work for themselves or for others as they choose. Yet most workers have as little control over their lives as feudal serfs'. Feudalism itself decayed and effectively disappeared in most of Western Europe by about 1500 AD, partly since the military power of kings shifted from armies consisting of the nobility to professional fighters (effectively reducing the nobility's power), but also because the Black Death and the consequent severe reduction in population reduced the nobility's hold on the lower classes. The system lingered on in parts of Central and Eastern Europe as late as the 1850s. Russia finally abolished serfdom in 1861. Even in India the Feudalism existed under the title of 'Zamindars' who were regional heads who had the authority to control stretches of land but effectively using the land as a private property. They may have paid some portions of the earnings as tax to the rulers but they were indeed the bosses of the poor laborers who worked their land.

The French abolished the Feudal system in 1789 at an early stage in the French Revolution. The historian Georges Lefebvre explains how at an early stage of the French Revolution, on just one night of August 4, 1789, France abolished the long-lasting remnants of the feudal order. It announced, "The National Assembly abolishes the feudal system entirely." Lefebvre explains.

The agrarian economies ended with the advent of industrial revolution. What triggered the industrial economies is the knowledge of how to use minerals for making industrial tools other than having to rely on stone and animal bones. Second factor was the invention of energy production from naturally occurring mineral elements like Coal. When Coal was used to fire and heat up the water the steam that forms was used to drive machines. The steam power, or water power, or Coal power, whatever way you want to call it, led to cheap energy that could power up locomotives or industrial machines. The cheap transportation methods transformed the way man could move the goods across long distances literally opening the way to long distance international trade. The real global economy was born then. Until then the use of horses to transport people and goods limited the trade that man could undertake. Even the ships, which man has been using for thousands of years, had the disadvantage of long time it took to move the goods to faraway places and therefore limited the return of investment.

The combustion engine that I referred to above in a previous chapter allowed the burning of naturally occurring fuel in a contained environment with the liberation of enormous amount of cheap energy. This energy was used to move vehicles like automobiles as well as airplanes. The jet engine, a product of the combustion technology that triggered the industrialization, made international travel easier and quicker paving the way for traders to visit faraway lands to find their clients. The air cargo concept had an even greater impact on international trade because normally non-industrial products like food could be jetted across the continents as if people in the faraway lands do not know how to grow food or cook the food. Otherwise why would you transport sandwiches and meat to the other side of the globe? More than the need for this to happen it is the handiwork of capitalists who made even the food industry to assume the same characteristics of other trades. Brands like KFC, McDonalds, BURGER KING, PIZZA HUT etc. are ample proof of this.

Our lives have dramatically changed in the 100 years or so. Since the industrial revolution man has found at his disposal various types of items that he had not imagined 100 years ago. One main reason for this is the technologies based on naturally occurring materials we call minerals. The coffee cup and toothpaste we use in the morning, our cars, our electronic gadgets and the windows we gaze through are all derived from minerals.

As well as theses everyday uses, many crystals have unusual properties that can be altered to be useful for high-tech applications. For example, superconductors, lasers, molecular sieves and high-temperature ceramics have been developed from natural crystals.

Computers would not be possible but for Silicon mineral. Steel made from iron is used to build your cars. Bumpers, badges, and door handles are often coated in chromium to prevent them from rusting. Steel has revolutionized a number of day-to-day functions of man including construction, tool making etc.

Two metals, aluminium and titanium, are used a lot in aeroplanes because they are lightweight and strong. Aluminium comes from a material called bauxite. Titanium comes from minerals called rutile and ilmenite.

We all know the importance of Gold in ornament making. Gold is also used in electronics. It conducts electricity very well and is very flexible, twisting easily into fine wires. It is used to make electronic circuit boards and other components.

In the past, the pipes carrying water to your taps would have been made from lead. Lead comes from a mineral called galena, but because we now know lead is poisonous, copper and plastic pipes are used instead.

Plates, bowls, cups, saucers and mugs are made from clay minerals. In the pre-industrial era Chinese Porcelain was a major economic commodity. Copper is also used in electrical wiring, as it is an excellent conductor of electricity.

Ores are mineral concentrations from which useful amounts of metals such as gold, copper, iron or nickel can be extracted. Australia is the world's largest exporter of raw and processed coal for steel-making, and it is one of the world's two largest exporters of iron ore. It is the world's second largest producer of gold and is pre-eminent in exports of titanium and zircon mineral sands. Rutile and ilmenite are the main sources of titanium metal, which is used to make a white pigment in paints. House paint used to contain lead, but now we know it is poisonous titanium is used instead.

Glass that we use on a daily basis is made from Quartz crystals occurring naturally. Cans we use for holding drinks is made of aluminium.

To take a photo, cameras have to have a film in them. Photographic films are coated with different mineral salts. Silver, argentite and other silver-bearing minerals are often used in photography.

Even cleaning materials use minerals like Calcium Carbonate. The salt you eat is a mineral too. Tungsten is a good metal to use to make the filaments in light bulbs.

Wolframite and scheelite are the main ores of tungsten.

Minerals basically allowed man to make different products that had technological applications. This directly led to new business prospects. Even mining the minerals by itself was a profitable venture that made many millionaires and billionaires. Diamond mining and De Beers family is one classical example. They are said to control the entire diamond trade of our planet. What made it possible for them to get this unique right?

I have listed below a few minerals also called Rare Earths and how they are used in the industry. These minerals are not too well known like iron or aluminium.

Non-Lanthanides

Scandium

Aerospace components, mercury-vapor lamps

Yttrium

Lasers, microwave filters, high-temperature superconductors

Light Rare Earth Elements (LREE)

Lanthanum

Camera lenses, catalytic cracking catalyst for refining oil, high refractive index glass, battery electrodes

Cerium

Glass and ceramics, polishing powder, chemical oxidizing agent

Praseodymium

Rare earth magnets, lasers, carbon arc lighting

Neodymium

Rare earth magnets, lasers

Promethium

Nuclear batteries

Samarium

Rare earth magnets, lasers, masers

Heavy Rare Earth Elements (HREE)

Europium

Lasers, mercury vapor lamps

Gadolinium

Rare earth magnets, lasers, x-ray tubes, MRI, computer memory

Terbium

Lasers, fluorescent lamps

Dysprosium

Rare earth magnets, lasers

Holmium

Lasers

Erbium

Lasers, vanadium steel

Thulium

x-ray machines

Ytterbium

Lasers

Lutetium

PET scanners, high refractive glass

As you can see, the rare earths have many uses, and keep in mind that these uses find their way into everyday technology, such as flat screen TVs, smartphones, tablet PCs and hybrid cars. Add to this their use in wind turbines and military equipment and it is plain to see that the rare earths are critical to the global economy. While we read and hear many reports about the wide-ranging uses of oil in our everyday lives, the rare earths are becoming nearly as important.

There are numerous mines and projects around the world, but notable deposits can be found in parts of Canada, Australia, Russia and China among other locations. While rare earth deposits may be plentiful, the costs associated with mining and refining the minerals is a major barrier to entry. The typical rare earth project can cost anywhere from $0.5 to 1.0 Billion.

Looking at all the types of technologies made possible by the minerals it is very clear that the limited agrarian economy of the pre-industrial age had every reason to become a thing of the past. But, unlike agriculture, mineral-based technology needed money to make the tools required for mining as well as using the mined ore, set up factories to make the products, highly skilled work force etc. all of which dependent on organized capital-intensive organizations. The attraction of the huge profitability made people scamper to exploit the opportunities. Quite often forceful means were used by countries from the West to gain access to resource-rich territories. As I said earlier the contracts to mine them were given to private companies which meant that neither country got the full benefit except the money-hungry capitalists. In African countries the laborers were made to work extremely long hours at negligible wages and these unlawful practices were endorsed by local rulers because they were being paid from the proceeds of the sale of the mined product. As you rightly imagined the African state leader would get 200 million dollars when the private foreign company who got the mining contract will make 2 billion! To add more misery the ruler of the poor African state would use that fund largely for his private use. In the end the poor citizens of the resource-rich nations end up having nothing to eat even while their naturally endowed assets were being plundered by a select few. And still you want to ask me what is wrong with Capitalism? Didn't it create jobs? Didn't it make available cheaper products of technology? There are many crappy arguments such as this.

# CHAPTER 8

### EVOLUTION OF BANKS

It is said that the monetary system is deliberately shrouded in an intricate, hard-to-fathom ways of dealings that an average person has no clue about what is money, where it is coming from and where it is going. This facilitates financial cartels such as banks and multinational corporations.

There have been more than 120 financial crises of different shapes and sizes in the last 25 years. There have been about 90 bank defaults in the last 25 years. What does this tell us? Please note that this is only the last 25 years. If you look at the entire history the numbers will be staggeringly high. With this information it is difficult to believe how come such failure-prone institution such as a bank came about into existence. Why did we need the banks?

Credit is the engine that runs the economy. People have to borrow. This keeps the economy engine running. There has to be a source of money somewhere that can be lent (for a profit) and a bunch of people who want to borrow. That is economy in a nutshell for you. This practice has been going on for millennia in various forms and shapes. Organization of the banking industry as we know it may have started a couple of centuries ago but the principles are the same.

Not only the businesses and individuals are the ones who need credit to do various things but also the government. The government needs to have credit for various developmental projects including wars. So they borrow money as well. They issue securities and bonds which people and corporations can buy. Because it is issued by the government people imagine that their money is safe when their securities are bought. That is why major fund managers and even other governmental treasuries buy securities and bond issued by countries such as the U.S. For example, China apparently has 'lent' more than a couple of trillion dollars to the U.S by buying their securities. The Saudi Arabian government has lent almost a trillion dollars to the U.S as well by buying US treasury bonds.

Outwardly, we are all led to believe that the government prints the currencies to be circulated in the population. A study in UK mid-2000 year suggested that only 3% of the money in circulation is paper currency which is printed by the government treasury. The remaining 97% of money in circulation is electronic currency issued by privately owned banks. So, the fundamental belief that your money is safe and backed by government is false. This must be a shock.

Today if you had a bank account in the UK and had a million pounds deposited in it what would you get if your bank collapsed? The fine print of your bank account rules state that the bank will only hold itself liable for 70,000 pounds. In other words, you will have to forget the remaining 930,000 pounds. I am sure the readers will agree this is blatant disregard to fairness. The banks made money with your money by charging interest to its borrowers, risked your money by loaning it to people who cannot afford to repay it, and when the money did not come back decided to write off its own debt to you unilaterally. It does not hesitate to do that to millions of its own other customers.

We have seen this happen in other European countries like Greece recently. People were unable to withdraw their own money from their banks.

Simple rules of the economic systems that operated in the past required the borrower to have some form of asset that will guarantee the return of the borrowed money to the lender. If you were to go and apply for a loan in a bank they would surely look for some sort of proof that the borrower has a steady income or some other asset which can be used to secure the loan. In 1931 UK suspended the gold standard that was the security for public deposits. People could exchange their pounds for equivalent value of gold anytime. The confidence in pounds sterling collapsed when the gold standard was removed. In Sweden silver was used a standard. The practice of abolishing gold standard has taken effect in all countries since then. In 1971 President Nixon announced that the US was removing the gold standard as well. This again means your money is not safe anywhere.

In the US the dollars are printed by the Federal Reserve Bank. Most if not all people generally believe that the Fed is a US government enterprise. It would be rude jolt to readers if I tell you that the Fed is a consortium of private bankers who print notes that are lent to the US Government and to the public! What?

In November 1910 a group of the richest and powerful men in America met secretively to draw up a reform proposal that will help regulate the banks. The ideology was good and welcome. But, the problem was the people who met to discuss the ways and means of regulating the banks were themselves private bankers who had all the vested interest in the world to make the regulations suit them. Senator Nelson Aldrich was the father-in-law billionaire heir of the Rockefeller dynasty, John D. Rockefeller. He had the job of overseeing the nation's monetary policy as he was a central figure in the Senate Finance Committee. The press referred to Aldrich as the 'General Manager of the nation'. America's who's who of the banking sector were included in this secretive meeting. It included Frank Vanderlip, President of the National City Bank of New York; Henry Davison, a senior partner in J. P. Morgan Company; Benjamin Strong, President of the Bankers Trust Co and Paul Warburg, heir of the Warburg banking family and son-in-law of a famous New York investment firm.

The meeting was held in the secluded Jekyll Island Club which included the membership of the Morgans, Rockefellers, Warburgs and Rothschilds. Effectively it was the banking cartel which got to write down their own rules. Amazingly, they were successful in conspiring to write the legislation that was to become the Federal Reserve Act. Until 1935 this secret meeting was concealed from the public eye. For a quarter century the American public had been taken for ride by a bunch of bankers who came up with the idea of a Central Bank concept in America to be owned by the banks themselves. This system would organize the nation's banks into a private cartel that would have the sole control of money supply itself. Yes, the Congress gave them the authority to issue the nation's money. The sovereign right of printing and issuing money was passed onto private banks!! Thus was born the Federal Reserve Bank which still today most gullible people all over the world imagine it to be the Central Bank of the U.S. In reality, the control of money and credit was given to a few men.

Why did this happen? The U.S economy was plagued by problems over the preceding years. A combination of bank failures and credit scarcity made the government think about a better way of managing the economy. In fact, the Federal Reserve is the third attempt at creation of a central bank in the U.S history. The First Bank of the U. S and the Second Bank each lasted for about 20 years each. The Second Bank of U.S ended in 1836. Until then the two central banks issued currency, loans, accepted deposits, purchased securities and effectively acted as fiscal agents for the U.S Treasury. The U.S government was expected to have only 20% capital stock shares and to appoint 20% of the board members of each of these two banks. So, the precedence of a privately controlled banking cartel was set at least a 100 years before the Fed Reserve was born.

In colonial America the economy was running based on European coinage, barter and commodity money. This was continuing before the independence from British rule. By end of the 17th century many colonies began minting their own coins and paper currency because there was a foreign coin shortage and problems associated with barter and commodity money. These colonial banks did not take deposits or make loans and in that sense were not really working like the banks that we know today. They issued paper currency backed by land or precious metals, This means that the value stated in the paper currency would be guaranteed by these assets. The sources of credit were the merchants and individuals. A Federal banking system was expected to solve the nation's credit problems after the war of independence.

The idea of a central bank in the U.S started way back in 1789 following the ratification of the constitution. Secretary of the Treasury at that time, Alexander Hamilton, wanted a plan for a federal banking system which will provide credit to the government and businesses and to establish a national currency. Thomas Jefferson, secretary of state at that time, opposed Hamilton's plan and preferred a state-controlled economy. In his view the constitution did not allow for the government to charter a national bank to issue paper currency. Having won the debate Hamilton led the way to the chartering of the First Bank of the United States in 1791. It ran for 20 years but could not win support again in 1811. Lack of such a centralized bank and credit structure led to proliferation of state banks with each issuing a currency of their own. The value of these currencies was questionable and was accepted in one state but not the other.

So the US government decided to charter the Second central bank in 1816. This would not last more than 20 years. Then followed a period of reckless banking wherein almost 8000 state banks operated by about 1860. Each one of them issued a currency note of its own. People panicked about their money and whenever they tried to get back their money there was not enough cash in the bank to repay all. This led to their failure and when people hear about one bank failing they lost confidence in banks and rushed to their banks to withdraw their money. A succession of bank failures kept happening. In 1863 there was an attempt to stem the madness by the passage of the National Banking Act which created a uniform national currency and permitted only nationally chartered banks to issue bank notes.

In 1907 a seriously worrying panic reaction affected the banks in a major way. J. P. Morgan, who was a private financier at that time, intervened and helped with loans to financial institutions. In today's modern world the government intervenes and bails out the banks like what happened in the US recently when as much as 780 billion dollars were infused into the financial system.

In 1907 the major bank panic prompted the congress to start thinking about the re-establishment of a central bank system again. This is what a Canadian Journalist called Naomi Klein wrote about as 'The Rise of Disaster Capitalism'. She argues in her 2007 book that economic policies and free market economies triumphed not because they are good but the commotion, panic and confusion that results each time there is an economic crisis makes people vulnerable and otherwise unpopular or unsound reforms gets pushed through easily. The policy makers nor the public have much clue whether it will work but in the state of heightened panic anything is better if there is a hope.

On the same line of thinking it can be deduced that 1907 was a ripe panic time when the public were in the mood for something new even if it is not proven. This was the time the private banking cartel schemed up to take over the entire economy of the entire US. The Federal Reserve Act was passed in 1913 and the American Central Bank was born.

Central bank concept is not something invented in the US. Aldrich himself did not believe in the centralized banking but after a trip to Europe he was able to see how German and British central banks worked and he came back with a plan. That plan was to turn this idea to the advantage of some private bankers.

The principle of a central bank is simple. It is supposed to aim at creation of a common currency instead of each and every bank issuing its own currencies. Secondly, if it can be shown that the government is even marginally involved then the public feel safe with their money. The third more important objective is that the government can pass on the responsibility of creating credit in the society to the bankers so that the economic engine will keep running. Even the government itself will want to borrow money to fund its projects often wars.

The world's oldest central bank is the Swedish Riksbank. It was founded in 1668. By 1689 Charles XI, the monarch at that time took control of the bank. In 1709 Riksbank faced a crisis when all depositors attempted to withdraw their money following the war defeat at Poltava. The bank had to simply freeze all depositors' accounts. So, banking crises are not something new.

In England the central bank was founded in 1694. William Paterson, a Scotsman, was behind this plan. It was founded to fund the war England was fighting with France at that time. The defeat at the hands of the French made England want to rebuild their navy which needed funds. The King and Queen at that time, William and Mary, were two of the original stockholders. The bank started accepting deposits from the public which amounted to about 1.2 million pounds at that time which was used to start ironworks and develop agriculture etc. The idea to start a central bank to fund the government initiative was partly due to the fact that other forms of borrowing available at that time for the government would have needed payment of almost 8% interest! The central bank was construed by Paterson to help improve nation's finances by making credit available. In 1797 France again declared war on Britain and people panicked and rushed to get their money back from the Bank of England in the form of gold. Then Prime Minister William Pitt had to intervene and stop this payment. The lack of security for your money deposited in the banks has always been there!!

In 1844 the Bank Charter was passed in England and Wales that regulated the issuance of bank notes. Only the Bank of England was allowed to do from then on but this charter was not applicable to Scotland and Northern Ireland. This meant private banks there can print notes which they still do so! The seven private banks there must however set aside assets that are at least the value of the bank notes they have in circulation. This is the protection offered to the depositors. Partly these assets are held as large denomination Bank of England notes. They include 1 million pound notes called Giants and 100 million notes called Titans!!In England the last private bank which printed notes was Fox, Fowler and company which stopped printing in 1921.

The Bank of England issued stocks to raise funds for the World War I and it is told that it was not oversubscribed and the BOE had to buy back some of its own stock to keep the public interest.

In 2008 the BOE and UK government rescued banks by arranging several sources of funds to the tune of almost 500 billion pounds in loans and guarantees. A further 50 billion pounds was made available in 2009 as more was needed so that banks can continue to lend to businesses and individuals. As I said before lending and borrowing are the epicenters of the economy.

What this means is that economy is not controlled by the government but private companies. Central banks in countries other than US seem to have had a start under the control of the monarchy. No vested interests operated to turn it into the favor of selected few wealthy men. The idea of a central bank as a source of credit to individuals, businesses and the government was pretty much fulfilled.

The famous Rothschild family was said to control half of world's wealth at some point in time last century and they were in fact aiming to create a world government which failed. This family controlled a highly significant amount of financing in Europe for a long time. Rothschild family was indeed instrumental in US Federal Reserve creation as well. The number of banks owned by the Rothschild family the world over exceeds a hundred. Most of them carry the name 'Central bank' in the respective country where they are situated!! Does greed have any limits?

# CHAPTER 9

### LEARNING FROM NATURE

Biological systems are at least 3500 million years old. I am talking about simple life like bacteria. They have been around for more than 3 billion years and that is something to respect. Even multicellular life forms have been around at least a couple of billion years. Higher life forms, i.e. ones with a brain and nervous system, have also been around millions of years. The more complex is the organism the more sophisticated the inner working of it. It comes by evolutionary learning. The genetic algorithm, as they call it, helps the life systems to try and test a number of solutions to any biological problem and the selected one is imprinted as a new trait. We all agree that the biological systems have perfected the art of living honed by millions of years of trial and error.

I alluded to a lot of similarities between the way natural life systems conduct their economy and the way we do it in our monetary economy. The question now is who is doing it better? Who is good at economics - we as social humans or we as a life system?

When you look at a child you know that it is still learning the basics of the world and you do not expect a child to know or comprehend a lot of things. As the child matures to adulthood things become clearer and the young adult can decipher the complex workings of the world to some extent. An elderly individual is said to carry the wisdom of 60 or 80 years of living in the world and naturally the maturity and understanding outsmarts the younger people.

When you look at an elderly man you feel his advice is worth considering because you feel that he has the experience that would have taught him a few lessons. Even at work someone more experienced is sought after for solutions than a novice. This is common sense.

Man has come a long way since splitting from the Chimpanzees. That was about 6 million years ago. The branching of his current form (Homo sapiens) form his most immediate predecessor happened about 200,000 years ago. Man lived almost like an animal for much of the time from that point to about 10,000 years ago. The living conditions were indistinguishable between man and animals. In fact, it is said that the life of people living in 1800 AD in England, for example, was the same as that a hunter-gatherer 100,000 years ago. One could go to the extent of saying the hunter-gatherer probably had a better life style because his wants were minimal and he did not have to slog all day every day to earn his livelihood. Even his diet was better it is told.

If I told that a biological system has perfected energy economic principles for 3000 million years and I want to compare it with an economic system developed by man in the last 400 years which one do you think will be better?

Man did not need economy for most of the last 200,000 years since he became a Homo sapien! He shared access equally with his fellow beings to all that nature offered in terms of food and shelter. It has to be admitted that his territory was defined between groups which is akin to market access of modern economies! The hunters could not encroach into other territories without a fight. The modern economies have defined markets and any country that wants to come into their market, or if they want to sell something in an external market, there has to be an agreement. So, even primitive man, for that matter all animals, had a taste of the market size all along history.

Let us say a bug infects you. The bug has no business to invade your body. Why did it do so? This is because the bug wants to gain entry into your body and use your body resources for its own personal purpose. The literal word is 'infection' which is the same as 'Colonization'. It is true that a number of bugs just 'colonize' without meaning any disease (war). So, the concept of 'colonization' as a means to unlawful access to natural wealth is also not an alien concept in life systems. Perhaps nature permits this and one could not really blame the colonial empires from Europe for having done this for over 500 years in the recent history.

Hunting itself is unlawful gaining of personal nutrients held by a life system. The more powerful life system gobbles up the weaker one. Acquisition of a business enterprise by another bigger enterprise perhaps is also a naturally endorsed strategy to grow.

The energy economics of a life system is based on socialistic principles. Nothing in a life system is owned by any single or group of cells. Ownership is a prohibited phenomenon in life systems. Even in human societies ownership is something new. It may be for about the past 800 years. But it has become so rampant so rapidly/

As man evolved the political structures there was a point in time when laws were enacted to help people own things and their rights were protected. This was important for people to create a new phenomenon in nature which is the unnatural claim of ownership of land and property.

In nature life systems only stake claim to what is held within their physical confines. What is held within their physical body obviously is hard-earned by it by the food seeking behavior. Nothing is held by a life system more than what is possible to hold within its body. Some amount of storage of the excess is allowed in the form of fat (like a minimum bank balance) but overdoing it is met with a punitive response. There is no external regulator of this greed but something in-built within the life system will cause disruption and chaos in the metabolic balance of the organism. The ensuing diseases make life difficult for the life system and eventually death follows. This is a great way to avoid unnecessary hoarding of food energy by the individual life system. Obesity is silent killer and one of the major challenges facing mankind this century. Higher body mass index is viewed so unfavorably with regard to health. But excess wealth is not seen as harmful to economic health of the nation or to the individual. Financial obesity is seen in such a miniscule minority of the population worldwide while body obesity is rampant. Even the minority of the financially obese have the potential to upset the whole system soon. This is a striking observation which economists have to learn - how to avoid financial obesity by means of inhibitory and/or punitive measures in an inbuilt manner rather than leaving it to the liking of the greedy millionaires who do not know when to stop.

But, how do we ever find something equivalent in our social economy? Can we hope to put a limit on wealth held by an individual? This is something we need to work on to make our economic system equitable. One approach could be to introduce a political structure wherein the individual never gets a chance to hoard wealth. A socialistic political system could pay a fixed wage to all concerned irrespective of the work they do. This wage should be adequate to feed themselves and their family as well as covering the basic needs. In addition, private ownership of businesses and factories should be prohibited and these ventures should be held and conducted as Government-public joint ventures where each individual has an equal share as everyone else. It should not be the case that a rich owner gets more riches by owning the whole lot. In other words, we should move away from capitalism to make these things happen. This is a lesson nature is screaming to teach us. I am not trying to promote political ideology here that communism or socialism is better. I am saying that natural systems shun operating principles based on selfishness.

The next major question we want to address is how much control should the state have on economy? Do you want the state to dictate all the rules? Do you want the state to call all the shots? Or, you want the state to be far removed from all the key decisions so that free market principles can guide private entrepreneurs?

Theorists talk of a number of models of economy in general and capitalism in particular. To me it makes little difference what type of capitalistic model is operating in different countries. If you preferred one or other model of Capitalism then I guess the control of economy is more with the rich elite rather than the government even though all the policies apparently appear to be coming out of the state departments. We all know the level of influence which the industrialists put on the politicians to win support for their vested interests and make it look like genuine governmental initiative. This happens in every single country. The policies are made for the benefit of the rich. So, the reality is some sort of a pseudo-democratic situation where the gullible public is made to believe that the government takes care of the poor as well as the rich. Have you seen any seen any nation levy income tax on the rich at a higher rate? There will be slightly higher tax band for those earning above a cut-off level but for the ultra-rich why do you allow them to take home millions? Can't you tax them like 70 or 80% which will still leave multi-millions to them? Many rich people find tax havens where they can conveniently evade the income tax whatsoever. Why would people allow such loopholes if globally all governments collaborate to eliminate such loop holes? I remember seeing a TV documentary where the narrator said that a multi-billionaire from Switzerland paid only less than a million as income tax because he was able to use so many loopholes in a fully legal manner!

Anyway, the point I want to raise is which is better - governmental control of economy or businessmen control of economy?

The answer is a little bit obvious in the sense only the businessmen control the economy under the guise of democratic structures in the modern world. This is the harsh truth.

How does it work in life systems? Can we learn anything from there?

The governance of the energy economics is decentralized with little control of it by the government which in the case of the life system could be the brain and nervous system Yet, it is not based on private ownership.

Of course the government does not include only the president or prime minister or the king. It includes the council of ministers and the bureaucrats too. So, the analogous thing in a life system would be not just the brain only but also the 'administrative' organs like the endocrine glands. This includes the pituitary, thyroid, and adrenal glands. One could safely say that the governance of the higher life system includes the central nervous system and the endocrine glands.

The brain is often only the decision maker for strategic things like deciding to fight or take to flight in case of danger situations that pose a threat to survival, mate selection, seeking food and eating thereby ensuring nutrient and energy supply, controlling the movement and locomotion, rest and sleep, decoding environmental signals to adapt well, skill learning, and cooperation with fellow beings.

Many functions are decentralized in life systems including energy economics. In fact the brain has very little role on the economy of energy in higher life systems with or without the assistance of the bureaucratic endocrine organs. The brain has little control on the pituitary and other endocrine glands. The brain does not command the endocrine glands to start or end the energy release.

I have to describe a little bit of the energy metabolism of life systems for readers to comprehend what I am saying.

The energy needs of life systems can be short-term need or a long-term one. We could even look at it from the point of view of whether the need is to meet a planned growth operation or an unplanned emergency. Short-term or unplanned needs can be short-lived. They may need a small to moderate amount of energy currency. Such small energy currency needs are met by 'liquid' energy like circulating blood glucose which is almost like your hand-held cash. Even in your day-to-day life you have varying grades of financial needs. Ranging from small purchases we can go up the scale to big purchases or big spends like buying cars, buying houses, or funding your kid's education. Obviously, depending on the size of your expense your plans would be different. When the body needs some energy for an immediate need, like running away from a predator, this will have to be dealt with by initiating a response that is not dependent on the brain. Instead the body's bureaucrats (endocrine glands) can achieve this. To accomplish the running the muscle cells of the legs will need a sudden burst of energy. The heart muscle cells also have to support this activity by pumping harder and faster which is again energy-dependent. The lungs have to breathe faster and deeper to draw in more oxygen to combust the energy. The blood vessels have to widen to allow greater amounts of blood to flow through. Then there has to be coordination between the eye and ear for sensory input relating to the predator's approach and the obstacles on the route you have chosen for the run. In case you have to change your tactic from running to fighting the predator then the task gets more dangerous potentially demanding more energy for not only the immediate job on hand but also to meet the needs of the healing response to recover from the injuries. Then again you have the need to activate your immune system to protect your body from invisible microbes. All these costs add up. Where is the energy coming from?

Our body will look to meet these needs by accessing the energy stores which are no different from your banks. Signals are sent to the body energy banks to release energy fuels immediately. The command center for these signals is the endocrine glands like pituitary, Thyroid and adrenals. The actual signals are the hormones like cortisol and adrenaline. There is no place for the brain and nervous system in this process. The sensory receptor cells that capture the visual and auditory information about the predator is sent to the brain for processing and once the danger is perceived the 'decision' is taken to fight or flight. Both ways you need energy resources. This is taken care of by the bureaucratic glands and not the brain. Hormone signals are sent to the body fat stores (held in muscles and fat tissues) and to the sugar stores (held as glycogen in Liver) to release the fuel. Once adequate quantities are liberated the feedback loop shuts down the response. What I am describing here is a standard process happening in life systems that deals with crisis in energy economy. What I am going to describe is another day-to-day process where energy currency is periodically infused to keep the system running. That is the hunger-feeding cycle.

A fall in blood sugar is perceived by the sensors in the hypothalamus (a part of the base of the brain) as impending energy crisis. Immediately signals are sent electrically to the feeding center to initiate the hunger feeling. This will force the animal to seek food and replenish the nutrient levels. This is a cybernetic feedback loop. Once the feeding happens and the glucose level in the blood increases then the hunger signal is turned off to stop overfeeding. The organism is satiated. This is amazing.

The point to be noted is that the release of energy funds (in the form of fuels like fat or glucose) happens in varying grades depending on the degree of crisis. Daily requirement of energy funds is met by new arrival of food and that is why we eat three times a day. For a nation this is like the income generated from trade, taxes etc. This has to keep coming regularly. When this stops that is when you start drawing upon your reserves. If you keep dipping into the reserves too often and continuously then the system starts the downhill journey.

The similarities between living and non-living systems are fine except for a few points. The living systems do not have the equivalent of 'printing' money from thin air. You need to have the food resource to start with. Secondly, there is no central control of economy in living systems. How do we deal with this? Thirdly, our modern economy, unlike living systems, has no mechanism to block excessive acquisition of assets. What can we learn from this?

Living systems, just as non-living systems, have planned growth as part of their existence. That needs resources as well. Whether it is planned growth or unplanned emergencies the energy and other resource needs are dealt with through external or internal sources. The striking feature of a life system is that even though external sources are often plentiful there is no attempt whatsoever to amass too much of it. The system does not allow that. Can anyone eat more than a certain amount even if you have a whole table full of food? This inbuilt control is conspicuously absent in our modern economy. Whether it is the individual or a nation or a corporation they keep working on accessing as much as they want from the bounty available in the world. This is a fundamental problem. This not only makes equal sharing impossible but also leads to unhealthy outcomes.

The other major observation is that whether it is externally or internally sourced energy funds the usage of it is for the whole life system and not for selective, privileged few. The immediate needs of the tissues and organs involved in the task ahead is taken care of rather than needlessly piling the funds to private owners while the rest of the world is starving. This never happens in life systems until it turns cancerous. In that sense I feel our economy has taken the characteristics of a cancerous state and we need to treat this cancer that afflicts our economy to get better.

We need to note that the body energy banks are common property and not the asset of a select few cells or tissues. Ownership is not a valid phenomenon in nature. Sorry about that.

In our modern financial world we do not have scarcity of currency but an illusion of a shortage because individuals may not have enough money in their wallet. But, there is so much excess stashed away in various forms and shapes by a minority. As I said the oil that lubricates the energy engine is the spending of money by people to buy goods and services. If it is not in circulation then the economy engine slows down to a state called deflation. Economists deal with such a state by infusing more money into circulation. This can be achieved by the banks lending more especially at a lower interest rate. Or, the government or the authorized bank can print more money and flood the system. Deflation in our modern economy is almost like a state of starvation for a life system. Life systems address this by the eating behavior wherein they acquire food energy. This has to be achieved within a reasonable time to end the hunger. Prolonged delay in eating will make things worse and the life system enters a more serious state. One could use the word starvation to indicate a state of prolonged hunger. Complete absence of food intake is rare beyond a day or something. People at least eat once a day, in whatever quantities, to replenish even partially the energy levels that are decreasing. When this situation extends to other life systems due to a general lack of food stock then one could say a state of famine has ensued which is equivalent to the recession or depression in economic language.

Modern economists would deal with this situation by pumping in more currency printed from thin air. They try to beat deflation by creating inflation. Worthless, un-backed currency is as worthless as the Monopoly game. But that does not deter our economists. They have followed the same strategy time and time again over the recent history driving the economy towards a crisis. Natural systems do not do that. They never are able to 'generate' energy from nothing. The life systems can only do that by capturing the food which acts as the source of the energy currency. If there is no food there is no energy currency. So, inflation is an alien concept in life systems. This can be a good 'food' for thought for the economists of today. How to create an economy model that does not have inflation.

Life systems are not stupid enough to let immediate food availability as a determining factor of its survival. They have a certain amount of back up energy held in the form of savings. As I said earlier it is held in the form of the fat and sugar stores. These fat stores are mobilized to provide the energy when needed and in required quantities. You don't spend all your savings in one go, do you?

The body also has some amount of energy savings held in the form of glycogen (animal form of Starch). These stores can be found in the liver and muscles. These sugar energy banks are far more 'liquid' than the fat energy. The quantity of energy stored as Glycogen is far smaller than fat but indeed it is useful as a rapid response.

The body also has additional sources of energy that it can draw upon when needed. The third form of energy is the ketones. They are actually incomplete breakdown product of the fat metabolism. It is almost like coal. Coal itself is a burnt form of carbon. But the full energy content of carbon is not utilized yet when it is still in the form of coal. It can still be combusted to release heat energy. Same way the fat hydrocarbons (body fats stores) have some residual incompletely combusted products called Ketones which come in handy in dire situations. The quantity of energy that can be made available is less though.

What would you do when you have run out of bank savings and hand-held cash? You can use your valuable assets like jewellery and car. You can sell them to get cash. These are all readily accessible sources of cash. Real estate can hold substantial amount of value but can take some time for it to yield fruits. Yet, real estate is indeed an option. Life systems also start mobilizing energy from other unconventional sources when they run out of the usual sources of energy. They start breaking down their proteins for energy. It is almost like liquidating your immovable assets as a last resort.

When we are in the red we stop all developmental activities, don't we? We don't think of any new purchases or investments. We hold the reins when it comes to spending. The government does the same. They stop all infrastructure projects. All subsidies are stopped. In the case of a life system this extreme catabolic state is indicative of malnutrition which can lead to problems. For example, lack of energy or raw materials to make vital proteins and other molecules means that the life system starts failing. They cannot, for example, make antibodies which are important proteins needed for fighting infections. So, the malnourished person becomes prone to infections. This is like a depleted army of a state that cannot defend itself anymore because the manufacturing and supply of arms cannot be achieved. Either you cannot keep pace with making arms or you do not have the money to fund the arms production because the country is steeply in debt and has no money to pay the soldiers and feed them. In any case the country succumbs to the invader.

War torn nations are like malnourished individuals. The energy economy is unable to run. Apart from being unable to defend against invaders due to depleted economy there is no room for any growth and development activities. Wars cost a fortune for the state. That has not deterred rulers from waging wars time and time again throughout recorded history. When humans were living in small groups the inter-tribe clashes over water and hunting grounds were localized and limited in their effects. At best there may be loss of a few members of the clashing groups. But if your total count is only a few tens of people in the group even this small number of loss of lives can impact on the group strength. When a nation goes into war the effects are wide-spread and long-lasting. It sometimes affects a whole generation as it happened with the two World Wars. Even later the Vietnam war and Gulf war etc. have continued to traumatize our society. I remember reading some time ago that the money spent by the US to keep up all its military bases around the world is 2 billion dollars every day! That is a lot of money. It could be used for a number of good things but US prefers to blow it on war or in preparation of war. If you gave one of the daily 2 billion dollars to universities they would probably be able offer free education to students or they will be able to invest in research that will help find new things that will benefit the mankind. Instead the US incredibly decides to channel the 2 billion dollars every day towards the military! I recall reading long time ago that the money spent by the US in the Vietnam war could have been adequate to lay roads made of gold!

By doing the unjustified spending on military and wars the US economy now is in doldrums. They have to cut back on healthcare, education, infrastructure projects etc. and probably raise taxes also. They also do more harm by raising more money by borrowing which increases the national debt and the annual repayment burden. This burden will weigh down the US government for years directly affecting the citizens in terms of the reduced or absent social benefits. The government also does other harm to their own economies by printing more currency which devalues the currency such that the people will have to spend more to buy the same goods or services. Almost magically the government has conducted an act of thievery. The loss of young human lives in hundreds of thousands is not going to go away unnoticed. Apart from the emotional side of things the loss of the productivity because of loss of young lives leaves the country staggering.

Wars are bad economy. The economic advisors of governments need to do better than what they have done so far. The institutions like the United Nations should be empowered to avoid wars through mediation. It should not be a weak body easily influenced by the powerful nations like the US. The US government may have contributed significantly to the modern conflicts supported equally by the Europeans. The US saw war as an opportunity to wealth creation through arm sales and access to natural wealth of the affected nations. Much of political turmoil faced by the Middle East today can be traced back to the European interference since the turn of the 20th century. Oil was the attraction that made Europeans, particularly England and France, to meddle with the politics of the Middle Eastern nations. The poverty that exists today in Africa is directly a result of exploitation of their wealth by the rich Western countries who robbed the Africans of their immense natural wealth leaving them impoverished. Where there is hunger and poverty the social unrest follows. The violent internal conflicts and civil wars that happen within Africa may have been avoided if there was no interference from the Western world.

The lesson for modern economists is that equality to wealth is possible if there was less of any external governmental interference in matters relating to natural wealth of foreign lands. The matter should be best left to the concerned nations. How could economists influence these kinds of political developments? As of now it looks unthinkable. But that is probably why things have been so bad. Our social organization in terms of politics and governments has been more oriented towards selfish interests rather than one of equality and sharing. I could even use the word 'cooperation'. What if we had a global cooperation wherein the natural wealth is shared rather than exploited? Of course oil is only found in some parts of the world. Of course diamonds and other minerals are found in select geographical regions of the world. The same can be said of all kinds of natural wealth. How nice it would be if the nations having the right of use because these assets are within their geography to gain significantly while some foreign powers (governments) can contribute in the mining, processing and other tasks and get a fair share of the asset too? But, what happens is that private companies end up gaining full control of the foreign assets after their governments strike a deal with the nations or through hostile means like war. Voluntary sharing of global resources between nations in an equitable manner is something for which we humans have not found any answer yet. May be we are still in our infancy when it comes to global governance. Our immaturity does not allow such luxuries but may be in the next few millennia we will get around to solving this issue. But, a life system such as humans has solved this problem of 'global' cooperation in a fantastic manner. All multicellular life forms have done so. There is no resource within a life system that belongs exclusively to one organ or one tissue. I will elaborate on this a bit later.

For a life system an infection is war. For a human life system infection puts extra demand on the energy needs to run the 'war machine'. The war machine of a life system is the immune system. Cellular soldiers like neutrophils, lymphocytes and phagocytes are put to work. A number of 'military bases' do operate in our body. They are the lymph nodes which contain the lymphocytes and neutrophils along with the infrastructure for production of 'arms and ammunition' like antibodies and cytokines. These are biochemical molecules that carry out a wide variety of immune functions. A lot of raw materials are required to make these vital war machinery in our body. You need to divert a lot of nutrients like amino acids (building blocks of proteins) towards this activity. You have to note that these amino acids come from your food proteins and in peacetimes they are used to make useful cellular stuff but in wartimes (infections) they are diverted to making 'molecular ammunition' which does not help in any way to support growth and development projects of the body. Even worse the body breaks down already formed protein assets and free up the amino acid pool that was held in them. The liberated amino acids are shunted to war factories.

One of the other major undertakings required for our body during an infection is recruitment of more 'cellular soldiers'. I said that lymphocytes are stationed in the lymph nodes as rapid response units but there are not enough of them. There will be an activation of proliferation of new lymphocytes from the existing pool. This will make the lymph nodes to swell up as palpable nodules. When the doctors find a swollen lymph node in any part of the body they can immediately conclude that there is some sort of an infectious war going on in that vicinity. The inflated lymph node is all the inflation you find in a life system when you have an economy crisis.

Like we print bank notes to cover the deficit spending the body has to multiply the number of lymphocytes to meet the demand of the infectious war. How many lymphocytes are we going to need? Can we mobilize some from nearby bases within the body? Multiplication of newly created lymphocytes needs energy and cellular raw materials. So there has to be a tight rein on the spending. If the war is limited in size or rare then the life system has no problem in coping with this. But, if the wars are too frequent or major the end result can be collapse of the life system. That is why people die of infections.

Life systems have inbuilt mechanisms to avoid infections. This is achieved by way of a number of protective adaptations that help thwart attempts by the invading microbes. It could be simple anti-bacterial substances present in skin, saliva etc. that will prevent microbes form settling in. Even the skin is like a fortress that prevents easy access to the internal environment of the body. The gut has a lot of protective immunity to tackle microbes reaching through the food and water that we consume. I am sure even governments do the same. They have a number of espionage capabilities and defense mechanisms that help identify and prevent enemy attacks. But, by and large, wars between nations are based on political and emotional differences. Historically neighboring nations are always the ones to clash with each other which often has long-standing reasons based on religion, ideology etc. A small incident can revive the tensions that are always in a heightened state like what happens between Palestine and Israel, India and Pakistan etc.. What the modern world needs is restraint in international relations. Natural systems do not have internal conflicts. All the conflicts that I referred to before refer to external conflicts wherein a microbial invader tries to gain unlawful access. So the lesson for us is avoidance of external conflicts between nations.

The problem is that our nations also suffer from civil wars between warring groups within the country. We do not see this kind of a thing inside life systems. No cell or organ fights with the other for resources. Civil wars are often a result of unfair distribution of resources which angers the public. Sometimes it is a result of unacceptable suppressive tactics used by the rulers. Lot of productivity is lost because the manpower is wasted on destructive things. Damage to public infrastructures need a lot of money to rebuild and ironically the lack of money may have been the root cause of discontent amongst the public. Extremist groups create problems weakening the nation further more. At some point the whole nation is crippled with problems, resource limitations, manpower shortage etc. and becomes an easy target for enemy nations to take over. That is also the reason why life systems become susceptible to infections when malnourished. Iraq and Syria are recent examples where long-drawn internal conflict led to the origin of ISIS which further debilitated the entire region. Involvement of Turkey, Russia and US in this mess made things worse and generations of children have lost their future. They do not have education or healthcare. I recall seeing a television program where a reporter was seen interviewing people in the conflict areas. When asked what would make her happy a young girl answers 'may be eating an apple'! It was very moving for me that such simple pleasures have been robbed of innocent people because some power-hungry ruler wants to hold on to power.

When you look at television footages shown on TV the war-torn areas of the Middle East are staggering. There is virtually no sign of every-day life. There are shell-ridden houses and buildings and many of them are actually damaged from bomb explosions. There are no shops. There are no hospitals. There are no schools. There are no civilians on the roads. Imagine the billions of dollars needed to re-build the cities. I will be very surprised if there will be any supply of building materials needed for this purpose let alone finding the money to do it. There has to be skilled manpower needed for the construction jobs and also to work in the schools and hospitals. There has to be new roads built to resume the supply of goods. All of this is not going to be available for some time to come.

Even natural disasters like hurricanes and earthquakes have the same devastating damages that need extensive repairs. Rebuilding a city or nation after a war or natural calamity can be a huge undertaking. The depression seen in early part of 20th century in Europe and US was the result of severe strain put on the nations due to war. History is replete with countless wars that cost a lot for the states. The financial cost to the nations for funding the war, and rebuilding the nation after the war, meant that they had to adopt either borrowing money, raise taxes or mint more coins and notes. The latter had adverse effects in terms of devaluation of the currency which shifted the burden to the shoulders of the public who now can get less for the same amount of money.

In life systems healing of the body after an injury or infection is a resource-intensive job. You do not need much of a repair work if the injury was small like a simple bruise. But even this is a highly coordinated activity wherein there has to be re-sealing of the skin and growth of new blood vessels in the damaged parts. Fibroblasts are a group of cells with a functional role not much different to engineers of our society. These cells can help in laying down new tissue in damaged regions. They can signal the skin cells to multiply and help in re-sealing of the skin breach. This is like sealing the borders of the nation to prevent influx of unwanted elements. The fibroblasts can also send cellular signals for the cells to form new endothelial cells which make up the new blood vessel tracks. This is no different from laying down new roads to help resume traffic. Growth and proliferation of new blood vessels is an important part of healing and repair in life system orchestrated by the fibroblasts and endothelial cells. The fibroblasts can make collagen the 'brick and mortar' of our tissues. The scars that you see in the injured areas are actually collagen deposits and overgrown fibroblasts. There has to be controlled multiplication of skin cells to re-seal the skin. There has to be controlled proliferation of endothelial cells to seal the leaking blood vessels that have developed breaches due to the trauma. This is like dealing with plumbing emergencies. Platelets, another type of blood cell, help form a plug to seal the leaking blood vessels assisted by a highly regulated coagulation pathway. A number of specialized biochemical molecules called clotting factors (all proteins) made by the 'industrial' liver are activated to plug the gaps. Over time the newly made endothelial cells seal the blood vessels for good.

So, making of specialized products like collagen, clotting factors, antibodies etc. drain a lot of body resources leading to a state of deficit spending unless the person eats more to supply the deficit energy. It is said that we need to take almost double of our energy intake, together with protein and mineral supplements, to help us tide over infections and inflammations. Modern economy deals with this kind of situation by flooding the system with newly printed money or borrowing or austerity measures. In this respect both life systems and modern economy seem to work on similar principles but what I find a bit unnerving is the generation of new currency by unjustified and un-backed means by the modern banks to solve the crisis. Can we compare this with intake of food to replenish the 'energy currency' supply? I do not think both are comparable. In the case of natural systems input of 'real' value happens to generate new energy wealth whereas in the modern economies something 'unreal' is used to support the process. I find this uncomfortable. Both cannot be the same.

In the case of nature the only input of new energy comes in the form of sunlight. The sunlight is and has always been the sole source of renewable energy that forms the basis of our food chain on the planet. The photosynthesis is the ultimate generator of food currency. It is a process that has not stopped since time immemorial. It is like a currency printing press that has not stopped for a long, long time. More importantly, it is based on solid stuff that can last for another few billion years. That is what makes natural systems as open systems from a thermodynamic point of view. New input keeps happening all the time coming from a seemingly endless source. We cannot tell the same for our currency printing that happens in our world. There is virtually no source of backing for it and cannot last even for a few tens of years!!

It is OK to understand this from the point of view of (energy) wealth creation over a long term. What about the short term when individual life systems face a crisis? They cannot do photosynthesis on their own. Instead they need to simply eat to replenish the energy. What is the equivalent of it in the modern economy? Can we say the plentiful natural wealth that the earth has stashed away needs to be used to 'fund' the pressing needs of war and calamity? We have the nature's bounties like oil, coal, minerals, precious metals etc. bestowed upon us the humanity. Can't we use them to generate the new wealth that is required? Yes, it makes sense to do so. They are real stuff of value which you can transform to monetary currency easily. What is the problem? The problem is we have messed up with ownership of these natural resources. Today they are in the hands of a handful of private cartels. They are not even owned by the governments. How can we expect the private cartels to give away their 'personal wealth' to fund social rebuilding? Do you see the awkward situation capitalism has landed us in?

When we suffer an infection a lot of damage ensues to our tissues and organs. If it was pneumonia then the affected organ is the lung. If it was hepatitis then the affected organ is liver and so on. There are typically so many types of microbes which can afflict each type of organ. Each of them have their own mechanism of attack. If you count the number of organs and tissues in the body and the number of microbial types it becomes evident how complex our immune system should be to defend our body against them. It is a highly organized task that involves a tremendous amount of coordination and cooperation between multiple cells. The immune defense is provided by the body to protect all types of organs. It is not like each organ has its own type of army that will only work for that organ only. The immune army is for the whole body. That is globalization for you. In our world we not only have individual national armies at the expense of billions of dollars but also use those armies to attack other nations who are part of our world. Why do we even do that? If we harbor that kind of hatred will we ever achieve utopian goals of an equitable world? Or, is it possible that all wars fought can be traced back to some or other financial gains? Perhaps we need to work on tolerance and cooperation between nations and that requires people to stop focusing too much on money and turn our attention to compassion and cooperation. As long as our politicians and economists put selfish interests ahead of common good then I am sorry to say that we can never put the economy on the right track.

All the above healing and repair activities of the body need energy and cellular resources that could have been used elsewhere. They do not come cheap or free. Even surgeries people undertake involve quite extensive healing process and puts the person under enormous energy stress. The energy requirement of a person who has undergone surgical treatment or suffered a major traumatic injury goes up by almost double. The nutritional energy has to be increased almost akin to printing new money (or borrowing). The only thing is that life systems cannot print energy from thin air which is a luxury available for only the Central Banks and states. If a life system does not get this additional energy from the food then the focus is shifted to mobilization of energy and raw materials from other parts of the body. We call this catabolic stress. The biological response is geared towards common good for the whole life system.

I described the process a little while ago how body infrastructure is broken down to liberate the raw materials for the re-building of the damaged areas. Even the energy deposits of the body are mobilized for funding the healing and repair activity at the expense of the normal activities. That is why the injured or infected person feels weak and starts losing weight. This is a dangerous time for the body because unwanted microbes can try and gain unlawful entry causing infections. Infection risk is one of the highest when we have a body injury and that is why doctors give you antibiotics to help. An infectious war in a person, who is already debilitated by injury, can be a losing battle because energy and resources are already in short supply. The immune system is unable to cope with the renewed demands on energy. You can see the signs of modern political states suffering when there is unrest and war. Economically it is too bad.

How do life systems manage this kind of situation compared to our modern economy? The life systems manage this in a cooperative manner and the whole body gears up to help with the tasks. There is no absurdity like some few people holding onto enormous resources while the rest of the country is struggling. All tissues and organs contribute where they can. Nothing is private ownership here. We cannot say the same thing for our modern world. What have we done when the Middle East was ravaged by the wars? What did we do when the people fled the African states and the Arab world seeking a shelter and livelihood? A proportion of migrants were able to find asylum in some European nations. Aid was provided by some nations and UN etc. offering medical supplies and tents to people in badly affected parts. This indicates the global inter-connectedness of the world where there is some attempt to resume normalcy when some stress occurs in whatever form. Life systems maintain normalcy of the internal environment (which is referred to as Homeostasis) when the system is disturbed. Some standard processes are kick-started to bring back the normalcy and this does not require any 'governmental' or sometimes even 'bureaucratic' interference or guidance. It happens as part of a standard, automated, innate process that gets kick-started by local sensors. It is like a cybernetic process.

Though the modern economy is globalized the extent and nature of globalization is dictated by corporate forces and not in the best interests of the poor nations. Globalization means only the ability to access world markets freely for private gains. The ability to sell or buy goods and services for corporate benefit is what seems to matter most when the economy is shaken in any part of the globe. Immediately the stock markets across the globe react as if it was one entity. Then news reporters publish stories like 'billions' and 'trillions' of dollars of wealth are wiped out. Nobody cares that the stock value was always illusionary in the first place and the loss of its value due to the economic disturbance has no real meaning.

What matters is why some countries are perennially poor and why the rich nations have not done anything about it. Take the case of African nations for example. Why should they languish in poverty with no basic amenities and none of the rich nations did anything other than a small token aid. What has been done in the form of limited food and medicine supply is not enough. Even apart from Africa there are so many other countries which suffer from chronic insufficiency. Why don't we as a world channelize the wealth of nature towards the needy? Why should we compartmentalize the world as nations with their own wealth which they do not want to share with any other nation? Two things are worth mentioning here. One is that in several instances the richness of a nation was dependent on natural wealth plundered from other nations who are now poor. Secondly, even in nations who have their own natural wealth the beneficiaries are some select private corporation owners and the ruling elite. The benefit of the natural wealth like oil, coal and minerals is considered as the property of only the companies and the rulers. How can this be accepted? This is one lesson for us to learn from nature. The energy and other resources of a life system is made available to every single cellular citizen. The cells, tissues and organs in need are given priority. The need comes first. In our modern system the greed comes first. That sums up the whole story.

Regulation of energy economy of a life system is decentralized. You may argue - is it not the same with the modern economy too? Don't the banks rule the world of economy and not the government? Don't the private corporations dictate the terms and not the government? Yes, it is true that the system is decentralized in both life systems and the modern world but the striking difference is that the end result is there is no unfair benefit only for a select few in the life systems. No single cell, or group of cells, benefit more than the others. The ultimate determinant is the actual need and not the unfathomable desire to amass more. Do you see the point? So, decentralization by itself is not the important point here but how we have designed the process in a holistic sense.

In the case of life systems the only instance when selfish interests take an upper hand is cancer. Cancer cells are like the greedy capitalists. They siphon away cellular resources towards them by ingenious methods. Genetic alterations in the cancer cells allow them to acquire new properties that help them bypass the regulatory forces and gain control of the entire cellular resources available in the body at the expense of needy ones. The rapid rate of cellular multiplication that typifies cancer is a needless affair in the first place. To meet the growing needs of the expanding cellular population the resources are channeled towards this needless growth instead of making it available for the normal cellular functions in different organs. New blood vessels are laid out to cover the growing cancer mass which is not different from laying new roads to connect new residential developments to main roads so that the supplies can be done. Nutrients are sucked by the ravenous cancer cells disregarding the routine, normal processes in the body that equitably distribute the body wealth. I am sure you can see the tell-tale mark of the rich, greedy capitalists here. Interestingly, I recall a documentary called 'The Corporation' that looked at big business houses as malignant tumors! You cannot fault this argument, can you? I feel we have allowed the development of too many such self-centered private organizations all over the world and it is sad. These organizations have 'metastasized' everywhere. The same corporation reaches out to far corners of the globe spreading its vicious and selfish principles. In this process the local people are affected as their livelihood is at stake. They are not able to make a living using locally available resources because some cancerous corporation has taken over every single money-making opportunity. Growing and selling fruits, vegetables and meat, making clothes, transport, gadgets and everything you can imagine is now done by multinational corporations. This has destroyed small, sustainable, local entrepreneurs and affected local wealth creation. Using raw materials available in your area and using work force of your area some faraway corporation comes and takes away all the profit. We see this time and time again in every corner of the globe.

What we need to learn is how to get rid of such cancerous masses that deplete the world economy. When I say depletion I meant the poverty that builds up as a result of this metastasis of capitalistic forces. If these forces had devised a model wherein the profits are kept at reasonable levels while allowing local producers (who supply raw materials to these invading corporations) and the work force to get a better deal (in terms of better price and wages) then you would not be comparing them to cancer. But the reality is that there is an unjust sharing of the profits which leaves the living standards of the people worse than before. These cancers have to be removed surgically. This is a lesson for us that nature wants to give. The profit-hungry multinationals have to be curtailed by political will (equivalent of medical and surgical treatment of cancer) which unfortunately we do not have. The treatment of cancer is either physical de-bulking which means removal of cancer tissue surgically or use of medicine that will interfere with the proliferation of the cancer cells. If we were to consider multinational corporations as cancers that have metastasized then we need the global treaties that will be accepted by nations on restricting the spread of a corporation beyond the boundaries of the origin state.

Globalization has now become the norm in economy. It indicates the inter-connectedness of all national economies. If one national economy goes down it drags the others in some way or other. If it happens to be one of the big and powerful nations then the effects are felt like a seismic shock in all stock exchanges! Unfortunately, all this interconnectedness is seen as a great thing for mankind. But, in reality, all this interconnectedness is not about sharing and cooperation between countries but one of exploitation through international trade treaties that were designed by the powerful nations to force open the market boundaries of other nations. A wide open and a global market without any trade barriers is deemed a good thing in world economy. My question is why we don't have a similar model when it comes to sharing and cooperation between nations wherein resources are channeled to poor nations from the rich? Either the governments of the rich countries, or the multinational corporations (some of whom are bigger than many national governments), can waive their profits to fund projects in the poor countries to lift them out of poverty. This kind of corporate social responsibility does happen here and there for name sake. People earn billions and donate a few millions and advertise it quite well. The shareholders would not be willing to allow a model wherein the corporations donate half of their earnings to the poor. The global aid programs are not adequate. They are just a pittance when compared to what is possible if there is a will. Global relief agencies like UNICEF etc. will be struggling to get funds while multibillions are spent for defense by many countries. That is for the defense of their countries and not the entire world. There will be hardly any cooperation with regards to global defense which again point to the big difference between the way life systems work and the modern world works. For life systems defense is a global phenomenon applying equally to the defense of every single organ and tissue. For the modern world defense is about defending themselves against fellow nations whom you do not trust!! What a tragedy? You have to spend multibillions to protect your country against other nations but talk of globalization! What double standards? So, globalization is only applicable to trade to allow you to make more profits. More specifically, to allow multinational corporations to make more profit.

When you take other instances where global cooperation is applicable like terrorism and climate change you will notice that governments will be involved and we do not have any perfect solution to this yet. People still quarrel about their role in climate change and what they can do about it. Pollution and climate change are related to industrialization. Many type of factories emit gases which lead to the greenhouse effect and the consequent climate change. The more industrialized nations with lots of factories are usually more accountable. Again affluent countries contribute to more of it because their citizens use more of air travel and cars. When climate change conferences happen the nations try to put a ceiling on the emission of greenhouse gases and warn the countries to take measures to comply with this initiative. What do the countries do? They go and tell their industries to adopt new technology or modify their existing technology so that greenhouse emissions can be curtailed. But the multinational corporations do not like the idea because it would be expensive to make these required changes in the technology and would encroach into the handsome profits for their shareholders. So they object to the whole idea. They have different yardsticks to count the degree of globalization. When they want to access the whole world market for selling their goods or using the manpower then they promote globalization. But, when it comes to other socially beneficial global initiatives like reduction of poverty, climate change etc. the multinational capitalists take a back seat. That is the sad part of our modern economy. Even sharing of natural resources across the globe does not happen and will never happen. Globalization does not apply here sadly. Even within a nation the natural resources are not equitably shared with the public. It is the privately held companies which exploit all the wealth and not even the government. How come we all ended up accepting such non-sense? If I am a citizen of an oil-rich country what right do I have for my share of the proceeds? The answer is none. More depressingly, the natural resources of poor countries are exploited without any reward for them. Is that global cooperation or real globalization? Life systems don't do that. The rewards are equally shared here. The use of resources for common good is inherent in life systems which mean that evolution has devised almost perfect plans for cooperation. We as mankind have not figured that out yet. The greed has taken the lead over the need. That is a fundamental flaw.

What I have said above may sound so impractical. How do we expect this to happen in this world? We have never known a world that has been united. It has always been fragmented as nations and states. The global unions like United Nations and the preceding League of Nations were not intended for that purpose. The UN is more of an ornamental body now which does not have any clout on the politics of nations. The World Bank and the IMF do not promote globalization either. They are simply funding bodies that will work no different than the normal banks. Only thing is that the borrowers are not ordinary people but nations. If the real intention of the creation of the World Bank was to assist poor, developing nations to grow and prosper then the financing model would have been planned without any interest or even the capital would be offered free! Are we saying that there is not enough money to do so if the nations had agreed to form a global entity with the goal of funding development? Couldn't the rich nations and corporations pool the resources that they have in excess?

In short, the world we live in today is not yet ready for such economic experiments. That does not make it right. If ever we have real intention of doing the right things natural models should be studied to learn the way forward.

Modern man, especially in the last couple of hundred years, has become tech-savvy. He wants high-tech for everything. For example, he wants artificial intelligence and Robotics for not only industrial purposes but also for domestic use. Then he spends millions on developing this technology and there is always a capitalist entrepreneur who backs it up and makes a fortune. We have not thought about the downside of this artificial intelligence. I am only using the artificial intelligence as purely an example. What would happen to the live work force if you started automating everything? You do not have to go that far as artificial intelligence and Robotics. Even automation is enough to illustrate the consequence. Automation is so rampant in every walk of our life and that means a lot of human manpower has been made redundant. It may help the owner of a factory to reduce manpower costs. But, what would the common man do when he loses the job to the machine? It is not one man we are talking about. It is not one country we are talking about. This affects the entire world. So, the number of people losing their jobs will be quite high. Even the recent discovery of block chain technology, for example, is said to enable distributed ledgers and reduce the need for a company to maintain back-offices and staff. The article I read about it last week said the savings can be passed on. But the writer of the article did not say to whom? The obvious answer is to the owner of the business and the shareholders. The loser is the working class who become poor due to the loss of his job.

In recent one or two decades the businesses have thought of a 'great' idea to reduce their manufacturing costs. They have learnt to outsource the jobs to poor countries where they can pay a pittance for wages and maximize their profits. They care less about what happens to the jobs of workmen in their own country. The profit made by the rich stays with them.

Loss of jobs has a cascading effect. There is less spending power in the economy because people have lost the jobs. This has a knock-on effect on the overall businesses because the local businesses feel the impact of low turnover. Who cares as long as a few multinational corporations have become rich?

Economic organizations of today have lost their social responsibility. Profit comes first above all considerations. I am talking about manufacturing houses which do not care about the environmental impact of what they do. For example, leather or textile companies may generate toxic effluents which they do not mind discharging into river beds. Agricultural industries may use toxic pesticides which spoil the water sources of the neighborhood for generations. Who cares?

Technology is a double-edged sword. It can do a lot of good but also bring about some harm. Invention of plastic led to so many useful applications around the world but we are struggling to cope with its disposal. Plastic waste is threatening to destroy our environment. Combustion engines transformed the world but its effect on pollution and greenhouse effect is raising a serious concern on our environmental health. Mobile phones are great but they have destroyed direct inter-personal relations. Atomic energy has unlimited scope for generation of electrical power for our societies but their use in making atomic bombs and the problems in dealing with nuclear waste are the downside. You can go on listing forever.

Life systems treat biological technology differently. First of all they do not have any non-biodegradable stuff. Everything they make is degradable and so helps avoid toxic accumulation. Life systems are technologically infinitely more advanced than us. But, the technology is used for collective good and not used for personal gains. There is no individual cell or tissue or organ that has become 'rich and powerful' because they have the technology. This is one major difference that we can never match.

Let us not delude ourselves into thinking that technology is the forte of only the modern humans. Also do not forget that industrial revolution is itself only a couple of hundred years old. What is the 'technology' of life systems I am referring to?

In my book titled 'The Myth of Human Intelligence' I had elaborated a number of examples where nature is abound with examples of high technology that will put us to shame. Principle of optics, acoustics, aerodynamics, nanotechnology, fuel efficiency, energy production, electrolysis, desalination, navigation by sophisticated means, thermal technology, technology Transfer etc., are seen in nature if you know where to look for them. Man uses nuclear fusion energy. He generates them by fusing hydrogen nuclei to form helium capturing the energy released during the process. This technology was made possible only in the latter half of this century thanks to the advances in quantum physics. It is difficult to believe that the Sun is a perfect thermonuclear reactor doing the same for over 5000 million years! In fact, all our planetary life depends on this power.

The plants are photochemical machines. They capture the energy of the sunlight just like our photovoltaic cells and solar energy panels! The amount of energy captured and stored by plants is many times more than annual energy production of man. The best thing about the plant's way of making energy is it is renewable.

Quite often people look down on microbes. They think that they are primitive and infinitely less sophisticated. Nobody realises that being small and single is an evolutionary solution that has been selected and retained. It is easy to show that microbes are 'technologically' very advanced. Sometimes we find that we can't match it at least in certain things. For instance, the nitrogen fixing bacteria take up nitrogen from the soil and make Ammonia (NH3) by combining the nitrogen atom with hydrogen atoms. This reaction is the most important reaction, as important as the photosynthetic reaction, for biosystems because all amino acids on this planet need ammonia for their formation. Without ammonia, there is no amino acid. Without amino acid, there is no protein. Without protein, there is no life form.

The nitrogen-fixing bacteria accomplish ammonia synthesis with incredible ease. It happens at room temperature and normal atmospheric pressure and even in presence of oxygen. We humans artificially make about 80 million tons of ammonia every year around the world. It is made for use as a fertiliser. The chemical process for making ammonia industrially is known as the Haber process. Unlike in bacteria, the Haber process for making ammonia needs a high temperature of 400-500 degrees centigrade and around 250 times the atmospheric pressure and oxygen has to be excluded! How do the single-celled bacteria make it so easily at normal temperature and atmospheric pressure? Is microbial technology superior to our own? If it were available to us someone would have taken a patent on it and made millions. People would have had to pay more for accessing this. But, the nitrogen-fixing bacteria offer this 'technology' to the plants in exchange for some basic life support in a symbiotic relation. This symbiosis is what is missing in our world economy. There is always an attempt to maximize self-centred gains even if it means suppression or oppression of others.

Can man ever hope to build a nanomachine that is smaller than a living cell with so many incredible capabilities? For that matter, we have even molecules, powered by chemical energy, inside our cells doing mechanical functions. Muscle contraction, which is the basis of all your movement, is made possible by the proteins called actin and myosin that slide past each other like tiny motors. Power for their action comes from ATP which, as I said earlier, is the energy quanta we get out our food when it reacts with oxygen we breathe. We are actually combustion engines and we know the impact this technology had in our industrial revolution. Yes, this oxygen combustion in mitochondria actually transformed the possibilities for life forms but it was all for the collective good. No one is more equal than the others amongst the cellular citizens. No cell or cells have become rich at the expense of others.

Man takes pride in his cityscapes and high-rise buildings. No other animal lives such a cosmopolitan life style. Is it true? Wait a minute. Some new evidence in the past few years has shattered this myth.

'Cityscapes' like ours have existed on earth for billions of years, built and populated by plain, humble bacteria, such as _E.coli_ and _Salmonella_ , wrote Andy Coghlan in an issue of New Scientist a few years ago. He calls it slime cities. More properly, they are known as biofilms or mucilages which we see everywhere. They can be seen with naked eye in water pipes, kitchens, as slippery and green coatings.

90% of all bacteria live in biofilms. Studies have shown that biofilms are permeated at all levels by a network of channels through which water, bacterial garbage, nutrients, enzymes, metabolites and oxygen travel to and from **.** It appears that bacteria are not the only inhabitants of the Slime City. Fungi, algae and protozoa add a cosmopolitan look to it. Protozoa have been shown to hunt for bacteria just as large animals hunt down smaller prey!

Bio-films are less like colonies of self-serving automatons and more like cells of tissues of multicellular organisms. There is communication, cell co-operation, cell specialisation and a basic circulatory system as in plants or animals. For example, he says, the biofilms in cow's rumen contain five types of bacteria necessary to digest cellulose in a co-operative manner.

The inhabitants of these slime cities communicate by means of chemicals. Once inside this social network the individual bacteria no longer need to have tough cell walls. Therefore, they are made to shut down synthesis of proteins needed to make cell walls. This makes it difficult to kill them using antibiotics and chlorine-based disinfectants. This is because these agents generally work by targeting the cell walls and what can you do if there is no cell wall? The dwellers of these cityscapes need to contribute to making molecules needed for building the cityscape more firmly. It is a trade-off between individual and collective needs that governs all good cities and societies! That is cooperation for you in economic planning and execution.

I am going to talk about this mechanism of energy production in mitochondria now. The electrons captured from the food molecules flow into a chain of electron conductor molecules. The electron conductors act like a 'biological wire'. Movement of electrons from one point to another will be possible if the compound at the end of the wire is more avid for the electrons thereby exerting a pulling effect. The electron transport chain is organized such that the electron affinity of the components progressively increases. Oxygen is the final acceptor of electron because it has the highest electron affinity. Every physics student knows electron movement from one point to another is nothing but electrical energy. Human civilization uses it for practically every single activity. Little did you know that the same form of energy is being generated inside every life form for its own biological needs. How incredible?

Whether it was a McDonald's burger or a juicy steak, the same electron only provides the energy. A millionaire may be eating the choicest of foods. His ways of capturing energy from them will be the same as a poor man. It is rather disappointing that your body does not recognize the care you have taken in arranging your meal, the hefty bill you paid in the restaurants, or the time you spent in cooking it. Your body will treat it just the same way as a slice of bread. Metabolism is a great equalizer. In my view, it is a better equalizer than death because it shows the equality when you are alive. They say beauty is skin-deep. Food is taste bud deep.

Organisms differ in their food preferences. Many types of bacteria live on simple chemical elements like hydrogen sulfide, iron, and sulfur. They are the chemosynthetic bacteria. It is a bit disheartening that even these bacteria do the same electron transfer with their food. They shuttle the electrons from one atomic element to another in an oxidation-reduction reaction and the energy liberated during this reaction is used.

In fact, all the organisms do the same. Even plants use this electron flow strategy to harness sun's energy using the chlorophyll pigments. That is what happens during photosynthesis. The energy of sun is used to make organic compounds and this is the basis of all food on earth.

Will you please enlighten me as to how organisms such as microbes, plants, animals uniformly employ similar energy capture methods? Why does the human society rely so heavily on electronics for its high-tech life style? Whatever might be the primary mode of energy generation, whether it is hydro-electrical, coal-based, or nuclear, ultimately it is all transformed into electrical energy. Any gadget you can think of needs this electricity.

The striking difference is that many power companies in our world have become rich. They sell electricity to you and make money. Even the governments charge you money for using their electricity! They do not give it to you for free. Of course, even in life systems the electricity generation is not happening from thin air. You need to eat food. Or your body needs to draw on the savings. But, every single cell gets its share of the fuel to make its own electricity. Your body cells are self-sufficient to make their own power if you give them the raw materials. There is no central cellular factory where energy is manufactured that you can sell at a price. By distribution of fuels to all cells equally coupled with the self-sufficient and in-built technology the cells fulfill their energy needs. What a system? This way there are no parts of the body that is lacking in power. Whereas, in a quarter of the world, people do not have electricity to power their homes.

In the early earth, as I said some time ago, there was no oxygen. All primitive life forms that existed at that time were anaerobic. They were unable to produce abundant energy. Consequently, organisms had to remain small and unicellular. There was not enough energy to power the huge organisms. In a way, human race was unsophisticated to start with. Isn't it? The early human settlements were small. They couldn't really take off, in terms of technology, until they found the use of fuels like petrol & gas. Do you agree? Did you know that these fuels need oxygen to combust them just as in the case of food molecules? What an incredible repetition of motifs?

Appearance of oxygen on the planet paved the way for more efficient energy capture and the possibility of large quantities of energy generation. Interestingly, organisms evolved to utilize the newly appeared oxygen. Such an organism was the mitochondrion. The capacity to make more energy out of the foods distinguished the 'mitochondrial organism' from the low-tech organisms, which used inefficient methods of energy capture. It must have been similar to the situation when man made to transition to electrical energy. People had only oil lamps prior to that. Once electricity appeared, people quickly adapted to use it. The organisms probably did a very similar thing. They learnt to use the oxygen technology. In fact, they forged a 'partnership' with the organism that could use oxygen, the way our companies agree to transfer the technology!

Tell me what would your company do if a critical technology is desperately needed and finds that another company has it already? Don't you think there will be some sort of technology transfer? Your company may buy the right to use it. Alternatively, you may buy the company itself and merge it with yours! In the process people become rich. There is always a bank which is willing to bankroll the acquisition using money that exists only in electronic form. They also tempt you with low interest rate!

I said that ATP is like the currency we use. The analogy is fine but what intrigues me is that ATP is not made in quantities more than needed at any given time. When enough energy has been made the catabolic burning of fuel assets in the mitochondria is stopped. There is a cybernetic feedback inhibition of the mitochondrial 'printing' of ATP! Molecular sensors deactivate the process having taken the cue from the cell. I do not want to go into much technical jargon for the comfort of lay readers but in essence this is what happens. When the energy need arises again the process re-starts. I find this quite interesting.

Secondly, the ATP that is needed for an individual cell is made by itself from the nutrient fuel assets that have been dispatched through the blood stream. The cell surfaces have receptors for binding and engulfing nutrient payloads. What needs to be noticed is that different cells have varying needs for energy at different points in time. Some cells may face the need for more fuel during special situations - planned or unplanned. The body has inbuilt mechanisms that will selectively meet the extra needs of the needy cells. It may be a crisis situation where some cells and tissues need more energy and nutrients. It may be a physiological process such as excess muscular activity where the muscles need to be fed more. Or, it could be a growing child who needs more nutrients for bones etc. Or, it could be a pregnant lady who needs more fuel for the fetal growth. In certain dire situations when there is no or not enough fuel coming in the form of food then the body mobilizes fuel assets from the stores. Or, it can start catabolizing the less important structures and molecules of the body for making more important ones. Literally, essential nutrients are snatched from cellular and sub-cellular structures so that they can be given to the needy ones. By any stretch of imagination I cannot see anything like this happening in our modern economy. In fact, the government tries to do the wrong thing to the suffering citizens with more direct and indirect taxes instead of taking it from the economically obese individuals. That is wrong. In fact, the governments allow corporations to siphon enormous wealth just as cancel cells do in life systems. We have no control of this. Please note that cancer kills. It kills the very host that the cancer was exploiting and in the process cancer commits suicide. Our capitalistic system will demise for the same reason.

When I said the cells make their own ATP exactly in quantities that they require for the moment it not only illustrates the complete decentralization of the biological economy. They act communal. Enough resources will be given to all cells as they require (subject to availability of resources by way of feeding or enough stock in body depots) and this process is controlled by the body's bureaucracy.

ATP cannot be made and exported out of the cells. This means the currency of life systems, though universal, cannot be lent or shipped out. A cell can't loan ATP to another cell. A life system cannot loan ATP to another life system. In both cases it requires actual movement of the asset that will be used up by the recipient to make their own ATP.

The way we make our currencies is vastly different from the way life systems do. We not only have a variety of currencies all over the world, with the consequent need for a currency exchange rate mechanism, we also print too much of them. And we allow it to be accumulated in idle bank accounts of the economically obese individuals. While the individuals and even governments are in the red a very small minority is able to hold on to a pile of cash. This is no good.

Nature does not speculate on the value of an asset. The value of an asset is fixed and remains the same for eons. Unlike our modern day economics there are no intermediary profiteers who make easy bucks on something that has not changed in any real sense. On that basis what we need is a ban on speculative trade in stocks and commodities. The value of an asset should not be allowed to vary violently. Just as much as we want to avoid over-pricing of an asset or commodity we also want to avoid a drastic fall in the prices. Even cryptocurrencies, however worthless they are intrinsically, are now traded for imaginary profits. There was a flash crash in the price of all cryptocurrencies in early June 2018 wiping away almost 15 billion dollars (about 5% of total 'worth' of cryptocurrencies). How can something intrinsically worthless lose value or gain value? This is the bane of our modern economy.

Even real estate value shows dramatic change over time. It could be a boom or bust as always. The manipulators of the real estate market will argue that there is less land available and therefore the growing population competes for the limited land mass for building houses or commercial buildings. Outwardly it looks logical that limited number of houses and the limited amount of land increases the price. But, we are forgetting that in most cases rich people use real estate as profit-generating tools and buy them and accumulate them. They are not bought for personal use. This is where the problem arises. Try banning purchase of house or land that is not for personal use. You would suddenly find that the value of the land or house will not inflate at all. Because there are no speculative investments anymore and people only buy what they want for personal use. For example, in many parts of London investors from all over the world have bought properties and many of them are unoccupied. This drives the prices up and legitimate resident of London will find the prices unaffordable and will move to outer parts of London. They will be commuting long distances daily. Even in other countries we see this phenomenon. In Dubai there are investors coming from all over the world to buy properties that they never use. They are not even rented out. The consequence is that the prices of the remaining available properties go up affecting the genuine resident.

What I am saying is that nature does not allow such practices where life systems hoard on resources more than they need. It is impossible. The design adopted by nature is beautiful. Competition for resources is very much present in nature. Diverse life systems compete fiercely for the meager and limited resources. Life systems have evolved strategies to outsmart other life systems in resource acquisition. Some species may outsmart certain others leading to extinction of the unfortunate species. This is permitted in nature. But within a species all members are equal. No member of the species can hoard resources at the expense of others. Even within a single life form individual cellular members have no chance of amassing nutrients over and above what they require. In fact there is a communal distribution of resources directed by non-negotiable mechanisms. No cell can 'sell' or 'buy' resources within an individual life system. No living species can 'sell' or 'buy' some commodity to other species. Instead, biological commodities made by individual cells of a life form will be made available to all other cells without any personal gain. The same way biological assets held by a living species will be shared symbiotically with other life forms for something in return. For example, I mentioned the case of nitrogen-fixing life forms that live in the roots of plants. The nitrogen-fixing life forms get some nutrients back from the plants in a barter-like manner. There is no variation in the level of 'giving' and 'taking' over time. There is no change in the valuation of the asset at all. No life form aims to get 'rich' by exploiting an asset that it has.

Our modern economy should move far away from exploitation. We should learn that all natural assets, whether used as it is or modified by technology, is for sharing only. No individual person or no individual state should be allowed to make personal gains. This is a big ask. How are we even going to do that? Is our modern economy ready for this yet? I do not think so. But, as I said in the very beginning, we are in our infancy when it comes to economics. It is all new for us. We are playing with it like a child without knowing the consequences of what we are doing. The dangers are not yet known to us just as a child does not know the harms of doing certain things. With time all will change. Our society will learn that some absurdities that we have practiced all along will have to stop.
