I think the people I get along with best, are those who share my delusions

The Velocity of Money. A Parable of Economics

The little frontier town was struggling.  People didn't visit much anymore.  Everyone was miserable because they were all in debt.

Late one evening a man walked into the hotel.  He wanted a room for the night.  The hotel owner, Conrad, was happy to see a customer.  It had been a while.  Conrad collected the $20 for the room from the stranger.  The stranger told Conrad that he had tools and sundry items for sale.  He wanted to know who might buy them.

Conrad told the stranger that the town was full of poor people.  Everyone was in debt and no one could afford to buy anything new.  The stranger would have better luck in the next town.  Disappointed, the stranger went off to bed.

Conrad was happy to be holding $20, but he knew he shouldn't use the money to buy anything from the stranger because he owed Morgan money for the whiskey that Morgan had been supplying to the hotel.  So, before he changed his mind, Conrad walked to Morgan's and gave him the $20.

Grinning widely, Morgan thanked Conrad and said he feared he might never get paid back.  The money was much appreciated.  Now Morgan could pay Mr. Pella the money he owed for the glass bottles he bought to hold the rum.  Morgan took the money over to Mr. Pella that very night and paid him.

Mr. Pella was very happy to get repaid because that allowed him to pay the Thomas brothers the money he owed to them.  Shane Thomas had sold Mr. Pella the sand needed to make the glass bottles, and Roger Thomas had sold Mr. Pella the wood needed for the fires to heat and form the glass.  He owed each of them ten dollars.

The next morning Mr. Pella found the Thomas brothers and paid each of them.

Shane straight away took his ten dollars to the innkeeper, Conrad, to repay him the money he owed the Conrad for the nights the Conrad let him stay at the hotel while Shane's house was getting repaired.

Roger was elated that he had finally gotten paid for the work he'd done.  He saw the stranger as the stranger was headed out of town and stopped him.  The stranger explained that he was a salesman.  He sold Roger a brand new ax, perfect for chopping down trees, for $10.  Roger was delighted with the new axe since his old ax could no longer hold its edge.  Roger would be able to get back to doing work with this new axe.

As the stranger rode out of town he thought to himself, "That innkeeper lied to me.  It seems like people in this town do have money.  I just sold an axe for $10 that I only paid $5 for, so this is turning out to be a good trip for me."

That very afternoon Roger used his new axe to cut down some old hedge trees that had long been a blight upon the town.  The townsfolk gathered in the evening around a bonfire of that hedge wood and sang songs and laughed and felt happier than they had in a long time.  No one was in debt.  Each felt unburdened and optimistic for the future.

Analysis:

What is it that makes an economy grow?  Does it make a difference, to the economy, if a person stores thousands of dollars in a coffee jar at home, spends the money on products and services, or puts it in a bank account?  What is the impact on the economy of each of those three actions?

This parable provides an example where the velocity of money is high, at least for one day.  A high velocity generally indicates a healthy society.  If something impedes the velocity, it can harm the economy. 

In our history, the use of money in the form of coins and bills increased the velocity of money over attempts to directly trade commodities such as grains and chickens for goods and services.  The move to digital currency and credit cards provided another boost to the velocity of money.  We can now send money anywhere in the world instantly.

To learn more about the velocity of money, I suggest starting here: https://www.investopedia.com/terms/v/velocity.asp

Evolution is not survival of the fittest. The Coronavirus impact on our economy offers an analogy.

Some people assume that evolution and "survival of the fittest" mean the same thing.  And sadly, some people use the phrase "survival of the fittest" to rationalize and justify the dominance of the one group of individuals over another.

One impact of society's reaction to coronavirus is that we reduced our contact with other people and visited stores like Walmart less often.  Many people turned to Amazon to buy products instead.  This could lead us to logically claim that Amazon performed better than Walmart because, according to "Survival of the fittest", Amazon was "more fit".  But there is a flaw in this claim that many people overlook.  The flaw in assuming that Amazon is "more fit" than Walmart is the implication that Amazon is more fit "in every way" than Walmart.  The flaw is to believe there is something about "fitness" inherent in the organization (or organism) that lends justification to saying one is "more fit" than another and thus their survival is more valuable or more important to the species than another.  "Fitness" is not a property inherent in specific individuals or organisms.  Instead, it is a relationship between that individual and the events of the environment they live in.

To clarify the distinction, let us imagine that coronavirus had not impacted our society, but instead, society experienced a different calamity.  What if the majority of our country lost electricity for several months?  If such a thing occurred, you could assume that Walmart would probably do better during that time than Amazon.  Following the same reasoning we used to decide that Amazon is "more fit" than Walmart during coronavirus, we would now reason that Walmart is "more fit" than Amazon during the electrical outage.  Therefore we can deduce that the quality of being "more fit" is not something intrinsic to the organization or organism.  It is a measure of the interaction of the qualities of the organization or organism and how it interacts with changes in its ecosystem.

So what is the point of this article?  The point is that we can't claim, after the fact, that one group survives and thrives because they deserve to survive and thrive because they were "more fit"; with "more fit" implying superiority over the other group.  We can only say that one group survives and thrives because they had qualities that allowed them to better respond and adapt to a specific change in the ecosystem.  Had a different change occurred in the ecosystem the other group may have survived and thrived.

Groups that seek to justify their ideas of genocide toward other groups often invoke "survival of the fittest", but I hope you can see that such reasoning is flawed.  In fact, I think you should conclude that if the survival of humanity is important, then diversity of humanity is important to increase the chances that some of humanity may survive.

And why, you may ask, is evolution not "survival of the fittest"?  The reason is that we can't apply the unqualified idea of "most fit" to an organism in order to declare that organism is most likely to be around 100 or 1000 years from now.  We can't identify "most fit" until after the events have occurred that lead us to the current organisms we have today.  We can only say that one organism or another is more likely to survive specify changes such as droughts, or diseases, or new predators or a combination of several factors.

Evolution is the result of the interaction of organisms responding to changes.  It has no forethought, no planning, no goals, and is not even predisposed to prefer life.  It does not look ahead.  Evolution is just a label we uses to describe what has come before and how it came to be.