Make money, not war! This may sound like a cheap twist of the famous flower-power slogan of the sixties: ‘Make love, not war’, but it is much more profound than that. Gold used to be used for making money (coins etc.). So the alchemical secret of making gold was really about making money. He who can make money, can also make war. After all, it takes money to make war. So we mean it literally: ‘Make money, not war!’. If you know the secret, make sure you don’t use it to make war.
Now, making money in daily usage means earning money, or making a profit. This, too, is preferable to making war. But we do not refer to this colloquialism. This article is about creating (new) money, i.e. creating it out of nothing. Can it be done, and, if so, how? The Greek philosopher Parmenides held that
‘nothing cannot give rise to something’, but he was wrong. People create many things out of nothing. They do it daily. For instance, if you were out in the forest and gathered branches to build a hut, you create the hut out of nothing. For, first there was nothing; then there was a hut. Let’s not quibble now about the fact that the raw materials were there and that Parmenides meant that you cannot create something out of nothing, i.e. without raw materials. He was wrong anyway, as this article will show.
To create, or not to create. Is that the question?
Now, suppose you build a solid inhabitable log-cabin, using only materials gathered in the forest, such as logs, stones, clay etc. Once it is finished (once it has been created), it will have value. If there is a money system in place, this value can be expressed in the local currency. When you sell it, you will have created money out of nothing.
If you’re not yet convinced, then consider this. The process referred to above can also be reversed, i.e. somebody pays the purchase price first and then you create the log-cabin. At this point it is undeniable that the builder has created money out of nothing. For there is no cabin, but already there is money.
It may seem that all this is no more than a play of words. Not so. Money can literally be created out of nothing. Suppose the money to build the cabin was paid by way of credit, i.e. a bank extended a loan by crediting the builder’s bank-account. And suppose the bank was not using its own money, nor money
somebody else (a client) had deposited at the bank. In that case something really spooky took place. For the bank would have extended credit (a loan) which the bank itself does not have, nor holds for somebody else. This is really creating money out of nothing! As a matter of fact, banks in capitalist countries do this all the time. About 90% or more of all credit extended by banks is thus created.
To fuel the economy, the Cuban Central Bank could do this too. A few rules have to be adhered to, otherwise things can go badly wrong. But, in principle, it can be done. This way Cuba would have ample funds to become prosperous. And free. Consider it the logical extension of the Revolution. Solidarism is the third way out of poverty.