CREDIT IS PRESENT WEALTH |
SSET 11 - CREDIT IS PRESENT WEALTH
Credit definition Credit is defined as the exchange of present wealth for future wealth. That is a definition that contains the necessary component to define it as present wealth. To identify it as such, we only have to show that it is useful and scarce, [1] that is to say, that it has value, them when exchanged for another value it generates the prices.
We have shown, very synthetically, that credit is present wealth, since it lends present utility to the parties that exchange it ― in addition to being wealth by exchange itself.
It is the price that is assigned in the present to the commitment to deliver wealth present in the future [3] ― current value of future wealth.
It is the future price assigned to credit-debt. Then, de credit-debt is that unique manifestation of wealth that involves present and future wealth that implies time. [4]
The only thing that mediates between present wealth and future wealth is what distances the present from the future: TIME. Then, the utility that the passage of the time provides is represented by its value-utility that generates its price. Then, the difference between value-price of present wealth and value-price of future wealth is the value-price of time, known as interest. We have exposed, in a very simple way, our Theory of Interest, [5] present in the Subjective and Solidarity Economic Theory (TESS). Let us see then, in future works, the importance of the currency being credit. Carlos A. Bondone
[1]
They are two simple characteristic with which Menger defines
economic goods.
|