Physics is a serious theory of nature, where it is included human beings. Nature is a very complex system that humans in their limited time of living naturally don’t fully grasp. To understand nature, and themselves, humans have to state standards of measure, standards of value. So, John Dalton in 1803 was the first to suggest a means of expressing relative atomic mass. He proposed the use of hydrogen-1. After him, Wilhelm Ostwald suggested that relative atomic mass would be more convenient if expressed in terms of 1/16th the mass of oxygen. In 1961, due to the existence of isotopes, the definition of oxygen was abandoned, and it was instead decided to keep carbon-12 as the basis for the unit. It was decided to introduce a new unit with symbol u to replace amu. Without these decisions, it would be impossible to make chemistry a science, or to understand nature.
In economics, gold was the standard, but it could be mercury as well, or the quality of the air. Hence, the richness of a country, of an individual, would be the quantity of gold he/she possess. But this is annoying since gold is not abundant in our planet. Limiting the amount of wealth to the available gold imposes the continuously increasing value of the commodity, if GDP has to grow continuously, independently if people are happy or not. This is good for those having gold, but annoying for the majority, if you are greedy, since there is nonsense doubling the value of the standard of gold from one year to the other, specially if, by some internal mistake you, the powerful mighty on Earth, had sold great part, if not all, the content of gold kept in your coffers, or if you are a newly rising economic entity. The easy way is to have a special machine that beautifully print paper money, ensuring that you, or the Central Banks, are the legal owners of the paper money. It is desirable to have a great army, to ensure that you are in command, that your standard is imposed. Then, you may give the value you want to your paper-money, and all your neighbors will satisfy your wishes. Money would have the value you, or your Central Bank, or your neighbors, attribute to it.
Naturally, this system works well in principle, but you may want a gradation of richness inside your system, a class division. In that case, you cut-off salaries, but give helicopter money to Banks and other rich people, naturally well aware of the financial system. Class division is the outcome of the value society gives to professional activities, that’s why teachers are now in the lower scale and wall street brokers in the high position.
You may add to this self-contained system a valve to control the speed of money at the different parts of the system. That’s the best operative procedure to maintain your economic engine working well, according to your wishes. You can opt for negative interest rates, but this is not going well, is like throwing sand to a delicate engine. But if economists are clever enough, when the economy is not working well, they may put some oil in the engine, giving money to the people (the consumers), applying the infamous but fast remedy, the helicopter money. Money not to save in banks, but money literally to SPEND…Japan will be the first country in the world to do the helicopter money experiment. They will still need to figure out how to do this and they need it fast. Japan’s public debt is the highest in the world. Read this article by Bloomberg:
I would call the above described principle, “The Fundamental Principle of Economics”…