How does the world get richer?

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If a poor country in Africa becomes rich, wouldn’t they need to get money elsewhere? Thus making the other place more poor?

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Anonymous 0 Comments

“Wealth” is, to a degree, fictitious. While there is no commitee actively planning how the world economy will work, but “pure” economics, especially at large scales, is simply something that doesn’t exist: political power influences things. Unless your hypothetical country is able to to control their resources, they’ll get a cash injection but someone elsewhere will be making a bigger bank.

There are indeed systems which (to a degree) regulate how much money “exists”, but debt can be almost magically created as long as all parties trust in the system. Hell, that’s not even something purely in the realm of international economies, it’s how the bulk of the world’s banks operate. As long as there’s an expected cashflow, debt can be treated like real money and grow with much less bounds that other assets.

Currency itself is based on mutual trust. Global hegemony might make it seem like everything is “based” on the US dollar or the euro, but even those are not fixed (and no cryptobros, cryptocurrencies aren’t magically exempt just because of finite amounts), as ultimately their “value” comes from what the various economic systems “expects” them to be able to trade in exchange.

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