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I = S - M

The modern way of thinking about economics has been I = M - S Where I is the I as in me, M is what is 'mine' and S is what ...

6/22/14

spending today = output tomorrow = income the day after

Step 1

spending = output

How we use our time and money, how we live our lives and spend today results in what gets produced tomorrow. How we spend our money also determines how we produce that output, whether it is produced in small, local, human scaled enterprises or large sub-human factories half way around the world.

Step 2

output = income

What is produced and how it is produced determine what and how we earn. Production results in an income equal to it both in quantity and quality. The nature of the production, its process, its roots in the community or lack thereof, is reflected in the income that we earn and how we feel about it. The more whole the production is, the more it recognizes our innate wholeness, the more whole our experience of earning is, the more whole income is.

Step 3

income = saving + consumption

What we earn and how we earn it determines what and how we save and consume. The more whole the income is, the more whole is the what we save and consume. The more we enjoy earning our income, the more meaningful the work that results in the income is, the more enjoyable and meaningful our saving and consumption is.

Step 4

saving + consumption = investment + consumption

The nature and quality of saving and consumption, how we save and consume determines the next step, which is how and what we invest and consume in our future. Saving is the act of setting aside. Investment is the act of putting to work. How we save determines how we invest and consume in the future. How we consume now determines how we invest and consume in the future. Can we see how crucial it is to save right and consume right?

Can we see that we can not save right and consume right unless we earn right? We can not earn right unless and until we produce right. We can not produce right unless we spend right! Which brings us full circle to the last step.

Step 5

investment + consumption = spending

What and how we invest and consume determines what and how we spend in the future. The nature of our investment, how we organize our productive resources, how we see people as whole beings capable of great imagination and love, how we interact with the built environment, using tools and technology that enhances rather than diminishes us, that accepts and respects us as whole beings rather than splits us into labor and capitalist, consumers and producers, determines the quality and quantity of our spending in the future.

The full cycle of economics is thus

spending = output = income = saving + consumption = investment + consumption = spending

and may be summarized for handy reference as

spending today = output tomorrow = income the day after.

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