How does a socialist make money?

Paper money: our monetary system is socialism for the rich

When I hear the term “social justice” I involuntarily reach for my wallet to make sure it's still there. Because the politicians who use this term have only one thing in mind: to redistribute money with government funds.

In one point, however, the social justice knights are right, despite the vagueness of the buzzword “social justice”. Social inequality in Germany has increased steadily in recent years. While the richest 10 percent of Germans already had a huge 45 percent of private wealth in 1998, in 2008 they were able to call a little more, namely 53 percent, according to the Federal Statistical Office.

Probably the most important reason for this development, however, nobody sees or wants to see: our state paper money system, which is treated as a taboo in the social justice debate.

Paper money system promotes materialism and selfishness

In general, our state paper money system is hardly questioned. It has enormous and worrying effects on society. The paper money system allows an enormous expansion of state activity and promotes materialism and egoism. However, the consequences of our monetary system for the distribution of wealth are particularly explosive.

There are a few privileged players in our system who can make money out of nothing: central banks and commercial banks. The rest of the mere mortals look into the tube.

Every production of new money has a redistributive effect. Because we do not all receive the new money to the same extent. Some get more, some get less. Some get the new money sooner, others later. Whoever gets the new money first can still benefit from the old, even lower prices.

As soon as the first recipient uses the newly created money, it goes to the second recipient. This also benefits from the increase in the amount of money, but somewhat less than the first recipient, as prices tend to slowly start to rise. The new money is gradually being distributed across the economy, driving up prices.

And just as first-time or early-bird recipients win, so do others who watch as prices rise before their incomes increase. They are slowly but surely being robbed of their purchasing power.

Those who are already rich get more and more money

But who are the first recipients of newly created money in our monetary system? If you want to enjoy new money, you have to pick it up where it is created, namely from the banks in the form of a loan. It doesn't hurt to be rich already. Because wealthy people can offer their real estate or blocks of shares as collateral for new loans and use the money to buy even more real estate and shares, which then become even more expensive.