2. Confusing a Medium of Exchange with an Asset

Some of us become rich and choose not to spend but to save our wealth—to buy a house, scale a business, spend on leisure, etc. Carrying and securing wealth becomes an issue, so people want to store their wealth in safe places. We bury treasures, build fortresses, give it to goldsmiths, buy houses, and so on. Some of us, becoming wealthier, began to offer money as a loan, but with interest as an offset for the risk they claim to take. The more money they lent to different people, the less risk they had, as most people paid their debts with interest. Earning money from money, without tangible economic production, has become a choice for the wealthy. “If you are living in a no-growth economy and somebody can give you 12, 13 percent with almost no prospect of loss, that’s about the best thing you can do.” — Steve Schwarzman, Blackstone Founder On the other hand, people borrowing money embrace the full risk, and if they are successful, they pay back the debt and interest. In a sense, growing to pay interest has become a trend. Borrowers must do more work to pay the interest, which can be confused with growth.