Making Money

Very few people actually make any money. Jeff Bezos, Bill Gates, Elon Musk and Richard Branson have almost certainly never made any money at all.

Who actually makes money?

In the UK, the Royal Mint makes money. Actual coins.

A private company, De La Rue, makes money – for the UK and many other countries. Banknotes.

Forgers and counterfeiters make money.

But most money is made by banks, and is purely electronic. Numbers in computers.

A joke? No, deadly serious. Making money is big business, but people like Jeff Bezos, Bill Gates, Elon Musk and Richard Branson aren’t in that business. They’re in the business of moving money from one place to another – mostly out of other people’s bank accounts into their own.

Moving money around isn’t the same thing as making money, not at all. When you’ve got a lot of money and no scruples, bribing governments to write the rules – or ignore the rules – to suit the way you want to play the game is part of the game.

And don’t start trying to tell me that Bill Gates is a “philanthropist.” Philanthropy is a trick for laundering a reputation: you spend a tiny fraction of “your” wealth to polish up your image. You might even think you’re being “good,” but the chances are that other spivs are taking a fraction of “your” money, pocketing most of it, and spending the rest on projects that look good on paper – but probably aren’t, and indeed it may well be a cascade of ever-decreasing spivs all the way down. I’ve seen the bottom layer of spivs for myself in small-town India. In those small towns, they’re among the rich – with just a fraction of the wealth of an average middle-class person in the UK, but jealously guarding their hoard from the ordinary people of their town for whom the benefits were theoretically intended.

Back to those folk who actually make money.

The Royal Mint and De La Rue make money for the Treasury. It’s a service to the community – money is the lubricant for trade – and they’re paid for it, with a tiny fraction of the money they produce. The Royal Mint actually belongs to the State, and its employees are paid salaries. De La Rue make profits, and their shareholders get dividends. De La Rue might actually go bankrupt if it fails to make profits – it recently lost the contract to make UK passports, which was worth £400 million (World’s Largest Printer of Money Running out of Money).

Whether Royal Mint salaries are wisely and fairly set I’ve no idea, but I’ve no argument in principle with the process, nor any evidence that they’re wildly out of kilter.

The people who actually do the work at De La Rue are in a similar position; and while I might have some questions about the bonuses paid to the bosses, and the dividends paid to the shareholders, that’s no different from the situation in other big companies.

Private banks are a different kettle of fish altogether. These days, most money isn’t banknotes or coins: it’s numbers in bank accounts, created out of nothing by private banks, who are laughing all the way to the bank…

Governments could control this, and prevent private bankers writing themselves fat cheques disproportionate to the service those bankers are giving to the community – indeed governments theoretically can control it, like to give the impression that they are controlling it, and to some extent actually control it. But a little bribe here are there...a donation to a political campaign...or a threat to collapse...and who gets a big bail-out, or permission to create a few more numbers...

See also Quantitative Easing and Inflation