Money and Wellness

MONEY
and
WELLNESS
JUAN MANUEL OCHOA TORRES
SOCIEDAD MEXICANA DE GEOGRAFÍA Y ESTADÍSTICA, A.C.

Original title in Spanish: Dinero y Bienestar
FIRST EDITION: MAY 2018
ISBN: 978-607-7944-16-4
Registration No.: 03-2018-021310251300-01
Copyright © Juan Manuel Ochoa Torres
Correspondence with the author:

Juan Manuel Ochoa Torres: mailjmot@gmail.com
www.juanmanuelochoat.blogspot.mx/
SOCIEDAD MEXICANA DE GEOGRAFÍA Y ESTADÍSTICA, A.C.

Justo Sierra 19 Centro Histórico
Telephone (52) (55) 5542 73 41 and 5522 2055
ismge@prodigy.net.mx
http://smge-mexico.blogspot.com
C.P. 06020, Mexico City

MEXICO
Translation to English:
M. E. Mauri
Reviewed by:
Ana Sofía Ochoa Ricoux
Typography and layout:

Luis Tovar Carrillo
tecnografica64@gmail.com
Cover page: Ana Sofía Ochoa Ricoux
The total or partial reproduction of this book is prohibited

without the author’s permission.
Table of contents
Introduction ......................................................... 7
Part one. ............................................................... 11

The past
Chapter 1............................................................... 13
The creation and role of money
Remote past
Chapter 2............................................................... 25
Money
Evolution and recent past
Real basics
Chapter 3............................................................... 35
More understandable inflation
Spain 16th Century
1921-1923 German inflation................................ 41
Chapter 4............................................................... 53
Almost unforgivable inflations
20th Century inflations
Ideological motivations........................................ 63
Part two................................................................ 81
The present
Chapter 5............................................................... 83
Monetary balance – steady prices
Congruency
Chapter 6............................................................... 89
Growth with stability
Actual development
Juan Manuel Ochoa Torres
Chapter 7............................................................... 97
Naughty interference
and their negative effects
Part three............................................................... 131

The future
Chapter 8............................................................... 133

An integrating element under fair ratios
Idle reflection
Background. ....................................................... 133
Recent history...................................................... 136
Wrong medications............................................... 139
Epilogue. ............................................................... 153
Appendix................................................................ 159
4
Money and wellness
This book is dedicated to all partners (today and

forever) of the Benemérita Sociedad Mexicana de
Geografía y Estadística (Meritorious Mexican So-
ciety of Geography and Statistics) that have made
valuable contributions to the development of our
community.
To my beautiful family, my wife Lucía, my son Juan

Pedro (his wife Carol), my daughter Ana Sofía,
and my grandchildren Ben and Emma, as well as
all those to come, hoping they may have greater
development opportunities.
5
6
Money and wellness
Introduction
I wonder if you have ever asked yourself a question simi-

lar to the one in the mind of this book’s author when he
was little:
What gives value to these squared little papers, commonly

known as "money"? I thought. Why is it that, as groceries
were usually marketed in the convenience store at the
street corner ever since my remote childhood, these are
accepted without hesitation in addition to receiving in
exchange other merchandise?
One day, on my way to the aforementioned nearby store

run by a very kind little lady who everyone knew as
"Doña Pachita", I kept on wondering: when and how
was a kind of agreement established through which we
can exchange copper coins or these so well printed paper
rectangles for items?
Why does Doña Pachita never refuse to receive them,

and instead, she willingly exchanges them for different
foodstuff once we give her this so-called "money" since
these coins or printed papers cannot even be eaten?1
Well, guess what, these and other similar ideas rather

than being forgotten grew over the years fluttering often
through my mind with increasingly complex questions.
I finally was lucky enough to attend University, and to
have a very capable teacher of Economics —an English-
1
If you were to think that at some point I considered the possibility of eating
them, I can assure you that they never seemed palatable to me, and I am sure
you all, kind readers, have the same idea.
7
man by the way— who putting up with me and my great

interest and concern in the matter, kindly accepted to
have a word with me off class schedule.
“Professor…”, I told him once intrigued, “…you told us

today in class that the amount of money issued by a
government through its central bank must be supported
and limited by the foreign currency reserves and gold
of the applicable institution in each country, is that so?”
“That’s right,” he answered.
“Well, I think that's wrong," I said, while I felt his clear

disbelief to the fact that someone challenged such a
dogma at the time, “a country can’t be prevented from
growing and developing depending on whether it has
enough reserves and gold in its vaults.”
“What you’re saying,” he adds in disbelief, “is a heresy

in economic matters. In normal conditions, I would flunk
you. What would give then value to a currency?”
“A currency value must be based on the amount of goods

and services each country is capable of producing, for a
housewife or any citizen will not use their money mainly
at the supermarket2 to acquire gold or foreign currency,
but to buy the goods and services required.”
“Therefore, and excuse me professor, every country’s cur-

rency has to be related rather to the productive capacity
each community has,” I carried on.
“But if it were as you say, and since many circumstances

can modify a country’s productive conditions, their cur-
2
Commercialization forms began to be modified to the detriment of the corner
shops and small convenience stores of the previous years.
8
Money and wellness
rency should also vary, that is, it would have to ‘float’,

which would be foolish,” my patient professor insisted.
“Well, it can float. In any case that would be a better al-

ternative than limiting its growth, and preventing people
from having employment among many other things.”
“So, imagine...,” he objected immediately. “How would

international trade take place in such a scenario with
floating or changing currencies?”
“In any case,” I said, “annual variation percentages would

not be significant enough to impact international trade,
and not only that, if a country acts responsibly and a
necessary balance between ‘money supply’ and ‘goods
and services’ is safeguarded, there might be no inflation,
don’t you think?”
Needless to say, dear reader, that although we had a very

interesting dialogue several times, we were not able to
convince each other. The one thing we never imagined,
however, is that just five years later, although I had al-
ready graduated from the University and had lost contact
with my dear and patient teacher, the following occurred:
In the early 70s, then President Richard Nixon announced

that the US dollar’s value would no longer be tied to the
price of gold, and devalued its currency. I am convinced
that my consequent teacher, wherever he may have
been, remembered our talks, and since he was several
decades older than me, he probably did not get to live in
the current world, where all currencies are subject to the
"floating" scheme, which, by the way, does not impact
the growing international trade.
Even though factors impacted this evolution in monetary

matters, you will discover them in a surprisingly clear
9
way as you read this book. My intention with the brief

narrative above is to describe, on the one hand, the chang-
ing economic and monetarist criterion, and to assure you
that, if at some point you considered that this subject was
too sophisticated and only available to specialists, let me
tell you that this is not the case.
This important science that concerns us all complies

with basic principles and the most elementary common
sense, which can and should be perfectly understandable
to all audiences. As I said, I will try to prove throughout
the book using a deliberately simple and clear language,
including examples whenever possible.
The first part describes how this important resource was

created thousands of years ago through certain principles
or laws that invisibly moved the economic resource:
money. You will find in the second part the way it is
used currently. The last part includes one of the ways
we could take advantage of it in a more complete and
comprehensive way for the benefit not only of the entire
global community but also of each one of us.
Therefore, whether you are or not involved, I assure you

that you will have a much broader vision on the subject,
and you will be surprised at the real possibilities with
which this resource can influence our lives.
Join me along the following pages and chapters and dis-

cover the potential this so-called "money" resource has,
which in fact you keep (little or much) in your pocket now.
10
Money and wellness
Part one
The past
11
12
Money and wellness
Chapter 1
The creation and
role of money
Remote past
What if someone from this century could go back to the
Paleolithic era through an unknown device,3 and upon
seeing with surprise that scruffy gentleman coming with
his spear in one hand and carrying with difficulty the prey
he has just hunted in the other, and our contemporary
offered him money for his prey. Our predecessor would
most likely throw his coins or bills to his head, if nothing
worse happens.
His reaction would have been understandable because

everything seems to indicate —even in the most "ad-
vanced" periods of the Paleolithic era— that money as
such did not yet exist.
However, in the following (Neolithic) era a series of

transformations occurred, which developed over many
centuries and progressed in several regions and conti-
nents. However, how did such changes come about and
what consequences did they have?
In those remote years, some of our ancestors realized,

probably by simple observation, that if one of the little
seeds they had collected fell accidentally to the ground
3
Paleolithic (from the Greek παλαιός, palaiós: “ancient”, and λίθος, lithos:
“stone”) meaning "Ancient Stone", (also known as "stone age") is undoubtedly
the longest period of human existence from around 2.8 million years to 12
000 years b.C. A period of transition concurred with an ice age followed by
the Neolithic, a term that comes from the Greek (νέος, néos: “new”, and λίθος,
lithos: “stone”), or "New Stone Age", which is another period of the "Stone
Age" considered as divided. The Neolithic era is estimated to have lasted till
2 500 years b.C.
13
and it rained... Surprise! A plant similar in nature to the

one it came from germinated. Surely they thought that
the best of all was that this new plant, in turn, would
produce more similar seeds.
That fact would have surely made them think that if sev-
eral of them were grown simultaneously, they wouldn’t
have to be looking for them everywhere, but would have
them right at hand.
Others would have noticed as well the benefit of the

domestication and fecundity of certain animal species
—as in fact happened with cows, oxen, sheep and goats,
among others— because they could make use of them
or their products, such as their skin, work force, meat,
milk and other things.
Some built very primitive homes, and those watching

realized that, indeed, it was much better to take refuge in
them than to cover themselves under thickets or live in
caves especially at the time that, when taking advantage
of these new activities, they no longer had to travel as
nomads from one place to another but to settle in pre-
determined places near rivers among other advantages.
Since they no longer had to walk such enormous distances

looking for food, they had more time. Thus, some real-
ized the advantages of making very rustic clothing by
spinning to protect and dress themselves, which others
soon copied.
Some more gradually learned the process of pottery and

even saw the convenience of developing better tools.
However, all those significant advances for them, centu-
ries later would not only determine the development of
agriculture, fishing, livestock, housing, textiles, pottery
and others. But, guess what? These brought along a series
14
Money and wellness
of secondary changes that none of our heroic ancestors

could, even remotely, have ever imagined.
Each one of the different members of these communities

should necessarily start having "surplus" and "missing"
items of different merchandise. Someone had more —or
was missing— cereals, milk, textiles, tools, seeds, pottery,
straw, wood, meat, bricks and a very wide variety of item.
Thus, in a completely natural and spontaneous way, there

was a need to exchange some goods for others.
More than one could have thought, “Oh gosh! Wouldn’t

it be better to not depend on each other, to be "self-
sufficient" in terms of production and consumption?
An idea of this nature is absolutely outrageous. Imagine

for a moment that you, kind reader, would suddenly
decide nowadays to follow that same self-sufficiency
principle, and totally convinced of such an idea, you tried
to prepare or produce your own shoes, watches, clothes,
glasses, food, cars, telephones and all that wide range
of items that we require. How long would it take you to
produce each item, if you were to succed?4
Well, let me assure you that our hard-working ancestors

had a similar reasoning —although on a much smaller
scale—, and they would have noticed —intuitively and
4
I don’t pretend to discourage you my dear reader, but if you were to make
something as simple as your own pair of shoes, I don’t know how long it could
take you that laudable purpose. What I do believe is that you would use over
40 times the real time of an expert in the field, and the results would be rather
dubious. I can almost assure you that neither the author of this book nor most
of us would be especially interested in acquiring your brand new pair of shoes.
Furthermore, since your so commendable effort and time would have prevented
you —among other things— from reading this book, I dare to invite you to get
rid of that idea, and continue with those profane "mercantile" procedures —as
some say— and continue to exchange goods.
15
naturally— that human beings seem to have a kind of

disposition or ability for certain activities, while others
are very difficult for us to perform.
So, with this undeniable fact, we could also ask ourselves if

a kind of decree was enacted by the authority —if existed—
that would regulate the "labor division", or if a primitive
edict was issued indicating that each community member
would devote him/herself to certain specialty. No, it wasn’t
so. It just occurred naturally, and without even realizing it
we all specialized —so to speak— in certain tasks.
What we did not realize is that humans act and proceed

under certain invisible guidelines, which I will be raising
throughout this book.
I’ll just refer to one of them for now, which is a kind of

efficiency in terms of the use of resources available to us
that induces us to intuitively and unconsciously —given
that every resource we have is limited or "finite", includ-
ing time— try to give each thing the best possible use.
Wow! And how does that happen?
I think I can explain it better with an example. Let's sup-

pose that you are an artisan shoemaker, and right now you
are about to make your next pair. You have before you and
on the worktable three squared meters of leather. I bet
you that you will try to make efficient the raw material
and use the smallest surface possible (perhaps about six
or seven squared decimeters, that is, about two per cent
of the total) for each pair, rather than using, say, eight per
cent, which would undoubtedly happen if you did not
make cuts on your canvas in an "efficient" and optimal
way, don’t you think?
Well, that same guideline shall apply to all the resources

we manage in such a subtle way that the vast majority
16
Money and wellness
—then and now— will not even realize how this invisible
incentive operates on everyone. Therefore, just as that
artisan shoemaker was automatically induced to behave
in that way, you, I and anyone would have proceeded in
a similar way regardless of whether we would have had
right there in front of us a three squared meter leather
canvas, or even more.
As I said, a similar principle of "exploitation" or efficiency

of available resources, including time itself, should have
invisibly driven our ancestors in the following direction:
The accomplishment of those activities for which each

one of them would have been more skillful in order to
later exchange only some goods for others. As easy as that.
A fisherman named Simon5 behaved according to that

same principle. He had not received an official mandate
or an operation manual, but intuitively perceived that if
he were good at this activity, and less skillful or perhaps
even disastrous in others, he would simply devote himself
to that job so he could exchange the "leftover" items for
the "missing ones".
What did he do to carry out such an exchange? Did he

put a fish in a pole on his boat? Or rather... He brought
his basket of fish to a kind of primitive market —that is, a
site that should have started to proliferate also naturally
derived from the influence of the same invisible direc-
tive— to exchange them for something else?
5
Please do not assume that the author is that old to have had the pleasure of
meeting that sure-footed fisherman of the Neolithic period. I just named him
"Simon" arbitrarily as an example. I can send you a copy of my birth certificate
if you want so you can verify that I was born in the 20th century (after Christ)
and not in that remote period.
17
As expected, the second approach occurred. Imagine for

a moment that someone had not followed an efficient or
logical procedure, and since he had to exchange 3 liters
of "leftover" milk for something else, he would have
wandered for many kilometers carrying his merchandise
hoping to run into another person who in turn brought
just what he wanted. This would have been not only
inefficient but also irrational, don’t you think?
Therefore, with the help of history books —one of the

best means to look at the past—6 we can see how people
talked about the existence of markets and something
similar to money as a typo of exchange means or com-
mon ground of goods, in order to make easier, efficient
or optimize their exchange.
If we go back, however, to the early Neolithic period

where money did not exist as such perhaps there was no
other option than direct and simple bartering.
But, guess what? Bartering was not a very efficient pro-

cess because several conditions had to happen for the
benefit of all participants since there should have been a
kind of "match" between the needs or wishes of each one.
Those who had fish "left" wanted bread, but those who
had bread did not want fish but tools, and whoever had
tools preferred milk and maybe a little wool or clothes.7
6
Let’s remember that writing —as a more coherent and descriptive means— was
created around 4 800 years ago (before that period there were isolated events
of proto-writing). In The nine books of History, Herodotus (historian and Greek
geographer who lived between 484 and 425 BC, considered as "the Father of
History" in the Western world and to whom we owe the merit of having de-
veloped one of the first reasoned and structured accounts of human actions)
describes in the 5th century BC the existence of "markets" and money. In much
more recent years —already in the newly American continent discovered by
the Europeans— Bernal Díaz del Castillo (1496-1584, 16th century AD) tells us
about the existence of very sophisticated markets, such as Tlatelolco.
7
Among the things that made “bartering” terribly inefficient and expensive was
that, as I said above, a double match was required: it was imperative that...
18
Money and wellness
After too much time —a waste or inefficiency of this

valuable but intangible resource— there could have been
an agreement for an eventual exchange between fish and
wood, but another conflict arose: How many fish should
Simon deliver for the board he required to repair his boat?
Surely after many failed experiences, a kind of "common

denominators" or, in other words, a kind of "merchandise-
money" would have emerged almost spontaneously. Its
main characteristic was that most individuals required
them, as maybe it was the case of cereals, livestock or
tools. Another characteristic was that they would last
longer, as opposed to what happened to our friend Simon
with his fish, since, although almost everyone liked fish,
they only lasted one day. One more characteristic of the
"merchandise-money" was that it was easily transported
or could be stored.
What was that? Why the hell should they also be "stored"?
If we carefully observe Simon’s particular needs, we find
that although there were days where he obtained abun-
dant fishing, he was aware that he should take precautions
because there would also be days when he would not
catch almost anything. Something similar happened to
Miguel who after picking his small wheat crop rather than
exchanging his cereal for all the amount of goods, which
he knew would last very little, he had to be proactive
and keep as much surplus as he could for his next crop.
...each individual wanted the item of the other and in the desired quantities,
and both had to agree in all basic conditions of any commercial operation.
In other words, it depended on a match between the supplier and the demander
in terms of wishes, products, quality, need and availability. Should there was
no match between each and every one of them —as it should have happened
most of the time— inefficiency was generated, a fact that undoubtedly harmed
the social group then.
19
Thus, once the invisible inflow of efficiency improved

they eventually realized that precious metals had all these
abovementioned characteristics, which could become
one of the best "common denominators" or medium of
exchange accepted by everybody.8
It was no coincidence that the "monetization" process

(already as "money" or medium of exchange itself) had
arisen precisely in the metal age, and more specifically
in the Bronze Age.9
There is no exact date in all regions and continents where

we can say that coins were used as a common denomi-
nator or as a medium of exchanging goods. However, if
we go to one of the most reliable testimonies of the 5th
century BC, with no other than Herodotus, we will see
that this outstanding character states that the first coins10
generally accepted as "money" were coined in Lydia in
the 6th or 7th century BC.
8
The same subtle action of efficiency was undoubtedly over time the main fact
that made them round rather than squared for their easy handling and transport.
9
The age of metals were from 4,000 BC to 500 BC, first classified as Copper
Age, then Bronze and later Iron Age, which occurred in different periods de-
pending on the degree of progress of each specific region.
The use of copper occurs during the first stage, since it was easier to obtain
the metal given its presence on the surface of the earth, and could melt at
slightly lower temperatures; then appeared the bronze, which although it was
harder and more resistant than copper, the addition of tin (10%) was required.
Finally, iron was better, although it required furnaces able to raise higher melt-
ing temperatures. The dominance of metals decisively had an impact in the
already significant advances that had been achieved in agriculture, livestock,
blacksmithing, housing, and textiles, however better and more efficient weapons
were unfortunately produced.
10
The term "currency" comes from the fact that the building where coins were
minted in ancient Rome was next to the temple of Juno Moneta, which was
built on the northern summit of the capitol hill (one of the seven hills of the
Roman Empire’s capital city) and it was assumed that said property, being
next to the temple, was under the protection of the aforementioned goddess.
(British Museum).
20
Money and wellness
This mintage apparently contained a lion as a heraldic

symbol representing the Mermnada dynasty to which
the kings belonged. The piece was coined in electrum
(natural alloy of gold and silver), with a weight of 4.75
grams and a value of one third of the stater (local coin).
Darius of Persia ordered the coin mintage after the con-

quest of Lydia, and later on in Greece.
Have these been the first experiences with coins as

"money" itself? I doubt it. It is difficult or almost impos-
sible to establish it with certainty.
If we refer to another much older text, for example the

Code of Hammurabi,11 we will find evidence that money
is already cited as such in many places. A portion of said
code is shown below for this purpose:
“35 If a man buys from an officer the cattle of sheep which

the king has given to that officer, he shall forfeit his money.
36 In no case shall one sell the field or garden or house of

an officer, constable or tax-gatherer”
No name, weight or value of "money" is referred to,

however, in this code. The most relevant note is that the
concept is already described, that is, money as a medium
of exchange or a common denominator of values. Don’t
you think?
11
The Code is a stele where King Hammurabi’s code of 282 laws was recorded.
The king supposedly received them from god Shamash. The stele was found
in Susa in 1200 a. C. and taken as spoils of war by the king of Elam Shutruk-
Nakhunte. It is preserved in the Louvre Museum in Paris.
The Code of Hammurabi is one of the oldest sets of laws that have been found
and one of the best-preserved copies of this type of documents created in
ancient Mesopotamia.
21
For the purposes of this analysis, it doesn’t really matter

whether Hebrews called this common denominator of
values “siclos”, or the Greeks called it drachmas, obolos
or stater, qians in China, gins for the Sumerians12 or any
other name. The relevance is that the concept we know
as "money" was already operating since those remote
years. Furthermore, its creation was a kind of product,
result or consequence of the need to exchange goods be-
tween members and communities in the most efficient
way possible.
However, it would be extremely important to make the

following reflection:
Has money totally fulfilled its primary role from the early
centuries of our era to date? Did it influence the prices of
goods and services for good or sometimes for bad? This
reading shows evidence of experiences humans have had,
which you will identify immediately.
Since we are dealing with monetary issues, we cannot

finish this chapter without first asking: Would you like
to know the origin of the word "money"?
Money derives from "denarius" (silver coin from the

Roman Empire),13 which originally had a weight of 4.5
12
The Ur-Nammu code is a set of laws (what remains of the original text)
written in Sumerian. Its probable date is 2100-2050 a. C. and belongs to the
renaissance period of this town.
There may have been other sets of previous laws, although the Ur-Nammu code
is maybe the oldest text of this type that has survived to this day.
The first translation of this code was made by Samuel Noah Kramer and pub-
lished in 1952. Kramer, Samuel Noah (1952), History begins at Sumer.
Below is a brief part of this code that could be preserved:
"If a man deprives (another man) from liberty, that man shall be taken prisoner
(and) shall pay 15 silver gin ”.
13
Denary (from the Latin denarius) was an ancient Roman coin minted from
the 3rd century BC. Its weight, composition and original equivalences were...
22
Money and wellness
grams. I suggest that the next time you go to the super-

market —regardless of whether the term money has come
from "denarius"— do not try to pay your bill with that
old currency or intend to make a conversion to it— its
oddness has raised extraordinarily its value. A better op-
tion would be to use the common currency you use as
money in your country.
...4.5 grams of silver with an initial value of 10 “aces” (“ace” symbol was “I”, the
symbol for a “denarius” was an “X”, which meant ten, and a quinary equaled
five “aces” and its symbol was “V”). The denary would become as of the 3rd
century b. C., the basis of the new Roman monetary system.
Tito Livio (59 b. C.-17 a. C.) History of Rome from its foundation, Editorial Gre-
dos, Madrid.
23
24
Money and wellness
Chapter 2
Money
Evolution and
recent past
Real basics
It could be said that, as a result of what was mentioned

in the previous chapter, and even though many have
considered money as a concept that must have an in-
trinsic "value" or in itself, its true role always headed in
another direction.
Rather than pretending to become part of the goods and

services to which it only represented, or considering it
important enough to possess an intrinsic value, the mon-
ey’s essential objective since its origin was to become a
kind of common denominator of values available, which
in turn would definitely make the relevant function of
exchange of goods easier.
It is worth highlighting something merely circumstantial

that at the time we had to resolve: the fact that having
assigned a kind of intrinsic value was only a provisional
or temporary substitute, since given an understandable
lack of credibility of the public towards this means of pay-
ment, money could comply with that which was, is and
shall be its basic objective: to become a universal com-
mon denominator of interchangeable or tradable values.
This shall help us better understand the circumstantial

cause of having to give for so many centuries a kind of
provisional "intrinsic value" to that element known in
English as "money": to ensure its universal acceptance
since once we were, sort of speak, influenced without
25
even realizing it by the hidden and invisible stimulus of

its "efficiency", we had to guarantee by all means the
universal capacity of exchange of such medium of change.
Just as the invisible influences of both "efficiency" and

"mutual convenience" operated in favor of the universal ac-
ceptance of money, it should be added that —and to better
understand the unfolding of this wonderful process— there
were also factors that acted "in the opposite direction". As
an evidence of this, let me describe some of them only:
The vast majority —including some authorities in turn

of the past centuries— did not fully assimilate that, if
the role of money was not to have a value in itself, but
rather to turn it into a kind of universally accepted means
of payment, it was necessary to be able to generate the
confidence of citizens towards this monetary element,
which would depend to a large extent on the proper
management of public finances.
However, since this was not the vision or at least not at

the required level establishing its basics was more than
difficult. Oh, gosh! And what on earth are those “basics”?
If money is only a medium of change, then we should

look at what it really represented... And what was that?
Well, it represented no other than all marketable values
since the exchange of goods had become essential for all
members of communities in the world since the barter,
as we saw, was not an "efficient" or practical option in
such a needed exchange.
In other words, money would basically require no value

in itself, although —listen up— something that we fre-
quently overlooked is that, if we wanted it to fulfill its
basic purpose, we should safeguard certain elementary
rules. And which ones were those?
26
Money and wellness
If money "represents" certain amount of interchangeable

values —by pure logic—, the amount of money circulat-
ing should always be a simple equivalent to the sum —as
close as possible— of said goods and services. This matter
sounds surprisingly simple, is it not?
Well, despite the simplicity and overwhelming raison

d'être of this axiom, many people didn’t consider it that
way —even a few still today— or realize that deep down
the real role of money is not other than becoming a kind
of interchangeable and "visible" promissory note it rep-
resents: the tradable and available goods and services in
society.
This simple reasoning in turn leads us to understand

the raison d'être of that kind of equation14 or essential
balance that we must always keep if we really want this
important monetary resource to work adequately.
The fact that this reasoning is not fully assimilated

throughout history makes us understand why we have
been wrong so many times. And it will not matter
whether the most convincing political leader or person in
charge of public finances has the best intentions, believe
me, whenever the aforementioned equation or equality
between "goods" and "money" were not observed, its
effects were as negative as the disparity between these
factors.
This explains why every time we have had a higher

amount of money than its counterpart —for goods and
services acquisition—, inflation has been manifested, and
on the other hand, when the public's payment capacity
was lower, deflation or recession ensued.
14
The term equation means equality. In this case and for purposes of this
analysis, we are referring to a mathematical equality between two expressions:
"money circulating mass" and "available quantity of goods and services".
27
Furthermore, we learned little by little that it is not ad-

visable to be at either ends, since just as health itself,
our organism does not work properly in the extremes
but rather in a balanced condition.15 This same situation
occurs in any community.
Given something so obvious, the question is how is it

possible that the political or financial authorities of past
centuries had not noticed this and, in many cases, by
neglecting the balance of the equation referred to as
"circulating" and "goods", have placed in serious trouble
their own people?
For a better understanding of the matter, I would like to

expose in the following chapters some cases that illustrate
how, throughout history, we have incurred in those er-
rors. But first let me show you those that have a greater
degree of "justification" in such discrepancies, as well as
some of its consequences.
However, anyone could reasonably ask how could politi-

cal or economic authorities incurring in such errors be
"justified".
In addition to some inability in the past to understand

the importance of safeguarding the equation between
"money" and "goods", there were other mitigating factors
that better explain what happened, look:
Just as in ancient times there were those who assumed

that the Earth was flat, others argued that "the sky is
round but the Earth is squared", and as incredible as it
15
Our health, for example, is not good if the temperature, glucose, blood pres-
sure, body weight, heart rate and many more elements are out of the recom-
mended ranges, either up and down. All parameters must be within range.
28
Money and wellness
may sound to you only a few hundred years ago —17th

century— after the Earth’s roundness was generally ac-
cepted, it was taken for granted that our planet remained
still and the Sun revolved around us.16
This will make us understand why it was not until well

into the 20th century, as I mentioned in the prologue, that
the theses of most experts in economic matters began to
evolve in the right direction.17
Other mitigating factors were the primitive and almost

non-existent availability of control means. Nowadays we
all know every country has a very respectable institu-
tion that acts as Central Bank responsible of issuing and
controlling the amount of "circulating money" or means
of payment. In the past centuries, there was not even the
emergence of such key institutions. Surprising, isn’t it?18
A further justification for the absence of adequate mon-

etary “controls” in previous centuries was the lack of
measuring steps and institutional information. I can’t even
imagine the primitive calculations available in those days.
For example, I wonder how the appropriate amount of
money possessed by citizens or the sum of goods produced
in those years were evaluated in Spain during the 16th or
16
Of course, there were many outstanding scientists who realized a different
reality, as it happened since the ancient Greece with Eratosthenes and Aris-
tarchus (3rd century BC), and in the 16th and 17th centuries with Copernicus,
Kepler and Galileo.
17
It should be noted that there have always been people who intuitively
glimpsed —as we will see later— the quantitative effect of money on the com-
mon well being, but their thinking could not be projected in a tangible way
towards the whole community for different reasons.
18
For example, the final version of the US Central Bank, the Federal Reserve,
one of the most advanced institutions in currency matters in the world, was
created in December 23rd, 1913. One of its main purposes was to keep the
money supply flexibility according to the currency and the country’s interests.
http://www.federalreserve.gov/faqs/about_14986.htm
29
17th century. That would explain or justify the serious

mistakes incurred in those not so long ago centuries.
As if it was not good enough, there was another mitigat-

ing factor19, perhaps one of the most powerful but in this
case, we will refer to a psychological element, which
represented an important role:
Imagine, dear reader, that you were nothing less than the
person responsible for the finances of the Roman Empire
at the time of, say, Constantine the Great (Roman Em-
pire, 4th century AD). The emperor asks you to address
before the most crowded square of the capital city or the
Senate and, given your power of persuasion, explain to
them that —since precious metals are required for other
purposes— from now on the coins of the whole empire
shall no longer be coined of silver… future money will
be made up of nickel, bronze and printed paper. This will
not alter at all the purchasing power because you will be
responsible for ensuring or maintaining a perfect balance
between the two key factors mentioned above and, as a
result, you agree to prevent altering the least possible the
purchasing power of the citizenship.
I don’t want to question, my dear reader, (for the mo-

ment, responsible for the finances of the Roman Empire)
your so remarkable oratory ability, to be pessimistic or
to underestimate your persuasive speech as recently
assigned finance minister but I think that the results of
your attempt shall not be successful either at political or
economic level.
I regret to say, my dear patient finance minister of the

Roman Empire, that we will have to add other elements
19
This doesn’t mean, dear reader that I received fees from the political or
financial responsible entities back then for supporting their performance. I
never met them, I was not born yet, you can bet on that. As I said, I was born
in the 20th century.
30
Money and wellness
to these mitigating factors such as financial needs of

some politicians, different military campaigns, plagues
and other circumstantial calamities.
Others could question that with such limitations in the

past centuries and, to make matters worse, with no basic
elements of any modern economy to maintain the neces-
sary equity in terms of “circulating” and “assets”, how was
it then that there were no more hyperinflation events as
those occurred in more recent years.
In this case I can only give you credit because you as-
signed a specific value, both of material and psychological
nature, to the coins made of precious metals.
The value of material nature stems from the significant

fact that the “circulating” level was automatic and circum-
stantially restricted to the availability of precious metals
(unlike paper money), which helped at least to safeguard
certain equity of the aforementioned equation.20
As I said, before, we must not overlook the fact that

having assigned the coin an “intrinsic value” was just a
temporary and transitory substitute of the main element
that should have ever existed: credibility in the institu-
tions in charge of the monetary issuance that should have
been responsible or aware enough of the topic in order
to safeguard the essential equation between circulating
“money” and “assets” available.
These monetary authorities, control mechanisms and

information, however, and the basic understanding in
20
Don’t even think I miss this phenomenon of the past. The underlying reason
and the real strength of any currency or means of payment in the world is its
purchasing power and the equity with the goods and services such currency
represents. When institutional credibility emerged in most countries, the need
to assign an intrinsic value to the currency became void.
31
the matter, as we know them now, were conspicuously

absent, so precious metals had to take over, at least tem-
porarily.
This will help us to understand why, despite the lack of

many monetary elements now considered basic, most of
the time in the past centuries these inflationary events
did not occur often. The circulating mass growth was
necessarily circumscribed to the precious metals avail-
ability they were made of.
To verify that the true solidity of any currency is essen-

tially not its intrinsic value but the equivalence it actually
represents, i.e., the goods and services available, I chose
one of several cases that occurred throughout history
where we can see that any circumstantial abundance of
precious metals that would have allowed the minting of
more currency than that of its counterpart —"goods and
services"— generated the so feared inflation, which only
confirms the validity of the aforementioned monetary
equation.
Therefore, I can assure you that there shall be no substi-

tute or precious metal capable of replacing the respon-
sibility or wise leadership of any government or central
bank in the world.
Let us refer now to the second aspect —in this case, the
psychological nature— that makes us identify the role
played by precious metals, which I deliberately related
to a very important element that comes into play in the
longed for price stability: the consumption rate.
You might be thinking, what on earth is the author trying

to tell us? I don’t pretend to drive you crazy, my dear and
patient author, so let me give you an example:
32
Money and wellness
If any region of your country or the world were facing

an impending catastrophic event such as a hurricane, a
war or any other calamity, whether or not this potential
risk has the negative consequence expected, the follow-
ing would happen:
A large amount of groceries, water and different items

would disappear from the shelves of your nearest super-
market, and something similar would happen with fuels
and many other products …
It’s true! Some of you will say that you remember what
happened at the mere possibility of such an event. What
is the reason for this?
The answer is simple, the purchasing “rate” increased,

which in turn caused an impact in the already mentioned
equation. But how did precious metals come into play in
the past centuries?
Since the consumer considered wiser and a more fore-

sighted measure for him and his family to accumulate or
keep his silver or gold coins instead of hastily acquiring
goods he might have or not required, I guess he could
have contributed in a small proportion to tempering or
decreasing the consumption rate,21 which in turn contrib-
uted unwittingly to maintain the aforementioned equity.
With this simple example of a catastrophic and unex-

pected event, my intention is to first highlight the way
in which the element “rate” is also a decisive influence
21
Let us never overlook that a country’s result shall not be more than a
simple sum of all the individual decisions taken by millions of consumers. If
a catastrophic event such as the one described is regional, temporary or non-
representative nationwide, it shall have no major consequences, otherwise,
the authorities in charge of public finances will immediately take into account
any eventual increase in the consumption rate to make their analyses, evaluate
their effects and take further actions.
33
as it circumstantially alters the normal pattern of citizen

consumption. It also acknowledges the role that heavy
metals played in the past and helped preventing someway
many more inflationary events from triggering.
As I said, I do not pretend to weigh the fact that money

contains at present an intrinsic value in itself since,
fortunately, the situation nowadays is different, and we
already have institutional credibility, greater economic
knowledge and countless means of control and informa-
tion to safeguard the balance between money and goods,
which made money with specific value meaningless. I
just wanted to analyze its important role in past centuries.
Now, in order to make this matter even clearer, I would

like to provide you some more tangible and educational
cases. Therefore, in the next chapter I will share a few
experiences from history in which we can see our mis-
takes and the way we can and should prevent such dis-
crepancies, because whoever learns well from the past
can always count on a better future.
34
Money and wellness
Chapter 3
More understandable
inflation
Spain 16th Century
Let’s travel now through History to other less than to

Spain in the mid-16th century —as if we were using
again the wonderful but imaginary time machine— so,
once there, we can be privileged witnesses of a unique
scenario:
Few nations in the world and throughout centuries had

before them such a promising scenario as this country’s
at that moment... Why?
A few decades earlier, a series of highly relevant and

unbelievably favorable events had come together in this
European kingdom that, combined, had a very positive
economic impact on Spain.
Upon its unification at the end of the 15th Century, Spain

found itself22 discovering a huge and promising continent
full of resources where there was also a very favorable
contrast regarding the development and management of
different weapons, which practically guaranteed their
“conquest”.
To make matters even easier, they had reached an agree-

ment with the Portuguese upon a singular partition of
22
Spain learned of the fact until early 1493 upon the return of the first trip. It
should be noted that the two surviving caravels arrived to the Iberian Peninsula
by different routes because they drifted apart after a strong storm. Admiral of
the Ocean Sea (Life of Christopher Columbus) Samuel Eliot Morison. Fondo
de Cultura Económica.
35
these newly discovered lands, which, they assumed le-

gitimized such possession for their exploitation.23
Hence, by mid-16th Century, when they had almost con-

solidated their dominion not only over such territory but
also over their resources, they could have never imagined
even in their best dreams the scenario before their eyes.
Therefore, huge quantities of precious metals, mainly

silver, began flowing into Spain. The vast majority of
the people would have bet that they had before them a
phenomenal economic future with the resulting power
in global context…
But... Did the fact of such a surprising amount of finan-

cial resources entering in Spain in the form of a “hard”
currency (coined in silver) actually mean that sufficient
wealth, prosperity and stability had arrived in Spain to
substantiate an unparalleled expansion?
23
TORDESILLAS TREATY. Signed in Tordesillas (province of Valladolid, Spain)
between by Spain and Portugal representatives on June 7th, 1494 in which they
reached an agreement to divide the "New World" according to certain limits,
although they were inaccurate.
The king of Portugal (John II) claimed that derived from the previous Treaty of
Alcáçovas, signed on September 4th, 1479, Portugal had certain rights over the
newly discovered territory (later called "America"). Thus, King Ferdinand of
Spain, taking advantage of the fact that he had already exchanged favors with
the newly appointed Pope Alexander VI (Rodrigo Borgia), and to his considerable
influence on him, requested and obtained his support over the aforementioned
controversy with Portugal. The papal support was materialized through 4 bulls
(Inter caetera I and II, Eximiae devotionis and Dudum siquidem) totally favouring
the Spaniards by decreeing excommunion for all those who crossed a certain
meridian. To avoid major conflicts, however, the aforementioned treaty was
celebrated, which was later signed by Pope Julius II through the bull Ea quae
pro bono pacis in 1506. Admiral of the Ocean Sea (Life of Christopher Columbus)
Samuel Eliot Morison, Fondo de Cultura Económica.
The Events that Led to the Treaty of Tordesillas, Lawrence Cohen; Terrae Incog-
nitae 47 (2): 142-162. ISSN 0082-2884.
Alexander VI and the demarcation of the maritime and colonial domains of Spain
and Portugal, 1493-1494, Vander Linden; (Oct. 1916) The American Historical
Review. Vol. 22 (N.º. 1). Pp. 1-20.
36
Money and wellness
Had there been a breakthrough in financial and eco-

nomic management to, among other things, achieve an
adequate equity between the “circulating” and “goods”,
things would have been different. As expected, however,
the situation resulted in something else due to the limited
conditions of the time in terms of knowledge and means
of control:
Although these new possessions made Spain powerful

during that period, the kingdom faced an economic con-
flict that no one ever imagined, which for years was also
unexplainable for many.
Wow! Why? Let me tell you what happened: Since the

circulating mass had a strange growth within Spain with
the entry of that unusually large amount of silver, they
inadvertently altered the obligated balance or equation
between the “circulating” and the “available goods,”24
which, in turn, generated extremely negative effects for
them despite their bright perspectives.
Note that the main problem of such a situation is that,

when such a discrepancy arose between these factors,
their harmful effects decreased not only to an apparent
and harmless internal inflation, but also generated a gi-
gantic imbalance with extremely damaging consequences:
Do you think the author of this book is exaggerating?

Could this inflation have hurt so much Spain? Was infla-
tion even higher than the rest of Europe? The issue was
not as simple as a mere price increase within the country;
24
In other words, according to the most recent quantitative theory of money
of the economist Irving Fisher (1867-1947) stated: P (prices) = M (money
circulating mass) × VT (speed of transactions), formula similar to that of his
predecessor Alfred Marshall (1842-1924).
37
this condition caused a pernicious domino effect that af-

fected an undreamed-of number of issues. The following
happened in its early stages:
The items that were produced in Spain automatically

turned out to be more “expensive” both for the Spanish
consumer, as well as for the rest of Europe and other
commercial partners. This fact halted Spanish exports
because they became more expensive with respect to
similar goods and instead favoured —competitively speak-
ing— imports from those with whom they traded. Would
the problem have stopped there?
I wish it had been so, but that was only the beginning.
That alteration in Spanish prices only lit the wick to a kind
of time bomb that continued with a series of subsequent
events... What events?
As I said, such a situation has not only brought down

to a seemingly harmless loss of competitiveness for the
Spanish producer, but, obviously, it pushed the consumer
to prefer imported goods as many times as he could. And
what did that generate in turn?
Not only did it have a decisive effect on the Spanish

economic slowdown because it was necessarily followed
by a decrease in the level of internal employment and
productivity due to its products losing competitiveness,
but this unforeseen phenomenon was accompanied by
a not less harmful consequence:
The loss of competitiveness of its own products caused

by the excessive flow of imported goods has as one of its
main disadvantages that it had to be paid for somehow
just like a trade deficit —besides the decrease in its in-
ternal productivity and employment level.
38
Money and wellness
This led to a very significant and unfortunate cash drain

from Spain —with the new arrival of silver from Amer-
ica— to foreign markets.25
We should add other aggravating factors to this problem,

such as wars with some neighbouring countries, signifi-
cant departure of citizens towards America, and, as if
that were not enough, a weak and backward banking
and financial system as a consequence of the unjustified
expulsion of bankers and Jewish citizens* that began at
the end of the previous century as a result of the religious
intolerance of that period.
These combined factors caused that —despite the ex-

traordinary outlook of only a few decades before—, the
Spanish crown entered in state of insolvency in several
25
This phenomenon of inflation in Spain in the 16th and 17th centuries was
adequately analyzed by the historian and economist Earl J. Hamilton (1899-
1989) who addressed the issue in some of his works, such as American Treasure
and the Price Revolution in Spain, 1501-1650), Harvard University Press, (1934);
War and Prices in Spain, 1651-1800, Harvard University Press, (1947). However,
since the 16th century, this singular fact was well observed by the priest, phi-
losopher, theologian and Spanish economist Martín de Azpilcueta (1492-1586),
who, among other academic activities, lectured at one of the most advanced
learning centers of the world of the time, the University of Salamanca, Spain.
He was also considered one of the most remarkable intellectuals of this period.
Some intellectuals consider that Martin de Azpilcueta was one of the first for-
mulators of the quantitative theory of money since he highlighted the impact
on prices due to a possible excess or lack of precious metals. (Let us recall that
silver was considered at the time closely linked to “circulating money”).
* The term “Jew” to designate the Hebrew people is incorrect. In Acts of the
New Testament, the Israelite nation created after the reign of Solomon was
divided into two sections: On section was the tribe of Judah (“Jews,” who
settled in and around Jerusalem) and, to the north settled the remaining eleven
tribes This community that referred to those in the Jerusalem region as “Jews.”
Another fact is that those who wrote the already referred to texts came from
the largest group —the eleven tribes— which, over the centuries, led to the
incorrect denomination of the Israelite community. A more precise way to
name this important population of the global community would be “Hebrews”
or “Israelites”. This author refers to them as “Jews” because it is so recorded
in many History books.
39
occasions, and its yet poorly developed financial and

economic system managed to get through by very unfa-
vorable financial arrangements to foreign bankers.
It is fair to recognize, as I said before, that this type of

discrepancies between “circulating” and “goods” has more
attenuating or justifying elements because the economic
knowledge and means available to preserve price equity
at the time was much more behind. This situation al-
lows us to understand to a large extent that the apparent
and extraordinary prosperity they had was reduced to
a possibility that lasted relatively little compared to the
extraordinary potential they had at the time.
The serious and reasonable errors in economic matters

to which I referred were accompanied by political and
humanistic nature issues such as the significant fact of
having ignored prominent people, e.g., Count of Aranda.26
These circumstances made a great difference in decision
making. Count of Aranda proposed in 1783 with a sur-
26
Pedro Pablo Abarca de Bolea (10th Count de Aranda, 1718-1798), Spanish
general, diplomat and politician with illustrated and liberal ideas, very cultured
and with a very advanced political vision for his time was highly respected
among philosophers and encyclopaedists. Voltaire once said, “With half a dozen
men like Aranda, Spain would regenerate”.
He held positions as ambassador, president of the Council of Castile (1766-1773)
and Secretary of State under King Charles IV of Spain (1792).
He was ahead of his time and, in the last two decades of the 18th century (1783)
during the reign of King Charles III, he proposed unsuccessfully the creation
of a Spanish commonwealth that would give autonomy to almost all Spanish
America, with its freedom and unity being prevailed taking into account certain
mutual aid agreements between its members. This proposal, which was rejected
by the lack of political and humanist perception of the Spanish crown at the
time, became one of the most important factors that contributed to the brake-
up of almost all the American domains from early 19th century. Should Spain
would have followed such a guideline, it could have influenced politically in
a universalist and integral direction of the Hispanic countries, as in fact hap-
pened much later with the “British Commonwealth” created at the beginning
of the 20th century, in which, although the freedom and independence of its
members is respected, there is a series of reciprocal advantages between them.
40
Money and wellness
prising vision to grant autonomy to almost all American

domains, creating at the same time a kind of Hispanic
commonwealth.
Why do I also mention this political and humanistic as-

pect in the case of Spain during that period? Weren’t we
supposed to be dealing with economic issues? It seems
the author has already lost his way. As we will see in the
last part of the book, if you have not thrown it away, the
economic, political and humanistic aspects are closely
linked, and the global dilemma at present is no longer
limited to an incomplete “Hispanic commonwealth” but
to something else with a much more advanced dimension.
For the time being, join me in the analysis of the follow-

ing case.
1921-1923 German inflation
The psychosocial effects influenced by the monetary im-

balances of the case that I am about to describe should
be considered as irrational and certainly reprehensible
even though from a purely economic perspective these
could be somewhat “understandable”.
Regarding the economic context, what happened in those

years that caused such a powerful impact in subsequent
events?
In WWI and subsequent years, Germany had generated a

still tolerable inflation, which until the first half of 1921
made its currency (German mark) reach a level close to
60 marks per US dollar.
However, the 1921 significant hyperinflation triggered,

although it is not the strongest registered, influenced
41
decisively in the disastrous events of the following years.

Therefore, it is likely that no other negative monetary
imbalance had been projected … What on earth hap-
pened then?
There was already a higher level of understanding about

the relevance of keeping an equity between the "money
supply" and its important counterpart, "goods and ser-
vices" during the first decades of the 20th century. The
purpose in those years was to "link" in some way the
amount of the "circulating mass of money" to existing
reserves of gold or foreign currency27 to prevent a gov-
ernment —as a result of certain justified or not internal
socioeconomic pressures— from issuing more paper
money than recommended by economic logic.
The German needs derived from the WWI itself, as well

as a series of events to which I shall later refer, caused
the issuance of much more paper money than financial
caution advised, which not only caused "circulating
mass" to exceed its existing reserves in precious metals
27
As I said, I believe that there shall be no substitute for the responsibility or
lack thereof of any government in the world. When you do not proceed wisely,
there will be no gold, silver, oil, diamonds or whatever comes to your mind that
avoids the consequences of a wrongdoing. If a metal, anyone, were to be over-
exploited and exceeded the existing demand, its price would decrease (together
with the currency it "represents") and its handicap would be proportional to the
existing discrepancy. As an example of this —and since you have not thrown
the book away yet— I quote some phrases taken from the Bible itself, from its
historical context: (Chronicles 2 9:20) “Silver was considered of little value in
Solomon’s day.” (Chronicles 2 9:21) “For the king´s ships went to Tarshish…
every three years once came the ships of Tarshish bringing gold, and silver,
ivory, and apes, and peacocks.” (Chronicles 2 9:27) “The king made silver as
common in Jerusalem as stones, and cedar as plentiful as sycamore-fig trees in
the foothills”. I doubt there is anyone who can provide reliable data on the exact
amount in circulation in that realm in those very remote years. I could almost
bet that said capital loss was a mere consequence of an excess supply with
respect to a given demand, which only resulted in the aforementioned effect.
42
Money and wellness
and currencies, but also exceeded something much more

important: the goods and services to be acquired by the
money held by the public.
You could have all the right to say... How could Germany
incur in such a discrepancy? Didn’t those who were man-
aging the German economy at that time know the risks
of doing so? Of course they did, although they certainly
assumed that was the least harmful option. But what ef-
fects did such a monetary imbalance have on the social
wellness of the country?
Every inflationary situation is harmful to any community

in every way and from very different angles. This social
and economic damage shall depend on the level of mon-
etary discrepancy that takes place, and as I mentioned:
the discrepancy between the level of "circulating" and "
goods and services available."
For this reason, the prices of goods and services —as it

usually happens in this type of cases— began to raise in
Germany since 1921 in an increasingly sharp way, re-
ducing thereby the purchasing power of the citizenship.
The price of bread, for example, along with the long list
of groceries was rising by leaps and bounds, and, among
other effects, the exchange rate during the first half of
1922 (Deutsche mark — US dollar) had already changed
a lot, although it seemed to stabilize around 320 marks
for every US dollar.
However, in a situation like this completely understand-

able nature, another element of a psychological nature
must necessarily be added up, as I described in previous
pages, and refers to the way the public reacts to another
type of eventuality... But, to make matters worse, how
can factors related to human attitude also come into play?
43
Believe me, if we don’t take into account the public reac-

tion, our forecasts will fail. Damn! Why? Look:
Consumers, upon a fast and growing money deteriora-

tion and justifiably concerned about the decrease in their
purchasing power, modify their usual pattern of consump-
tion, which, in economic terms, accelerates the "speed
of expenditure" and exponentially weigh the discrepancy
between the currency and goods, as I mentioned in pre-
vious pages (before the sole possibility of a catastrophic
event), derived from an extremely simple reasoning…
Since people are not interested —rightly— to keep a

means of payment that each day is worth less, they
choose better to keep "goods" than "money". Therefore,
as soon as they have funds, they acquire goods and get
rid of their money.
As you will understand, once all negative elements of

such a situation were combined, the damage started ap-
pearing to such an extent in the German community that
by mid-1922, a very prominent US banker named J.P.
Morgan tried unsuccessfully to intervene and mitigate
such a lousy situation. However, once the hyperinflation-
ary process continued its pernicious course, as well as the
causes that gave rise to it by December 1922 the Deutsche
mark had already skyrocketed to 8,000 per US dollar.
As you can imagine, this situation —especially when it

comes to such a sharp imbalance— is not limited to a
mere loss of the purchasing power of all citizens, which
in itself is already serious, but like a gigantic "tsunami",
an expansive wave is produced altering the entire social
and economic structure.
As evidence of this, even the German farmers refused

to sell their products in exchange of a currency that
plummet precipitously, and requested that they get paid
44
Money and wellness
with other types of "goods". With this posture, society

seemed to go backwards with respect to the "evolution
of money", in which one of its intermediate stages was
precisely the "barter" that operated with a very high
level of "inefficiency" already discarded. Many people,
however, preferred the “barter because of the situation”.
Unbelievable, right?
The socioeconomic situation reached such a level in

1923 that a saver who wanted to withdraw money from
a banking institution —even modest sums—, had to carry
suitcase with him to transport his resources, although
in fact, he could not buy much with that voluminous
amount of bills.
It’s not hard to imagine dear reader, that such a situa-

tion discouraged altogether something essential in every
economy, saving. To make matters worse, the ordinary
citizen could not even acquire foreign currency in order
to save since such a resource was required by the govern-
ment in order to pay war reparations.
Another drawback of this hyperinflation was that those

citizens who managed to save throughout their lives, in
prevention for old age, diseases and the unexpected, almost
suddenly saw the effort of their entire lives turned to dust.
The harmful expansive wave, however, continued its

course. Those who wanted to carry out a productive in-
vestment by creating some kind of business that would
generate employment and contribute in a small propor-
tion to improving the economy couldn´t meet their goals.
If at all, they would manage to cover a wall with that
pile of money paper since they could not use them to
start a modest store or factory, which only contributed
to worsen the conflictive situation.28
28
As you see, the discrepancy in the important equation between "circulat-
ing" and "assets" can occur not only when there is an abnormal increase in...
45
As if that were not enough, faced with such a fragile situa-

tion and with the consequent unemployment and collapse
in purchasing power, the potential "market" was little
or nothing attractive for an eventual national or foreign
investor who thought to undertake any type of activity.
The combination and interrelation of all the negative

factors was such that by November 1923,29 one pound of
bread cost 3,000 million and one pound of meat 36,000
million deutsche marks, respectively.30
You might ask, how could they have allowed this situ-
ation to be reached, causing such a gigantic social and
economic damage?
In previous pages I referred to the political and humanis-

tic aspect —for better or for worse, depending on the right
or wrong approaches each one has— that shall always be
projected towards the economic issue. In this particular
case, if some of the German politicians or from abroad
who had an impact on the matter had an exclusive and
limited vision, the problem could have been perfectly
well founded... So what was behind this unfortunate
German economic discrepancy in the early twenties?
First, I will describe some of the causes behind the scenes

that decisively influenced this discrepancy, and then some
of its effects. At the end of this chapter —before you
decide to destroy the book— we’ll see the reason why I
deliberately chose this monetary imbalance.
...the first factor (money) but also by a decrease of the second one (goods). With
the economic activity decrease, this second but crucial element of the equation
weakens or falls, causing an impact in its balance.
29
Data taken from a commemorative Medal of the German inflation period.
https://www.pinterest.com/pin/270919733807671590
The great inflation, Germany 1919-23, William Guttmann; Patricia Meehan,
30
Gordon and Cremonesi Ltd, 1976.
46
Money and wellness
Let us see therefore the singular approach that unfortu-

nately prevailed in some characters of European politics
immediately after the end of World War I.
It should be noted that I do not pretend to attribute any

responsibility to a certain country. In all the peoples of
the world there have always been very valuable people,
along with others who do not have a complete social per-
spective,31 and their actions are only a simple projection
or consequence of their particular way of thinking. What
were some politicians of that period thinking?
Due to a series of revenges and quarrels derived from

previous war conflicts,32 and as settled in the Treaty of
Versailles in which not only the defeated nations were
held responsible for such a war but they were forced to
war reparations way above —in terms and conditions
demanded— their real capacity unless they complied
to the detriment of their healthy development, just as it
happened.
This meant that the "hard" currency (supported by gold

and foreign currency) they had in Germany had to leave
the country in the first payments on account of the re-
pairs demanded, while they had to print paper currency
31
Note: the author of this book worked in the field of international trade for
years. I had the opportunity to meet a lot of people from a business or com-
mercial rather than a “tourist” approach, and believe me, that’s where you can
get to know everyone better. I assure you that there are many people with a
great human quality. And others, nor so much.
32
These quarrels derived from past wars, such as the Napoleonic war, the
Franco-Prussian War and others, which seriously contaminated the thinking
of some leaders at the end of that so-called “Great War” (1914-1918). This
thinking influenced in the decision of “punishing” and almost humiliating in
a very special way the “defeated” nations, as it was expressed in terms of the
Treaty of Versailles signed on June 28th, 1919. Some dates were deliberately
chosen, such as the day of the treaty signing, which was the 5th anniversary
of Archduke’s Franz Ferdinand assassination, one of the events that led to such
a regrettable event: World War I.
47
for their domestic needs in an amount far higher than

its counterpart in goods and services.
The severity of the 1919 Treaty of Versailles33 provisions

reflected the particular way of thinking of some politi-
cians who prepared the manuscript, causing the unfor-
tunate socio-economic result within Germany that only
strengthen the antagonistic feelings that would result in
a much worse conflict: World War II.34
33
George B. Clemenceau (French politician, 1841-1929) was one of the politi-
cians whose negative influence lead to the mistakes in the Treaty of Versailles
that took part as one of the most prominent negotiators of the Paris Peace
Conference in 1919.
During the preparation of the Treaty of Versailles, he eagerly insisted to punish
Germany in an admonitory way through the payment of high war reparations,
the incorporation of the Rhineland to the French economy, the complete ex-
tinction of the German colonial empire, the expropriation of properties from
German citizens in these colonies, as well as other plans to decisively weaken
the defeated army. Its extreme position was partially mitigated by the presi-
dent of the United States, Woodrow Wilson and the British Prime Minister,
Lloyd George, who opposed to such a position preventing thus Clemenceau’s
intentions from being fulfilled, although they could not prevent the approval
to several provisions designed to “definitely” weaken Germany. Clemenceau
believed until the end of his days that the defeated Germany had been treated
“too kindly”.
I consider that the majority of the French people did not support their extremely
inflexible position since in 1920 Clemenceau lost the elections for the Republic
Presidency. Most historians, analysts and advisers of those years estimated that
the terms of the Treaty of Versailles were too harsh; the damage was done.
For example, John Maynard Keynes declared that this was a kind of “Carthag-
inian Peace”, a term that referred to the brutal and humiliating peace inflicted
on an enemy that has been defeated in war. It stated that the peace imposed
by the Romans on Carthage after its defeat in the Punic War II (218-201 BC)
in which Carthage lost all its colonies, was forced to demilitarize and pay a
constant tribute to Rome.
Perhaps that is why the English Lord George Curzon declared with great skill:
“This is not a peace treaty, but a 20-year truce”.
“The Economic Consequences of the Peace, John Maynard Keynes, London:
Macmillan & Co., Ltd.
34
It is worth mentioning that throughout the 1920s, the economic situation
was somewhat attenuated despite the severity of the payments required
due partially to the timely intervention of the German economist (Hjalmar
Schacht 1877-1970) who managed to lessen the deteriorated socioeconomic
outlook. The United States Great Depression in 1929, however, had a serious...
48
Money and wellness
The following is an example of only one of the negative

stages fostered by such limited political and humanist
thinking:
If you have wondered where anti-Semitism originated

before World War II, it could be said that it was a mixture
of three factors. The first one was the misinformation of
some journalists and writers who dealt with lightness and
ignorance the pathetic situation already described of the
referred hyperinflation and attributed the responsibility
of such regrettable state of things to the "speculators"
among which they chose as their favorite villains, the
"Jews" and "bankers". The second factor was the severe dif-
ficulties of the period and, third, the emergence of populist,
radical, racist and of course misinformed leaders35 —which
usually happens in these cases— as Adolfo Hitler.
Anyone could think... How on earth could the German ne-

gotiators had agreed to sign the Treaty of Versailles in 1919
in such unfavorable terms? They had no room for maneuver,
they had already been warned that their refusal meant the
"resumption of hostilities" and, with the recent incorporation
of the United States in the warfare (1917), the situation had
turned completely towards the allies, which was unfortu-
nately exploited to toughen the terms of such treaty.
Why do we relive this type of events? The purpose is

only to weigh the impact of having or lacking the right
approach. Thus, I am presenting as evidence a different
action and effects in a similar situation:
...impact around the whole world, impacting more vulnerable economies,
which also caused more bankruptcies and unemployment in Germany. This US
depression could have been attenuated and above all prevented should more
advanced economic and monetary knowledge had been available. This finally
caused an impact to the already fragile German situation, which gave access
to power to a populist and ill-informed leader like Adolf Hitler.
35
For a number of reasons that we will see in the following chapters, the
populist is usually unable to offer real solutions to conflictive situations, and
their solutions are worse than the problems themselves.
49
Believe it or not, at the end of the World War II there

were several politicians with an extremely limited vi-
sion36 —similar to those who influenced in 1919 and
1920— who wanted to reapply the same failed idea of
the Treaty of Versailles (imagine), or worse still, which
fortunately did not happen.
The position of outstanding characters such as George

Marshall prevailed for the benefit of all.37 Marshall fully
realized that when human beings make the serious mis-
take of reacting to an irrational position by putting ahead
a similar or even worse position, we completely break
down the social fabric that only worsen things.
Therefore, George Marshall, rather than preferring the

proposed revengeful position, chose a series of principles
and values that should always prevail in the global com-
munity, contributing and influencing decisively a plan
for European reconstruction through the support of the
victors and the vanquished. As you may suppose, this per-
formance generated diametrically opposed results, since
with the support of other outstanding personalities,38 this
36
Such as the American Henry Morgenthau Jr. (1891-1967).
37
George Marshall (1880-1959), general and American politician (Nobel Peace
Prize), was the main promoter of a plan called "European Recovery Program"
(ERP), better known as the Marshall Plan, which had a great impact (along with
other characters of similar thinking) in the European recovery. This different
vision contributed to the European unification by promoting the elimination of
tariff barriers, the creation of institutions to improve its economy and fostering
a shared development.
He was able to carry out this project despite the opposition of politicians from
different countries.
38
Robert Schuman (1886-1963), due to his origin from Luxembourg, France
and Germany, had a decisive influence in the European Union composition.
On May 9th, 1950, he delivered a famous speech that is considered the first
formal declaration of such integration. For this reason, at the Milan Summit
in 1985, the Heads of State and Government present decided to establish May
9th as the Day of Europe, in commemoration of such declaration.
50
Money and wellness
different position paid off in the right path and over the
years resulted in the European Union.
Therefore, in addition to analyzing the causes and effects

of the hyperinflation above, I used precisely this example
that occurred in Germany during the 1920s to weigh first
the negative effects and incorrect vision in comparison
with the results of a very different position at the end of
World War II. In the final part of this book —if you haven’t
destroyed it yet— I’ll tell you why I made this decision.
But the bad news for now is that the book is not over yet
and, worst of all, I invite you to continue reading so that
you cannot only learn about other inflations less justified,
but the causes that produced them.

51
52
Money and wellness
Chapter 4
Almost unforgivable
inflations
20th Century inflations
I shall describe below some somewhat representative

inflations that occurred during the last century, which
would be convenient to analyze in terms of their origins
and consequences.
Have you ever wondered what has been the sharpest infla-
tion in history? It all seems to indicate that it occurred in
Hungary in 1945 and 1946. As a result of a kind of "perfect
storm" in terms of its origins, this monetarist phenomenon
not only broke all the imaginable parameters and turned its
currency into dust, but it also had a very serious impact on
the Hungarian society that required it as means of change.
What happened and how far did things go?
At the end of World War II (1939-1945), the collapse of

the Hungarian population purchasing power was so sharp
that shortly after the end of such a disastrous war, and
once completed the Soviet occupation of its territory,
10 million (its currency was called "pengó") bills were
already circulating.
But that was only the beginning. The country’s productive

capacity was so weak that in the following months the
prices of products began to rise at an astonishing speed,
and doubled in such reduced periods that they two-folded
every 15 hours. Imagine the purchasing power collapse
of the citizenship.39
39
Peter Z. Grossman y János Horváth. “The Dynamics of the Hungarian Hy-
perinflation, 1945-1946: A New Perspective”, vol. 29 Iss. 2 (2000) p. 405-427,
Journal of European Economic History.
53
The inflation daily rate was slightly higher than 200

percent,40 until 100-billion pengó notes were printed at
some point,41 which gives us an idea of the purchasing
power loss.
How can anyone solve this kind of situation especially

with things reaching such an extreme? The solution in
this case could not be other than adjusting the monetary
base to the real production level of goods and services. It
should be noted, however, that such a measure —espe-
cially in the short term— would bring the country into
shock at a socioeconomic level.
In a country with liberties, such an adjustment would

generate many demonstrations, strikes, work stoppages
and serious problems that would cause a vicious circle
in terms of the economic health recovery of the society
in question.
However, in this totalitarian society they were all of

a sudden under the Soviet guardianship, they had no
great options so, over the years, the "medicine" applied
provided certain stability with obviously the terrible
limitations such an economic system entails.
40
Inflation continued to grow despite the fact that the Hungarian government
created a new currency as an emergency measure: The "adópengó". However,
since the causes that gave rise to the economic imbalance persisted, the dete-
rioration in purchasing power continued its course.
41
I considered the possibility of selling this book in a billion pengós, although
I changed my mind mainly for four reasons: 1. The coin is no longer in use
as it was replaced first by the adópengó, then by the guilder, and lately by the
euro; 2. I would not sell a single copy because apart from the fact that no one
has such currency, the price would scare away all possible buyers; 3. This price
would not fit in the labels; and 4. The department stores would not accept my
books since they would assume that I am out of my mind, something very far
(I hope) from reality. But guess what, I would love to keep a bill if I found one
as a reminder of the terrible experience the Hungarians went through.
54
Money and wellness
But... How did such a situation arise? What made such

a state of affairs grow? As I said, several unfavorable
elements were combined. The following are the most
relevant. First of all, the significant clashes between the
German and Soviet forces within their territory in the
final phase of the war caused a considerable destruction
of their economic infrastructure, which, as expected,
reduced their productive capacity in almost all orders.42
As for the political aspect... How the hell could any

leader with the most basic common sense thought to
collaborate in some way with a racist, fanatical, aggres-
sive and misinformed dictator as Adolf Hitler in such a
war adventure —apart from other considerations— when
his own regent Nicolás Horthy43 was convinced that the
odds of winning a war against the allies were reduced,
especially if the United States intervened again, just as
it happened.
You are not going to believe it, but among other elements
that contributed to that fatal decision was another event
similar to the Treaty of Versailles that has been already
mentioned in previous pages, which had a decisive im-
pact.44
42
As I said, an inflationary situation can occur mainly by two means: a) Un-
duly increase the monetary base, or, b) Reduce the productive capacity for
any reason. The simultaneous combination of both alternatives would be a
worse situation.
43
Nicolás Horthy (Miklós Horthy de Nagybánya, 1868-1957) was regent of
Hungary from 1920 to 1944. He had the faculty to place or remove the prime
minister. He had political leadership of the country during that period.
44
The Treaty of Versailles version for Hungary was the Treaty of Trianon, also
signed in France on June 4th, 1920, by which the Hungarians not only saw
their territory decrease from 325,000 to 93,036 squared kilometers (many of
the separate regions of Hungary were already a critical topic, but nowadays
they have all merged successfully into a new community that has a much more
advanced inclusive spirit: the European Union. However, the terms of said
Treaty of Trianon only created antagonisms, revenges and serious hostilities).
The Hungarians lost 63 per cent of their population (without prior consul...
55
This influenced in Hungary’s political decision to coop-

erate with Hitler. They realized their fatal decision too
late, which bounced off against them at the end of World
War II.
Another element that contributed to the discrepancy be-

tween "money" and "goods" —a key element of all infla-
tion— was the psychological aspect, which was projected
in two ways:
On the one hand, the population perception before such

a doubtful political scenario, and once the Soviet invasion
and control was completed, increased the uncertainty
which accelerated the citizen pattern of spending that,
in practice and economic terms, increased the "speed of
consumption". This fact further altered the already de-
teriorated balance between "money" and "goods", which
certainly had an effect on a higher price increase and
less availability of goods, contributing to the increase of
citizen distrust and exponentiation of its effect.
The second but not less important psychological element

that also caused an impact was that, before the citizen's
belief (grounded or not) of the almost imminent forced
establishment of a "centrally planned" Soviet-style econ-
omy, the already limited possibility of private investment
in the production and services line was further reduced,
which contributed to a decrease of the meager supply
of "goods".
...tation of the segregated population), all of their gold, silver, mercury, copper
and salt mines, half of the coal mines and almost all of the iron mines, 84% of
its timber resources, and 43% of its farmable land. The perception in Hungary
at that time was that the Treaty of Trianon not only had stripped off, but also
slowed their economic recovery, which generated a great feeling of revenge of
fatal consequences. The country’s policy in the following years was oriented
towards the revocation of the aforementioned treaty, which Adolph Hitler, as
any good populist as he was, had offered.
“Revolutionary Hungary 1918-1921”, Szilassy, Sándor (1971). Danubian Press.
56
Money and wellness
The combined action of all these elements caused this

economic imbalance to reach the dimensions described
above. Let's look in another direction, in another conti-
nents, and analyze other inflations that might seem small
compared to the one I just referred to. However, I think
it is important to analyze not only the consequences on
their population, but also their true origins.
In Latin America of the 1970s, there were monetary im-

balances that could not go unnoticed... What happened?
According to the influence of a determined political and

economic tendency that was fashionable in several poli-
ticians of Latin American countries and even in certain
international organisms of the time, and —according to
the perception— derived from a certain dose of "progres-
sive" ideology, it was considered that perhaps State in-
terventionism should be encouraged to further stimulate
the region's growth, socioeconomic development and
income redistribution.
I am certain that some were really convinced that "public"

investment could become a kind of engine or trigger ele-
ment of a much greater growth, which would transform
the scenario of the region as a whole.
Despite these so worthy intentions, however, the results

were not only disappointing but also even counterproduc-
tive,45 although in each of the Latin American countries
where this route was chosen different levels of damage
were reflected.
45 This was manifested in the monetary issue —which is the topic that con-
cerns us today— but it had a very negative impact in the social wellness of
each community that carried out this experiment.
57
Let us analyze, for example, what happened in Mexico

from 1970 to 1982.46 It should be mentioned that this
country had had a stable growth since the establishment
of a single political party.47 Furthermore, in the twelve
years prior to the described statistical experiment, Mexico
had had an annual sustained economic growth of around
seven per cent, with an inflation lower than that of its
main trading partners. This period was known by the
international financial media as the "Mexican miracle".
However, a new political group created within the

dominant party influenced by the described "stabilizing"
feeling observed that despite having had for many years,
especially from 1958 to 1970, one of the highest economic
growth in the world, there were still important social
backwardness48. They made, in my opinion, a somewhat
erroneous and light diagnosis:
They considered that the "economic model" had to be

modified given that —as they said— the previous one was
already obsolete. They proceeded, with the conviction
of those who feel possessed by a special enlightenment,
46
Period comprising two public administrations, Luis Echeverría Álvarez and
José López Portillo.
47
Although that party had different denominations since its inception, its
last and current name is Institutional Revolutionary Party (PRI). It should be
noted that many people in Mexico and abroad mistakenly consider that the
fact of having had only one party for decades meant in some way the continu-
ation of a single political or economic trend, which is inaccurate. There were
presidencies and economic policies of almost all aspects throughout the term
of this party in power.
48
These gentlemen did not put on the analysis table that one of the causes of
social backwardness was that the Mexican population of the time was growing
too fast since it doubled in periods of 28 or 29 years (data from the National
Institute of Statistics, Geography and Information Technology, INEGI-Mexico).
This fact made it impossible to two-fold the infrastructure required at that same
rhythm, which was physically manifested with many deficiencies in housing,
employment, education, water supply and many other things.
58
Money and wellness
and soon amended the previous monetary policy known

as "stabilizing development",49 replacing it with another
model they named "shared development".
This new monetary and economic project —without

prior citizen consultation— included as one of its main
characteristics the growth and channeling of important
financial resources to state enterprises, which they be-
lieved would guarantee a better and safer return in the
form of goods, services, productivity and, in short, well-
ness for the entire community.
Despite these praiseworthy intentions, the results went

in a far from expected direction. Perhaps those creating
this project were the most surprised with the disappoint-
ing response of said productive scheme; and its negative
effect was manifested at the end of the first presidential
period when the economy was already in trouble and the
previously strong economic situation had deteriorated
significantly. But think about this... how do you imagine
that the group in power reacted? Did they immediately
backtrack on that risky project?
Not only did they continue in that same direction, they

even emphasized even more in state interventionism.
Furthermore, they ensured that whoever continued in
the next political administration (1976-1982), should have
that same line of thought. Oh! Right, they attributed the
serious economic setbacks to "external factors" but with
an additional element: they trusted something they con-
sidered would be the decisive factor that would ensure
their success: Mexico’s large reserves of oil, assuming
thus, that the abundance administration was just around
the corner .
49
Applied masterfully by whom I believe has been the best Mexico’s Secretary
of the Treasury of all times, Antonio Ortiz Mena (1907-2007).
59
A few years later, the economy once again showed another

unexpected scenario. Despite a gigantic entry of oil resourc-
es in that second public administration,50 reality manifested
itself in another way. Nevertheless, they miscalculated
things. They forgot, e.g., that oil prices could stabilize again,
which in fact happened. This unexpected aspect, along with
other mistakes, caused a financial catastrophe:
The foreign currency reserves were exhausted. The ex-

ternal debt payment was suspended for a while. In that
12-year period, the accumulated inflation was 1233.51
percent,51 the fiscal deficit and the balance of payments
became untenable. There was already shortage of some
products, Mexican credit cards were no longer accepted
abroad. Mistrust grew as manifested in capital flight,
foreign and domestic debt grew at an inconceivable level
of 1204 per cent,52 and state companies,53 as you can
suppose, continued their insatiable thirst for financial
resources, which had to be withdrawn from somewhere.
50
In 1976-1982 45.4 billion dollars entered Mexico from oil. Surely many must
have considered: How could such a figure not be reached?
Source: Mexican Energy Sector.
51
Source: INEGI (National Institute of Statistics, Geography and Information
Technology; Mexico) National consumer price index.
52
Sixth President’s Government Report Gustavo Díaz Ordaz. September 1st,
1970/.
House of Representatives; Centro de Estudios de las Finanzas Públicas; Es-
tadísticas Históricas De La Deuda Pública En México, 1980-2002, p. 16. Super
bicentennial table Mexico 1810-2016
53
It is important to mention that some advocates of state interventionism are
totally convinced that state companies (such as PEMEX in Mexico) are prac-
tically bankrupt because “the State took away their resources”. The truth is
actually that the government did not even withdraw from that state entity the
value of crude oil and gas extracted from the subsoil, which do not belong to
the state company but to the whole country. PEMEX should only have always
handled the direct and indirect cost of extraction, exploration, and refining in
its case, the rest should have fully gone to public finances. I hope there comes
the day soon when a specialized technical audit reveals the amount of resources
that the state company wasted.
60
Money and wellness
How did the creators of such an economic project explain

that unfortunate situation? The "external factors" and the
"bad Mexicans" were blamed again, just as if a bad engi-
neer or architect would react if his recently built house
had just collapsed blamed the force of the wind or even
gravity, rather than stating that the laws of physics were
simply not respected.
What failed in that disgraceful experiment from 1970 to

1982? Weren’t the intentions of that political group not
only good but excellent? History is full of examples that
show that it is not enough to have the most praiseworthy
intentions; it is essential to stick to the laws and invisible
conditions that move the world around us astonishingly.
The specific way in which the economic project of the

two political administrations referred to was completely
broken down occurred as follows:
For reasons that I shall refer to hereinafter, state-owned

companies in general have no rate of return equivalent
to the amount invested, which is a seemingly harmless
aspect. Rather it means that the production of goods and
services does not only grow proportionally to the amount
of "circulating" channeled towards them.54 In practical
terms, it alters the equation between" circulating "and"
goods".
54
Furthermore, they begin to borrow at a striking rate, which not only in-
creases internal and external debt, but the entire community must pay, both
the principal amount and interest. For example, in March 2017 PEMEX owed
$181.1 billion dollars. This figure means that if such a debt were distributed
among all Mexican families, $96,325 pesos would belong to each family. Strictly
speaking this figure would be supported by PEMEX "assets", however, a large
part of them are considered as scrap, and others have already exceeded their
useful life; but the debt of such company must be paid any way.
Source: PEMEX; Consolidated Balance Sheet, March 31st, 2017; INEGI number
of families. 2016.
61
The next mandatory step of such a productive vacuum

would be manifested first in the much-feared inflation,
which will have to be devaluated year after year by the
"inflationary differential" should this be greater than its
trading partners.55 Damn! Why does this procedure have
to be necessary? The opposite would cause something
similar to what happened in the 16th century Spain, as
easy as that.
In other words, things are not as simple as the brave

defenders say about the "state-owned company" who
just need to wrap themselves in the national flag when
delivering their moving speeches. Let’s take a look to
what actually happened:
The fact of working this type of entities with "higher

costs" with respect to other competitive national or inter-
national companies —that will also force them to operate
as monopolies— is equivalent in practical terms to the
description below.
Their lower efficiency shall be transferred invisibly to

the public, who will receive it, almost without realizing
it, as a "productive vacuum", which imperceptibly con-
tributes to alter the equity factors of the cited equation
between "circulating" and "produced goods", pushing
undoubtedly prices up.
55
That is, if a country has 12 per cent inflation and its main trading partner’s is
4 per cent, the currency must necessarily be (duly) devaluated (let me remind
you that at that time there was no floating scheme) in 8 per cent. Now, if you
do not want to face the political cost —careful— something similar to the com-
petitiveness loss in the 16th century Spain will occur. Domestic exports will
be expensive in the international market —which shall decrease— and imports
shall at the same time cut their prices, which shall increase them, a fact that will
open a "hole" in the trade balance that implies a significant outflow of financial
resources, unemployment and a decrease in the domestic economic activity.
62
Money and wellness
This apparently irrelevant aspect started the 1970-1982

period crisis, as I already mentioned, starting in the form
of inflation that led to a loss of competitiveness of domes-
tic products, followed by the trade balance deficit, chronic
need for financial resources and increasing indebtedness
of public entities, subsequent unavoidable devaluations,
mistrust, capital outflows and many other issues.56,57
Now, as I was saying, the political, humanistic and eco-

nomic aspects will usually be closely linked, which would
force us to an essential reflection: What ideological moti-
vations were behind those policies that led —among other
things— to the inflation that occurred in Latin America?
Were these also one of the factors that influenced this
very serious monetary imbalance that occurred in Hun-
gary in 1945-1946?
Ideological motivations
One of the elements influencing to a greater or lesser

extent the politicians who promoted state intervention-
ism58 derives from certain slight though unnecessarily
56
In the specific case of Mexico, the following presidents of that same party
(Miguel de la Madrid Hurtado and Carlos Salinas de Gortari), despite being
people from their own team, realized from their privileged positions the unpar-
alleled economic setback and began to return to the previous scheme, a change
that took another 12 years. This caused a) a significant decrease in economic
growth after 1982 due, among other reasons, to the payment of interest on the
monumental debt left by the previous ones, and b) an important split in the
ruling party (PRI). In 1988, those who left found another party to continue with
that same 1970-1982 project, despite the disastrous results obtained.
57
In the 1970-1982 period of the failed state interventionist experiment, Mexico
devaluated its currency by 1094 per cent. Source: Magical Mexico; Thermometer
of the Mexican economy, historical indicators 1935-2017.
58
Almost all advocates of the state productive scheme felt some antagonism to
the free enterprise system and grant very little legitimacy, which drives them
in some way towards the bureaucratized company.
63
voluminous analyses prepared by scholars on social

issues, such as Karl Marx, which makes us carry out a
brief and yet better analysis of his theories.
This character posed his very singular point of view with

full certainty in his statements and such a deceptive
erudition in his words that many of us —yes, including
me before reaching the age of 20 and of course without
having made yet a deep analysis on the matter— were
impressed by his revelations.
In my case, I changed my mind after analyzing the mat-

ter and exchanging ideas and opinions with people who
had experienced the way of life, productivity, availability
of goods, bureaucracy and other aspects of a "socialist"
country.
Have you ever wondered why this dark difference be-

tween the voluminous theory and good intentions of this
19th century writer with such a different reality apply
to this thesis? Why if one of Karl Marx postulates was
precisely "to free the people from the heavy burden of
bureaucracy", but actually his followers only got exactly
the opposite, i.e., the establishment of the bureaucracy
of bureaucracies where everyone became employees
of a clumsy and inefficient State leaded by a corrupt
minority that, to top it all, has to be dictatorial in order
to safeguard the permanence of such a socioeconomic
useless theory.
The reason is incredibly simple. Things were far from

being duly structured at economic, sociological, historical
or political level starting from the base itself of that fuzzy
and so elaborate theory. Given its interrelation with the
monetary balance, I’d like to share with you my point of
view so you can judge why I consider it so.
64
Money and wellness
The good news is that I won’t need the three volumes —1

441 heavy pages— of The Capital59. I’ll just try to explain
in a few pages the relevant issues, hoping also that by the
time you finish reading this book and decide to get rid of
it, it won’t take took much space in your bin.
One of Marx’s statements, which is not far from the eco-

nomic and social reality, is the “Work Value”,60 although
I must say in this regard that the author could not avoid
using a complex pseudoscientific terminology often daz-
zling many people, including me.
59
Karl Marx (1818-1883). I refer to the three volumes of The Capital. The
first volume was written in 1867, the second (1885) and third (1894) volumes
were written by Frederick Engels after Karl Marx’s death based on Marx’s
manuscripts. Over 20 books written by Marx are known, some of them with
Frederick Engels as co-author. The first book was fiction. The best known are:
Economic and philosophical manuscripts (written in 1844 and published posthu-
mously until 1932), The Communist Manifesto (together with Federico Engels
in 1848), The Capital, Volume I (1867), The Capital Volumes II and III (written
by Federico Engels in 1885 and 1894).
60
Adam Smith (1723-1790) is one of the greatest classical economists. Some
Marxists pointed out that he argued that the value of work is an unmovable
element. This assessment is, however, incorrect since he defined it clearly
as a variable factor. A proof of this is that in his masterpiece (The Wealth of
Nations, 1776), Smith states that the value of work is a factor of mobile pro-
duction, among others, when employers, seeking to optimize their costs, will
try to develop any product in the country or region with a more competitive
labor cost. This optimizing dynamic —not considered by Adam Smith— also
contributes in an invisible way to disseminating or universalizing economic and
social development towards less advanced areas and reducing its subsequent
sale price in more developed ones. Furthermore, David Ricardo (1772-1823)
added other components, and Karl Marx later defines that the value of work is
subject to the "socially necessary" time of work to produce each commodity, a
statement that in practice might not say much. We now know that the value of
work will be subject to a combination of elements such as labor quality, training
or education, specific demand of each commodity, local skill of personnel em-
ployed, productivity, technological advances, emergence of alternative products,
demographic factors (a country with a higher population growth sometimes
increases labor supply —usually not trained—, which pushes down the value
of labor force in an abnormal way) as well as many other temporary aspects.
65
For example, he describes that the price of a product

should be subject to its "use" and "change" value. I refer
to such reasoning because despite its validity, he omitted
or perhaps didn’t know that such elements are just a part
of the natural components of the demand. The worst thing
is, however, that in the practice (believe me) establishing
the "use" and "change" values for each item purchased
without considering the other elements intervening
would require a huge amount of specialized personnel
to reach an uncertain and useless result. It would even
be ridiculous to pretend establishing all prices that way,
whether referred to the cost of any of the production
factors or the sale of all merchandise.
Furthermore, it would be unforgivable not to analyze

many of his statements. In large part of his voluminous
work The Capital —absolutely convinced of his theses—,
Marx repeatedly implies that a worker always produces
"surplus value", a vital element that the entrepreneur, in
a somewhat advantageous way according to his particular
perspective, took advantage in his benefit.
This statement is inaccurate. Human work does not always

produce "surplus value." For example, what would happen
if an entrepreneur, whether large, small, or even a worker
owns a workshop, produces items or provides services and
has an inadequate management of resources, such as time
availability for him/her or his/her subordinates, monitor-
ing production costs, quality control, raw material use,
packaging, storage, inventory control, design, competitive
prices, good service and many other things?
Far from producing the well-known "surplus value",

this situation will generate something that we could
call "handicap", which the employer or worker shall be
responsible of, if he were to own his small company or
workshop.
66
Money and wellness
The key question would be: Who will pay for it? The sum
of all those "disabilities" will be borne precisely by the
employer, or the owner of the workshop or business in
question. In the case of a "productive State enterprise",
i.e., a bureaucratized company,61 it generates "handi-
caps" —as it usually happens in them— and accumulated
losses will go directly to the public treasury. Damn! And
why does such a thing happen? The reason is extremely
simple, and results from a serious omission in the afore-
mentioned theories. Let’s see:
Something that went unnoticed by Marx and his loyal fol-

lowers is that Nature endowed all process considered as
vital,62 with a certain "primary" stimulus. This generates,
without realizing it, another "secondary" consequence,
which although almost always goes unnoticed, produces
something that will be truly important from a social and
economic context.
Thus, if the owner of a large or small business, or as I

said, even the worker as owner of a workshop, wants to
obtain a utility (primary stimulus), the owner will feel
impelled to make a careful use of "his costs" without
there having no decree in this regard, i.e., the resources
available starting with time, raw material, quality, good
prices, good service and other elements. Should they op-
erate otherwise, far from obtaining the desired utility, an
61
Not all state companies are harmful. There are some educational and service
issues that should operate well if they are properly supervised. In the case of
productive companies the situation is different, mainly with the exploitation
of certain renewable or non-renewable natural resources where a successful
mixed partnership between "public" and "private" companies would be suitable
to take advantage of and minimize the disadvantages of both schemes, provided
that they are properly controlled in terms of their operation and results.
62
Among which we could state human procreation, paternity, food, health
and life care, personal development and effort, resource optimization (as the
case referred to above) since all assets and countless other things are "limited".
67
automatic "loss" will ensue that would go directly against

the pocket. This would also act as an invisible "punish-
ment" towards anyone who does not use properly the
assets under his/her responsibility.
This simple mechanism acts in such an unnoticeable way

that it completely eluded both Marx and his brave and
sometimes fanatical followers.63 Imagine for a moment
what would happen if all the citizens of our country or
the world were not motivated for that invisible and sur-
prising conditioning factor created... What do you think
would happen almost immediately?
Correct! We would unconsciously but significantly

decrease our level of care regarding the correct use of
resources. This would mean that, among other things,
all entities or individuals —as in the vast majority or the
"productive State enterprises"— would no longer employ
with the same care truly qualified staff for each position,
monitor adequately that the purchase of inputs and the
granting of contracts is made at inflated prices,64 neglect
the control of in process or finished products, waste part
of raw material,65,66 operate with higher costs than the
competition and many other essential issues.
63
While there are elements such as the one described, which were not even
remotely perceived by any follower of the "socialist" (or state interventionist)
theses, it must be acknowledged that these have been “successful” regarding the
expansion strategy of their theories, focusing their theses towards certain key
organizations: a) teacher training institutes, b) state universities and c) certain
(few) governmental or non-governmental organizations.
Thus, especially in the teacher training institutes and certain universities, since
most students are not very knowledgeable about the subject, they can lead
them to accept this doctrine, and the influence that they in turn project on the
society will be more significant.
64
It is therefore no coincidence that corruption flourishes precisely in this type
of productive scheme.
65
As with PEMEX in Mexico, where the “productive state enterprise” —among
other things— uselessly burned almost all of the associated gas from one of the
largest oil deposits in the world (Cantarell), some officials argued (who prefer...
68
Money and wellness
One of the first manifestations of operating in this way

would be the following: the productivity of goods and
services would be significantly reduced, even from its
early stages, which would contribute to the rise in prices,
followed by a long sequel of negative effects, and, if the
whole economy were under this contrived scheme, it
would put in serious risk even the food itself. The worst
thing is that, in case of prolonging the use of this not so
new "secret recipe", there would be problems of basic
supply for large sectors of the population.
This is how serious the problem would be —as it has

already happened in the countries where it was applied—
and all this is due to something apparently simple: the
seemingly inoffensive fact of ignoring the actual opera-
tion of the free enterprise system created by nature since
ever for our benefit.
One of Marx's far-reaching discoveries was that property

was a kind of dispossession for the community. Unfor-
tunately reality was not exactly on his side... Why do I
say it?
Results obtained from economic entities and property

conservation have always been conditioned in an invis-
ible, natural and simple way to its correct administration.
...to maintain anonymous), that “they did not have resources”, when a company
operating different, even assuming they did not have working capital, would
simply have issued bonds or obligations equivalent to a percentage of what they
would obtain with said gas, and take advantage of the rest. I insist: no technical
analysis from a specialized organization reliably indicating the dreadful amount
of billions of dollars that the inefficiency of this state-owned company has cost
the country has been carried out yet, or at least not made public, while there
were serious deficiencies in countless areas. Would it be better not to know?
66
It is very important to point out that within many state-owned companies,
such as PEMEX, highly distinguished people often collaborate, but in spite
of their capacity, they can not usually reach their true potential due to the
bureaucracy that this type of entities divest.
69
For example, let's say that John Doe —greetings to all

those who bear such a name, although I hope they do
not charge me with royalties for quoting them— receives
as a legacy a ranch, factory or even a small workshop. If
John does not carefully monitor the resources under his
responsibility, he will lose his property.
Gee! Why? The conservation of the property and all assets

is conditioned to its proper management, which is only
a consequence of John having the ability to optimize as
best as possible all the resources he now has in hands.
Let us imagine for a moment that we ignore Marx —or

his current disciples— and we suddenly get rid of this
invisible mechanism. How would we monitor and even
encourage the efficient use of resources to be used by each
and every citizen of the economically active population?
If a huge and incredibly expensive army of inspectors

walked through the streets of your country performing
tons of all kind of audits, even using very sophisticated
accounting and administrative control procedures such as
"time and motion analysis" among others... What would
we achieve?
Actually nothing, apart from further decreasing the lim-

ited social productivity and receiving mainly a real burst
of excuses and pretexts. There would be nothing more
than vain explanations with a long, ingenious and witty
list of reasons why they are not only unproductive but
also trying to give grounds to receive an increasing sup-
port or subsidy from the government in turn, or whoever
was in charge of the economic activity.
Damn! And how could we avoid this? The answer is by

keeping in a drawer Marx’s discoveries and observing
70
Money and wellness
that the system naturally and simply stimulates —or

punishes in its case— the productivity and efficiency
level of everything each one carries out.
Would it be necessary to ask another hard-working dis-

coverer like Karl Marx to help us find such a system? I
think the best thing would be to not bother them because
we already have one that has always been with us: the
free enterprise system. What we must do is circumscribe
and channel all its angles through appropriate health,
civil, criminal, labor, tax, corporate, environmental and
consumer care laws so that the productive citizen action
is focused towards the real common benefit.
Observe carefully what is achieved through such a sys-

tem (if someone prefers, we could call it "new" to have
a sense of discovering something). Do you know what
John would do if he disregarded the proper management
of his ranch, factory or workshop he has just inherited?
He would lose his property and would have to sell what
remains of the property to someone who would also be
subject to the same rules.
But the opposite could also happen. If our hypothetical

friend John is on the ball, makes an effort, does enough
research, surrounds himself with, trains and pays well
the right staff, experts advise him, and is market ori-
ented, among other things... What would happen? Not
only shall he keep his new property or business, but he
will make it grow generating thus more employment,
contributing in a small proportion to increase the pro-
duction of goods and services, which along with others
acting like him, will increase productivity and everyone's
standard of living.
With respect to those who are not careful, will the free
enterprise system not be acting too drastic against them,
71
since they must lose everything for the simple fact of not
being a good administrator?
I feel that nature does not want to take risks because

what is really at stake is nothing less than the wellness
of the entire community and prefers that the cost of all
inefficiency be paid only by whoever falls into it. Isn’t
the author exaggerating?
Taking advantage of your patience and making use of our

imagination, I invite you to let it fly a little. Let's suppose
that John did not properly manage his inheritance and,
since we want to be kind to him, we don’t want him to
lose his property... Would there be any way out there to
"protect" him so that this sly automatic "punishment"
that always comes into action every time someone does
not manage well his/her property cannot impact him?
Should there be an additional help for that "loss", "dis-

ability" and the subsequent debts that John is generating
as expected, how could we endorse the cost of all this
to someone else? Well, there is a way, my dear reader,
although I ask you never to tell anyone that a clueless
book author suggested it.
If we can nationalize every mismanaged ranch, factory

or workshop, the cost of any inappropriate management
will no longer impact our now protected friend John,
although the following scenario will ensue…
In a nationalized company the "primary" stimulus of self-

interest disappears, since it is usually managed by care-
less people who would not “pay for the mistakes made".
This will not only significantly reduce the subsequent
"secondary" effect, which is the so needed contribution
of goods and services. But John would have something
much better: He will no longer have to worry so much
72
Money and wellness
about all the debt or deficit he generated, since this shall

be the public treasury responsibility.67
Furthermore, if John manages his public relations well —

he will have to be very clever—, offers jobs recommended
by certain officials or key political groups, grants the
contracts to those “assigned” by senior executives (even
if they are high or low "inflated"), and lavishly distrib-
utes perks, he could continue with the possession and
administration of the nationalized assets almost as if he
were the owner. It would someway be better than before,
because now, as I was saying, he would no longer have
the annoying usual worries of every owner, such as the
accumulation of debts derived from the losses generated.
May I ask as a special favor to those who follow this

free advice from the author? Don’t mention that the real
way to harm or deprive the community is not owning a
property, as Karl Marx said, but following the original
suggestions of the confused author of the book you are
holding.
Off the record —be discreet, please—, you should know

that if many companies follow my not so original prescrip-
tion, they would reduce substantially the contribution of
goods and services to the community, which will impact
from its early stages the so feared inflation. Later will
be worse, so much so that, I assure you, the true cost of
consequences will be transferred to the entire community
in a disguised manner.
67
Despite the fact that the cost of an eventual mismanagement is the respon-
sibility of the owners, there are significant oversights and waste in the use of
resources, as evidenced by the closure of a significant percentage of companies.
How would this affect the level of administrative efficiency of each business
if all "loss", "disability", "deficit" —or whatever you to call it—, and their sub-
sequent debts were no longer in charge of the owners but the public treasury?
Which would be the community results?
73
Thinking about it, I'd better say: considering that the

damage of my nothing new indication would be so disas-
trous —including not only the reader, author, relatives,
acquaintances and practically everyone, even John him-
self—, I sincerely ask you to strip off the previous page,
and tear it into pieces even before you throw it. I would
not like someone to carry out such nonsense, otherwise,
it would make any country to rely from abroad in almost
every way.
Well, once the author has regained his poor judgment,

let's continue now from another perspective... How is it
possible for these invisible mechanisms to operate in such
an unnoticed way on human action? In the first chapters
we talked about the way human beings move influenced
by a series of motivations that, although they have gone
unnoticed by most, do not cease to be surprising. One of
them, as I also described, is the search for "efficiency",
which together with other conditioning factors, helped
us end up with what we know today as "money".
Now, something worthy of attention is that one of the

most remarkable characteristics of these invisible con-
ditions is that they sometimes act in ways that are not
only parallel, but also often even "mixed" with each
other... Wow! What does the author want to tell us? Let
me describe it:
One of those conditions that influences everyone could

be called the "law of least effort", which forces us to
proceed more or less as follows:
If you have to make a deposit at a banking institution,

would you go to the nearest branch, or to the one located
at the other end of the city where you live? Do not answer
this question if you like, although thanks anyway... Do
you know why you could decide in a flashy way? That’s
74
Money and wellness
right, because you decided under the influence of the

law of least effort.68
As you can see, they act as if they were a tiny part of the
most sophisticated carburetor you know, where many
of its pieces operate as if they were "mixed" with each
other, acting in a synchronized way, deliberately trying
to produce a certain subsequent effect. And believe it
or not, the "stimulus" of self-interest, and, surprise, the
"law of least effort" interact —at the same time— in you,
everyone, even me.
Now, let's say that we all become faithful followers of that

witty writer of the 19th century, Karl Marx, and we take
it as a great revealed truth that the self-interest stimulus
is "illegitimate", and therefore we get rid of it... Do you
know what would happen? Easy, an invisible conditioner
would prevail in each other: The law of least effort,
which, unnoticed as well, would generate devastating
social and economic results, I assure you.
As for the postulates in Marx economic sense, almost all

his statements are of this kind, although I would like to
make one more observation regarding his interpretation
of the historical aspect. Marx assumed as an indisputable
fact that the free enterprise system was only a kind of
contrived invention of some individuals to take advantage
of others. Such an assessment is also inaccurate.
It is worth mentioning that to support —some even called

it "scientific support"— to their particular historical in-
terpretation, Marx and Engels integrated, grammatically,
in their analyzes (calling them "dialectical development
68
If you do not operate under this "law of least effort", please, don’t ask me to
go with you in your car to make a bank deposit.
75
of History") the term "dialectic".69 However, they did

not practice it in terms of argumentative mechanics to
reach their conclusions, since the fundamental element
of this process is precisely the integration, evaluation and
comparison of divergent or contrary theories. It should
be noted that Marx's political followers did not respect
the basic elements of dialectics, since for them there was
one truth: theirs!
Now... How could we consider valid the fact that the free
enterprise system —contrary to Marx’s statements— has
been present and acting together with the human being
since practically living in society?
A fisherman, let's say 20 or 30 centuries ago —now we’ll

call him Santiago—, spending whole nights trying to get
fish and take them to the market, didn’t act so as a re-
sult deep social sense that made him contribute to the
provision of goods and services that every community
requires. Rather, Santiago was driven by something else.
He wanted to obtain a "benefit" or "utility" from his ac-

tions, and believe me, without even realizing it, Santiago
and everyone else contributed in a small proportion to
the great total of goods produced and at the same time
demanded by collectivity.
69
If the well-known dialectical triad “thesis, antithesis and synthesis” is not
even respected, any such position could only be placed within the first step:
a simple thesis first subject to its corresponding theoretical analysis and then
to its practical verification. One of the first and true experts of this area of the
so-called “dialectic” philosophy was the great Greek philosopher Heraclitus (540-
480 BC), who claimed that human truths are in permanent mobility subject to
the action of opposites. He argued that contradiction is the origin of all things.
Much later, another great philosopher, among many, was Hegel (1770-1831)
who explored even more on the subject. But Marx used the term to support
his particular vision of Economics, Sociology and History by interpreting the
advance of times as a continuous class struggle or confrontation.
76
Money and wellness
Had this invisible "stimulus" —the basic characteristic of

the free enterprise system— not been so strong, the "law
of least effort" would have prevailed in Santiago, and he
would have slept peacefully at home.
As for Karl Marx as a philosopher, we will find more

surprises, although I would like to address the subject
briefly in the following chapters, if I may.
By the way, more than one Marx’s followers would have

claimed loud and clear that his thinking is "progressive"
or avant-garde, since he agrees with the aforementioned
theses. How much reason this perception would have?
Let me tell you something... Do you know why on ships

the right side is called "starboard" —looking towards the
bow— and "port" on the left? Wouldn’t be easier to say
"right side" and "left side"?70 The answer is to avoid that
crewmen incorrectly oriented or moving to the stern, can
invert the sides and create confusion. Something similar
could happen to us in everyday life. How? Looking also
at things from another perspective.
More than one will right now ensure that they are adopt-
ing a "progressive" stance by following discoveries like
those described. But, actually, they are going backwards
70
If you walk to the bow —front of the boat— the port is to the left and starboard
to the right, regardless of whether the boat is moving forward or backward.
The reason for such a specific name is to avoid confusion because if a crew
member moves to the stern, and calls it "right" or "left" on either side, it
would be exactly the opposite if he goes towards the bow. This way, there is
no possible confusion.
The word "port" comes from the Dutch bakboord, and "starboard" in turn
comes from the German steurobord (consisting of two roots), where "steuro"
means "rudder" and "bord" is "side of the boat". In the old boats, there were no
fixed rudders; the helmsman used a special oar to guide it, which was located
on the current "starboard". Diccionario de la Real Academia Española (RAE),
“Starboard” Online etymology dictionary.
77
and contributing to create an erroneous postmodern

version of the now anachronistic feudal lords. The dif-
ference is that now the feudal lord will be represented
by a bureaucratized, slow and inefficient state that must
necessarily be managed by a minority. Most of the time,
this minority is not prepared for such a position and per-
haps its only —although questionable— merit was having
the "ability" to escalate or take power by assault. This is a
fatal attraction for some to the extent that even —almost
as a rule— the "advantages" of a high political position
predominate to such a level that in practice they place it
far above their own convictions and principles.
Do you think I exaggerate? Let me tell you an odd story that

happened to me. One day I collaborated in an important
radio program in national coverage71 that was broadcasted
from Mexico City. Suddenly, the news reached the infor-
mation center that someone had asked Fidel Castro a rare
question, who at the time was still the acting President.
—Do you believe —asked the foreign interviewer to Fi-

del— that socialism is good for Latin America?
—Socialism is not good even for Cuba—, replied Fidel.
At the moment, I made Adriana, who was hosting the

program, the following observation:
—Mr. Castro— I said —has just had an unexpected access

to honesty (maybe because of his age he was just saying
what he thought, and he no longer answered to political
convenience or his position). But I assure you, Adriana —I
continued while we were on the air— that his statement
shall be denied before a week, arguing that the reporters
were wrong or any other excuse…
71
The host was Adriana Pérez Cañedo and we were at Núcleo Radio Mil.
78
Money and wellness
I then realized that I had gone very far when talking

about one week. Two days later, they not only denied
it but also put Fidel behind the scenes, and placed their
brother Raúl in his place.
But the important thing is: How can translate that state-
ment? That not even a politician like him can afford to
speak truthfully when that after ten or fifteen years of
"socialism" in Cuba, they realized that this system didn’t
work...72 However, what reason could they have had —
had they publicly acknowledged it— after being one of
the longest dictatorships of all time? None. What was the
meaning then of having acted as they did?
His interest for power, in practice, was beyond the well-

ness of his fellow citizens as well as his convictions and
principles. I don’t if you, kind reader, can see it in any
other way.
Another less relevant issue is: Why does this chapter in-
clude in its title the adjective "unforgivable"? Some errors
of previous centuries had a higher level of justification
for many things were unknown. As we also quote, how-
ever, with the increasing level of information and current
progress many aspects and assessments now become
automatically nothing less than inexcusable.
However, this unfortunate effect not only happens at

economic level. There are political and social positions
and adventurism that are also unforgivable, for example,
72
Even though they used the argument of the US commercial "blockade" as
a justifying element for a long time before the misinformed public. I know at
first hand that the commercial blockade did not affect them much, since they
could always trade with more than ninety percent of the countries. Even this
author tried to sell them in the seventies tuna, preserves, tomatoes, toiletries
and many other missing items, and I never had the slightest encumbrance to do
so. The real problem was that due to their great lack of productivity, they did
not have resources and they wanted everything conditioned to a loan granting
of very doubtful recoverability.
79
the racial prejudice: a segregationist stance is nowadays

totally out of place... why?
I remember that as a child I studied Political Geography

where different "races" that made up our world were
clearly identified. To this day, however, due to a series
of important advances in the scientific field, such as the
case of the extraordinary research carried out on the
human genome,73 a never imagined reality came true a
few decades ago, forcing us to another more realistic and
perfectly informed approach:
Through this scientific research we know for a fact that

all human beings come from the same genetic ancestor,
and that the external physical characteristics that we
believed divided us are only the product of other condi-
tioning factors such as the different exposure levels to
the sun's ultraviolet rays, food diversity, climate effects,
education, life habits and other factors that, over millen-
nia, generated certain external characteristics.
Back to the subject of this book, we’ll see in this chapter

the type of monetary experiences derived from state in-
terventionism at different levels, which along with other
negative interacting elements, influenced in the economic
upheavals and ups and downs.
I invite you now to move on to the second part where

we will focus on the present time. Which is the best way
to control a modern economy from a monetary point of
view, so that the equity required for achieving a gener-
alized wellness is safeguarded? What risks do we still
have? Follow me.
73
More than 280,000 regulatory elements are detected in the human genome.
The Human Genome Project started in 1990 and concluded in 2005, although
research continues. Human history somehow reconstructs in its evolutionary
process. The first ancient genome was traced to the African continent where
we all come from. “Ancient Ethiopian genome reveals extensive Eurasian ad-
mixture throughout the African continent”. Science 350, 820-822.
80
Money and wellness
Part two
The present
81
82
Money and wellness
Chapter 5
Monetary balance — steady prices
As we can deduce from what has been explained in the

previous chapters, every modern State —through the ap-
propriate administration of its Central Bank and based
on a sound economic policy— can and must maintain
price stability. Therefore, the State must take advantage
of —among other key mechanisms— the essential balance
between its monetary base74 and the quantity of goods
and services available.
However, many may doubt whether we could really

achieve such a goal considering that all countries already
use a currency or "money" that we could classify as "fidu-
ciary". As if that were not enough, the emergence of an
uninformed government in the matter would be enough
to put an end to the social and economic wellness.
With regards to the "fiduciary money",75 let me tell you

that all kinds of "money" in history have always been,
are and shall be "fiduciary" money... Wow! Why so, if
for centuries we have used, among others, goods-money,
items and large and heavy silver and gold coins?
The only thing that has changed over the years is that
fortunately, nowadays, such a "confidence" required from
a people towards their currency —whatever the name
74
Also known by economists as "circulating mass of money". This term, how-
ever, must be pointed out due to the increasingly sophisticated methods of
payment. Thus, a "monetary base" constitutes everything having the "capacity
to purchase goods". This amount is reasonably quantifiable by the Central Bank
and collateral information and control agencies.
75
The word "fiduciary" comes from the Latin fiduciarius (Diccionario de la Real
Academia Española, RAE), a word that is related to "trust", "faith" or "strength",
an essential element required for its generalized or universal acceptance.
83
may be— has already moved to where it should have al-

ways been: solid and reliable institutions. What basically
happened in past millennia was that, in the absence of
reliable, well informed and responsible agencies —or at
least unlike today—, this "fide", "faith" or "confidence"
had to be temporarily deposited in some means of pay-
ment on certain physical objects. These items were no
more than temporary substitutes for what should always
give sustainability to the so-called "money", that is, the
goods and services that can be acquired with it,76 which
is the ultimate balance that every Central Bank protects.
This institution knows that if in said balance, the greatest

possible equity is not preserved for whatever circum-
stance, it won’t matter how gleaming the “coins” may
be.77 Moreover, if some politicians promise that they own
76
As we saw in previous chapters, thousands of years ago the simple, primitive
and inefficient "barter" operated (in whose exchanged items "trust" or "faith"
was deposited). Then the trust moved to the "merchandise-money" (cereals,
cattle and others), and further to certain items or metals that were widely
used by the majority, such as salt, copper, bronze and iron. Later trust was in
precious metals, such as gold and silver and simple certificates (as ultimately
intended with bills or paper money), that had no real equivalence in practice.
From a statement by then President Richard Nixon in 1971, fiduciary money
was universally accepted and for practical purposes, which was perfectly
supported the goods and services that could be acquired. Let's not forget that
money is nothing more than a kind of "voucher", "promissory note" or "com-
mon denominator" of what it really represents: goods and services. That is
why I have excellent news for you: it shall not be necessary that you depend
on bartering to exchange some goods for others, or to walk down the street
(unless you come back from the market) with livestock, fruit, meat, cereal,
cheese, a drum of gas and many more articles to exchange them for other nec-
essary products. All it requires is to take those small pieces of paper printed
by the Central Bank, "plastic money" or other means of payment in its many
different forms. If I see a person carrying bulky items on the sidewalk to be
exchanged by others in the "market", I will have to deduce that he completely
ignored the author's free advice.
77
One of the possible advantages of not having yet destroyed this book is that
you could check again, if you want, the inflationary experience of Spain in the
16th century, where you would see again how, despite the Spanish people had
a large amount of shiny pure silver coins, inflation was triggered because the
referred equity was not preserved.
84
Money and wellness
the most excellent truths revealed, I can assure you that as

soon as the congruence between these two factors is lost,
in practice there shall be nothing more than the crook and
disguised tax called “inflation”, which shall be followed by a
series of negative effects. As if this was not enough, it shall
hit mainly the most unprotected sectors of our community.
Damn! And how can we mitigate the risks of wrong

handling? Later on we will talk about the subject, but to
avoid this kind of setbacks, it would be very helpful to
be able to count not only on the opinions of economic
experts, finance ministers and researchers who have pre-
ceded us78 but also to have the ability as well to carefully
evaluate the failed experiences, some of them referred to
in the previous pages.
But let's go to the field of practice, which will be es-

tablished in the simplest and most accessible way for
everyone... How can we preserve the aforementioned
transcendental equivalence, as well as everything that
can come from it?
Once each director or CEO —according to the country—

of the Central Bank establishes the most approximate
78
Among the most outstanding economists regarding the "quantitative theory
of money", I can only highlight: Martín de Azpilcueta (Spanish, 1492-1586),
John Stuart Mill (English 1806-1873), Alfred Marshall (English, 1842-1924),
Knut Wicksell (Swedish 1851-1926), Irving Fischer (American 1867-1947),
Ralph George Hawtrey (English 1879-1975), Ludwig von Mises (Austrian 1881-
1973), John Maynard Keynes (English, 1883-1946), Clark Warburton (American,
1896-1979), Earl Jefferson Hamilton (American, 1899-1989), Friedrich Ha-yek
(Austrian, 1899-1992), Antonio Ortiz Mena (Mexican, although more practical
than theoretical, 1907-2007), Milton Friedman (American 1912-2006), Paul
Samuelson (American, 1915-2009), Robert Mundell (Canadian 1932), John B.
Taylor (American, 1946) and several more that I do not mention due to lack of
space. I also include the extraordinary classical economists such as the English-
man Adam Smith (1723-1790), David Ricardo (1772-1823) and so many more
that have made valuable contributions.
85
amount possible of the "available assets", as well as

its variables79 that may come into play... What kind of
mechanisms does this institution have in order to adapt
the amount of means of payment —i.e., "money" in all
senses— and safeguard the legitimate wellness of the
public?
To this day there are very effective means so that experts

and responsible entities in the matter maintain that
monetary balance, from which I describe briefly and
synthesized the most important ones:
If the Central Bank interest rate is adjusted upward or

downwards, the circulating money held by the public can
be increased —additionally to other aspects mentioned
below— or reduced. Something similar will happen if
the legal reserve that the banking system must keep is
modified.
Another effective means of control —something well

known in the financial media— will be operations in the
open market... What the hell is that? Don’t worry it is
nothing out of this world. For example, if the Central Bank
—or the institutions under its control— "sell" securities to
the public, its "collection" is equivalent to reducing the
money supply —circulating money—. If, on the contrary,
79
Among them is the competitiveness of the exchange rate. It is very important
to remember that within the "assets available" for the citizenship of any country,
the "imported" items (that is, those manufactured abroad) also intervene and
should be considered. I would like to emphasize something that many do not
take into account, or at least not with the relevance required: an "overvalued"
currency automatically and invisibly "cheapens" imports and "increases"
exports. On the contrary, an "undervalued" currency shall have the opposite
effect. Therefore, we are talking about a crucial factor that every Central Bank
official should watch in a very special way since an excess of imports will be an
open tap that "drains" in a very dangerous and irresponsible way the financial
resource abroad, thus reducing productivity and employment and damaging
multiple internal variables.
86
Money and wellness
securities are "bought" from banks or from the public,

their "payment" means or is equivalent to the increase
of the "circulating money" held by the public. It's not as
complicated as it seems, right?
It should also be mentioned that the "sales" or "purchases"

of securities in the Central Bank open market also have
an impact on the natural interest rate, since, by reducing
or increasing the financial resources held by the public,
these have an effect on said rate.
The direct issuance of money obviously influences the

same way. In short, dear reader, what I intend to tell
you is that if true experts in the field manage of these
variables, and if it is feasible to increase, or, where ap-
propriate, decrease the amount of money, not only can
it be but, of course, it will be necessary to maintain the
much-needed stability already mentioned, avoiding thus
—except in the case of truly catastrophic events— the
feared inflation or deflation.
Thus, whether at the present time, in practice and in the

vast majority of cases, an eventual risk in that sense no
longer comes so much from the field of economics. In
later chapters I’ll describe better what I mean.
But before reaching this point, if I may, I would like to

briefly address a key point that may have already come
to your mind. Would it be possible not only to maintain
monetary stability with the consequent benefit that it
entails but also to encourage growth in order to have a
favorable impact on social wellness, and thus, to be able
to grow even more in a solid and sustained manner?
Please, don’t throw away the book yet! Come with me,
although this reading might seem like a torment to you.
87
88
Money and wellness
Chapter 6
Growth with stability
Actual development
Now that the author has come to introduce us in this

type of economic and monetary intricacies —although he
has tried to make it understandable to all audiences—,
would it be possible, as he says, to combine that much-
desired price stability with the no less important goal
of greater growth in order to contribute in a real way to
social wellness?
The author considers that if we are able to proceed prop-

erly it would be perfectly possible to combine both goals,
as long as we also avoid the interference of other aspects
that we will deal with immediately. Furthermore, we
should act with all caution, proportionality, supervision,
responsibility and foresight deserved by the socioeco-
nomic health of our fellow citizens.
In that order of ideas, the first and essential condition

sine qua non80 to achieve it would be to always maintain
as balanced as possible the equation between "circulating
money" and "assets".
Even, if I may and before I go on with a negative example,

I invite you to carefully observe the way, wrong in my
opinion,81 in which some proceeded in the recent past:
80
Glossary = Sine qua non, Latin expression that in English means " without
which no" (Cambridge Dictionary). It refers to an indispensable, essential or
imperative condition for something to happen.
81
Several of the most successful economists (in my opinion), for example
Marshall, Keynes (in most of his postulates), Friedman (one of the main
promoters of Chicago’s supply school) and Ortiz Mena (more in the field...
89
Therefore, I ask you to go back to the aforementioned

Mexican case, since this experiment is highly illustrative
or representative that other Latin American countries
repeated with similar results, when state intervention-
ism was so fashionable (in the aforementioned period
of 1970-1982 in Mexico) in which the following actions
were taken:
The failure to recognize de facto that these "public" enti-

ties were unable —due to their intrinsic inefficiency— to
make the crucial return of the "goods and services" pro-
duced as well as the consequent reimbursement, i.e., the
money applied, caused channeling significant resources to
state enterprises. Moreover, to make matters worse, they
generated year after year an astronomical debt. Which
were the causes?
This will surely make you doubt. Therefore, let’s go over

again but from the "monetarist" approach now. What
made them take those actions, say, under a context of
pure economic theory? The promoters of such a policy
pretended, in an illusive and incompetent manner, the
supposed creation of a certain "aggregate demand" com-
ponent that would "stimulate growth" in an important
way. Were they right?
As expressed under another perspective in previous

chapters, this led to the aforementioned disaster, and
the only thing that could prevent a much greater damage
was an understandable change of course in the follow-
...of practical instrumentation than in monetary theory) who showed us in

different ways —either with their theories or concrete facts— the feasibility
of obtaining really solid growth. On the other hand, there were other Latin
American economists who, largely influenced by their ideological cut, in the
seventies and eighties of the 20th century, applied in a distorted and erroneous
way the Keynes’ theories combining them with a strong dose of state interven-
tionism, which led to a complete disaster as briefly exposed above.
90
Money and wellness
ing six years. However, it should be noted that during

the period when the problem was rectified —i.e., after
1982— they could not avoid being severely restricted in
terms of growth and development, due to the fact that,
among other things, the service of the monumental debt
inherited from this disastrous experience tied their hands
almost completely.
Excuse me for insisting, but how did the consequences

of this failed experiment manifest themselves? First of all
in inflation, then loss of international competitiveness,
mismatch in trade and payment balance, indebtedness,
capital flight, greater dependence from abroad and de-
valuations, among others.
If someone wanted to "stimulate the economy" of any

country as described, it would do them much better to
take very long, distant and well-deserved vacations. At
this point, I beg you to refrain from doing so. That is not
the way.
In any case, if someone insisted on repeating such an

experiment, a less harmful way would be to simply let
the same inertia or natural force of the market and pro-
ductivity boost the growth. However, as I said... Would
there be any —healthy— way to encourage development?
This author considers so.
Rather than encouraging the "demand" —and above all

with such economic infantilism as the one described—, it
would be better82 to advise the promotion of productive
"supply" of goods and services. This would also increase
82
Note: this suggestion is just one of the healthy, sustainable and viable options.
The amount of the suggested fund, procedures and instrumentation will depend
on the conjuncture, potential and specific circumstances of each country and
shall be subject to the good judgment of the authority in turn. This is one of
the ways to obtain a general healthy growth with price stability.
91
the demand in a natural and parallel way since, by persuad-

ing the community towards a situation of full employment
that would consequently induce greater consumption,
growth would be possible in a balanced and healthy way
because the "suppliers" of some products, are —believe it
or not—, at the same time, the main "claimants" of others.
I invite you to analyze its specific functioning already in

practice: if a kind of "Fund" is created that operates as
second-tier banking through the banking system, chan-
neling financial resources at preferential rates —to the
productive sector of proven recoverability, guarantee
and capacity only— any increase in the circulating mass
compensated with a consequent productive increase
could be achieved. This would safeguard —pardon my
insistence, but it is an essential conditioner— the much-
needed equity between "money" and "assets".83
Now, given that the funds channeled through this means

would be granted at preferential rates, the banking sys-
tem itself must become responsible for its total recover-
ability and its proper destination. For purposes of this
fund only, resources should be allocated exclusively to
those who, through adequate study and analysis, have
a proven potential for a subsequent increase in "assets",
demonstrating that they already have available installed
capacity, experience, human capital, moral and economic
solvency, market studies and others.
Otherwise, the traditional bank would be directly re-

sponsible for all those resources that would have been
83
The existence of such a fund does not pretend to avoid all public works,
social services, educational, hospital and many other areas, except that the
characteristics required in terms of investment destination are exclusive to
the aforementioned fund. The wide range of other essential issues mentioned
must be carried out under strict adherence and within a normal and balanced
budget of income and expenditures that every nation must have.
92
Money and wellness
channeled to another line that did not comply with such

requirements. Let us always keep in mind the valid-
ity of that old adage: Given and unsupervised order is
worthless. Therefore, it would be absolutely essential
to supervise, and where appropriate, punish exemplar-
ily all money that would have been directed to another
destination, as would be the case of the resources used to
pay liabilities, public spending, speculative investments,
luxury goods or any other destination not indicated —I
repeat, only in relation to the aforementioned fund—.
Now... At what percentage would the funds described be

channeled towards each particular line of production? It
will of course depend on the percentage "spent" by the
citizens themselves, that is, in the same proportion as
the population allocates its resources such as tourism,
clothing, housing, food, health, recreation, capital goods,
education, transportation and others.
All those areas whose productive growth and recoverabil-

ity are short-term should be given priority, i.e., that these
not only have the guarantee of sufficient recoverability
of their due return in "assets" but also their financial
reimbursement, for which they must demonstrate to the
banking that they effectively have the experience, real
potential and enough installed capacity to do it verifiably.
Let's see the following example: the banking system

—which is ultimately responsible for its correct use—
knows that it must invest a certain percentage —for the
purposes of this specific project— in a certain number of
hotel rooms (in its different socioeconomic strata). As the
bank is in a privileged position to detect not only capable
entrepreneurs, but also has a sufficient guarantee and
proven experience, it can perfectly fulfill the requirement
that any increase in "circulating money" be compensated
with a consequent increase in "assets".
93
Remember that this financial return has not been chan-

neled into a "lost fund," as is the case with many areas
in public spending. When addressed to companies or
individuals with proven efficiency, guarantee and re-
coverability and meeting the agreed return program,
resources will automatically refund and become part of
the same revolving fund, so they will be able to repeat
the same "investment-recovery" cycle in the applicable
productive line.
Something similar must happen with the other produc-

tive lines managed by such fund, and, as stated, just in
the proportions and trends determined by the "citizen's
own consumption".
As for the disposition of resources for the aforemen-

tioned fund, the federal government can issue bonds or
obligations, or any other means determined as the most
convenient source. This same resource would not jeop-
ardize the financial health of any country since such an
increase in "debt" is channeled into a secure increase in
assets, whose return to the productive revolving fund is
practically assured and under the responsibility of the
national banking, depending on the own percentages and
amounts each institution uses from this project.
Given the relevance of the adequate resource manage-

ment of said fund for its due recoverability and the good
result of this policy, an adequate control mechanism,
audits and full surveillance must be implemented before
its creation at all stages of its operation.
This is because the following factors must be ensured: full

guarantee of the fund recoverability, since the fund will
operate as a second-tier bank and through private bank-
ing. Furthermore, as stated, the volume of amount and
conditions to which they are channeled to "productive
94
Money and wellness
investment" shall depend on the employment situation,

production potential and internal and external market
conditions, as well as the growth and equity observed
between the circulating money, and goods and services
produced.
Wow! After all, the proposals of this dreadful author

do not sound so crazy, but then —more than one would
say—, why on earth has not been done despite it does
not sound that bad?
I ask you to wait a little longer in your already longed

for destruction of the book, and in the meantime follow
me now with the next chapter.

95
96
Money and wellness
Chapter 7
Naughty interference
And their negative effects
I'd like to guess your next question, if I may. We have

already seen the potential of the economic and monetary
aspect, as well as its consequent social projection (this
author also thought the same and I hope you don’t accuse
me of mental plagiarism). What the hell has prevented
us from making much more progress on this important
issue?
Before going on with what you surely consider as an-

other of the author's insufferable explanations, let me
tell you something relevant. The last and most significant
advances in economic and monetary matters do not go
beyond eighty or ninety years ago.84 Moreover, I consider
that every sensitive economist today would agree with
most of the explanation above. So, what on earth got in
the way of its applicable implementation?
It may seem illogical, but the practical application of the

implementation and execution of the aforementioned in
the economics field is subject to the public administra-
tion in turn, and to the correct —or sometimes not so
much— political direction.
84
Although there were isolated cases of characters with great common sense as
Martin de Azpilcueta (Spanish, 1492-1586) and Antonio Ortiz Mena (Mexican
1907-2007). Ortiz Mena held the position of Secretary of the Treasury, where
he applied a monetary policy called "stabilizing development", which was noth-
ing more than a variant of what was stated in the previous chapter, although
its application was adapted to the conditions of that time. In a context of an
open economy and with free trade agreements, I believe that its success would
have been even greater.
97
I must say that one of the objectives of writing this book

—no matter how much you insist on burning it— was
precisely to extend the topic to as many of our fellow
citizens as possible. The subject is too important.
However, other doubts arise... How can this disoriented

author say such a thing? Is he implying that a politician
could do something that was not aimed at benefiting the
citizenship? Most of the time —I can assure you that
almost in all the failed cases—, the main character in
charge of the public administration, although it seems
incredible, has tried to benefit the citizenship, but
sometimes he has done it through false routes.85 This
significant fact gives validity to that old but accurate
saying: "The road to hell is paved with good intentions".
Would that be possible?
While recognizing that fortunately there have been very

capable politicians and with great economic sense, oth-
ers have not been so. In order for you to evaluate the
scope of what I now intend to say, let me submit to your
consideration some of the most common ways on how,
sometimes-poor political leadership, has influenced the
economic field.
I am going to present some of these interferences in three

groups only for analysis purposes: a) History examples,
b) Apparent convenience, and c) Misinformation. Are
you with me?
a) History examples. One of the economists capable

of —among other things— stabilizing the currency in
85
I quote a phrase of Milton Friedman that is relevant: "One of the biggest
mistakes is to judge the policies and programs by their intentions, rather
than their results".
98
Money and wellness
Germany after the phenomenal inflationary mess already

described during the twenties of the 20th century (im-
mediately after World War I) was: Hjalmar Schacht.86
Once that phenomenal inflationary conflict was resolved,

and well into the next decade —the thirties— when Ger-
many was under the "political guide" of Adolf Hitler, do
you consider that an economist of his class did not real-
ize that the monumental rearmament ordered by Hitler
would impact in an inflationary rebound with the dreaded
lag between circulating money and assets taking place,
and an abnormal financial and human effort devoted
to the production of weapons, instead of orienting it
towards the great amount of things that the community
consumed? Of course he knew, and whenever he could,
he even told so —in private— to the pathetic character
described.
Now, to highlight the subordination of the economic issue

to politics... Could this outstanding economist in practice
have modified in a single millimeter the obsessive deter-
86
Many reproached Hjalmar Schacht (1877-1970) for having been Secretary of
Economy under the Nazi regime from 1934 to 1937. At the author's discretion,
this economist was also influenced in some way —emotionally speaking— by
the errors and revanchist perspective of the treaties of Versailles, Trianon and
others signed in France after World War I, which implicitly involved a socio-
logical conception that must be overcome. An evidence of this, as we will see
immediately, is that the treaties sowed the seed that unleashed, as many analysts
pointed out at the time, World War II. It is worth mentioning in his defense
—apart from the fact that the analysis presented here is only related to his
performance as an economist— that he never voluntarily joined the Nazi party
(although he was named an "honorary member", trying to have him on their
side). This character was in total disagreement with anti-Semitic politics, and
above all, with the monumental expenditure of military rearmament, a factor
that led to his dismissal in 1937. However, in order to agree with the regime
and its great capacity, they held him as adviser in the Secretariat of Economy
and the Reichsbank until 1943. He was accused by the Nazis of being involved
in the attack on Hitler in 1944, so he was kept locked in a concentration camp
until the end of the war.
99
mination that this ominous dictator had pre-established?

I doubt that he could have been able to made public the
slightest observation.
Many similar cases expose this economic subordina-

tion to the political leadership in turn. One of the most
prominent economists and experts on the monetary is-
sue was none other than Milton Friedman, who had the
privileged opportunity of advising several Presidents of
United States.
Let me ask you an important question, dear reader. Taking

into consideration that one of the presidents Friedman
had the opportunity to advise was nothing less than Rich-
ard Nixon... Do you consider that this expert in economic
matters did not fully realize that, say the Vietnam War
—irrespective of its moral validity—, was consuming a
huge amount of financial and human resources, which
undoubtedly altered the crucial balance between "circu-
lating money" and "assets", and put at risk the country’s
good economic performance?87
Do not doubt for a second that he knew it perfectly, but

this remarkable economist was subject to certain geopo-
litical guidelines, whether these were right or not.
Since we are talking about the issue, and as a passing

comment regarding the moral validity of that war —since
many will assure that we were in the middle of the cold
war, and "the communist advance should be stopped in
87
It is no coincidence that just early in the 1970s —in the middle of the Vietnam
War—, began an already chronic negative trade balance of the United States.
This resulted in their growing and understandable indebtedness, due to the
fact that an abnormal amount of human and financial resources was used in
an unusual war effort, which was deducted from the normal productivity of
goods and services. https:// es.actualitix.com/pais/usa/estados-unidos-balanza-
comercial-dolares.php
100
Money and wellness
any way"— in my opinion, human beings often follow

complicated and sometimes even immoral routes without
first exhausting our capacity for dialogue and having used
in a wise, constructive and correct way the transforming
capacity of true dialectics.88
In spite of taking the risk of considering that the author

is out of his mind, I will share with you an experience,
as I think it is appropriate …
When I had the opportunity to write my first book,89 I

had the following conversation with one of the directors
of the publishing house:90
“Tocayo” (TN)* that’s how I called the executive— let

me go to Central America as if I were a salesman or col-
laborator of your company to promote this book since
the Cuban "revolution" (beginning of the eighties) has
just been transplanted in Nicaragua and is threatening
to extend to the entire Central American area…
* TN Tocayo — Informal and friendly term used when two or more individuals
share the same first name.
88
One of the meanings of this important science is the good use of argumentation
in which the purpose is to improve social evolution and human development
using the contribution of opposing ideas or forces. For a better performance,
however, it is necessary to adopt a philosophical and humanistic position more
in line with reality, as I will try to describe in some of the following pages.
89
El Sistema que sigue —¿comunismo o capitalismo?—, Editorial EDAMEX (1984)
ISBN 968-409-030-7.
90
José Manuel Colmenares Grünberger (deputy director) played a very promi-
nent and invaluable role in Editorial EDAMEX. Do not think that the author
was out of his mind. I only felt to a certain extent involved in that ideologi-
cal process, since, in my remote youth, I granted viability to the "socialist"
position. However, this situation was modified by analyzing the subject more
thoroughly (both in theory and in its practical application), which made me
feel empathy for those who saw this as a viable alternative and I considered
that the solution was not to kill them, but just let them see what a system like
this really meant for citizens.
101
—Sure—, he replied. —I wish all our authors did the same

thing with their work, but… Why are you doing it?
—The solution—, I insisted —is not to kill them, as some

people want, even implying the “contras”, but to show
them the truth at economic, sociological and philosophi-
cal level. Marxist theses are not anywhere near the solu-
tion. They are going to cause further damage... and on
top of that, they will lose their freedom.91
—Remember Juan Manuel—, he said — that the world is

likely to go right in that direction.
—That system is so badly structured in every way—, I

kept saying —that it is going to break down from within.
Believe me. The only ones who still believe in this are
those who have not experienced it, as it happens in Latin
America.
I had the opportunity to distribute the book throughout

Central America,92 and I fortunately continued to pub-
lish books in that publishing house. Ten years of this
conversation had not elapsed, when Russia and China
corrected the course. Months later, this same executive
telephoned me. I almost did not remember what we had
talked about at the time.…
—I’ve been remembering what you once told me, To-

cayo—, he said —the cold war prospect changed com-
pletely…
91
I would like to quote another phrase from Milton Friedman on freedom: “A
society that puts equality before freedom will get neither. A society that puts freedom
before equality will get a high degree of both”.
92
Except Nicaragua —as you will understand—, as it happens in these cases,
the only prevailing truth is theirs. The rest are mere imperialist plots.
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Money and wellness
What is the intention of this anecdote? Now that I have

mentioned the case of the Vietnam War, it made me
think... How many times in history have we experienced
the "imperative need" to forcefully impose our own
truths, causing countless deaths and wasting tons of re-
sources we required in other basic needs?
I believe that something we have lacked —and still need—

is that, rather than seeking to "win", we must pretend to
"convince" or, if the case, that others persuade us about
a certain point of view.93
However we were talking about the subordination of

the economic aspect to politics.94 In addition, I promised
not to describe the multiple cases in a little over more
than 1440 hard going pages of The Capital where it is
obvious that those responsible —in their different levels
and times— of the economic issue was always subject to
a —good or bad— political leadership. But let's now look
at another type of no less harmful interference:
b) Apparent convenience. Is it possible that the interest

of a certain politician does not agree with the community
93
There is a wise English quote: “When you have a hammer in your hand,
everything around starts looking like a nail”. And I would add: that is not
the worst. We often forget that before carrying hammers, we were endowed
with mouth to express our arguments, ears to listen to those of our peers, and
even more, brain to choose the best option. The hammer, my dear and patient
reader, is nothing but a contrived element appropriate for a limited group of
activities, and not suitable for dealing with rational individuals. It is true that
some wars were —unfortunately— almost inevitable and a mere response to an
aggression (as in the World War II, while evaluating the events that influenced
in it). However, the Vietnam, Iraq and many others wars were just the product
of the irrationality and sociological limitation that has always characterized us.
94
It should be noted precisely why, in order to avoid economic dependence on
the political aspect, it has tried to minimize itself in many countries, granting
the Central Bank's management autonomy. However, in practice, a certain
interference of the political element on the economic issue cannot be com-
pletely avoided, especially in those countries with a more fragile institutional
framework…
103
interest? In the end —as we will see right away — all hu-
man interest in the world is hopelessly associated with
the rest. Let’s analyze these aspects.
As we will see, the problem arises from the fact that an

individual misunderstands or does not fully perceive the
process of social interrelation, which is extremely com-
mon, and therefore, decides to mess around. However,
such a procedure will not only harm others, but the dam-
age it generates shall return to him/herself.
Wow! How could that be? To illustrate it better, I will tell

you another one of my experiences.
Not many years ago, someone was kind enough —or

had the misfortune— of inviting me to a Forum on Agri-
cultural Productivity, an issue that interests me greatly,
which is why I accepted immediately…
Before the event began, attended by some legislators,

several specialists in the field, officials and former em-
ployees of the agricultural sector, I approached one of
the organizers and asked:
—Can I speak without any restrictions?
—Sure—, he replied convinced—, that’s why we invited you.
After listening very carefully to the other interesting pre-

sentations that, for the most part, highlighted the "great
importance" of the topic, it soon came my turn to speak.
Gentlemen —I said—, the relative lower95 productivity

that we have in some lines, as in the case of corn, not
95
Glossary: "Relative productivity" is the productivity associated or interrelated
to that of other countries, mainly those with whom we trade.
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Money and wellness
only makes us more vulnerable and dependent from

abroad, but also produces an unnecessary leakage of
foreign currency and even certain health problems. And
guess what? The fault is not on the population, but ours.
Let me explain you why I consider it so…
—We are making a serious mistake with the granting of

subsidies to the field— I continued. I feel that although
it is essential to support our fellow farmers, and even in
a greater way, it should not be through subsidies, since
we currently grant such support in a generalized way
without associating them with the productivity levels
that each one obtains.
—I will refer specifically — I continued while observing

the surprised glance of some — to the case of the corn. We
have an average productivity close to 2.9 tons per hectare,
while our northern neighbors, whom with we trade most
of the product, is almost 3-fold, with around 9 tons per
hectare. That is why many of our farmers complain that
the price "from abroad" is lower than ours, even though
they have a more expensive workforce. The worst thing
is that the leaders of our fellow farmers do not explain
to them the true cause of this contrast:
The origin of this more competitive price is because

our neighbor’s productivity is much higher, which al-
lows them to commercialize in the international market
at more accessible prices. But, why is the productivity
higher, if even the climatic conditions here are much
better and the price of labor (I insist) is lower?
—It is true that there is a partial influence on the sig-

nificantly lower production of smallholding, I continued,
especially for the type of crop that has a lower incidence
of labor than vegetables. But one of the main culprits of
this phenomenon is the generalized and politicized form
in the granting of subsidies.
105
— Further support to farmers is essential —I empha-

sized—, but subsidy should be conditioned to a certain
minimum, although growing, productivity depending on
their effort, and starting at least from 5 tons per hectare.
Otherwise, we not only cause them damage, but the en-
tire country as well.
—Let me give you an example,96 I continued. Imagine

that the owner of a business97 pretends to be very large—
hearted to his staff and decides to pay the salary to his
collaborators, regardless of whether they go to work or
not. What do you imagine that shall happen? Exactly. That
business shall start to have every day less staff, while
piling up the number of complaining customers, until its
bankruptcy... Don’t you think? Well, I have bad news for
you. The country is no more than a simple sum of all,
and if individualities are unproductive, you just have to
add them all and that's how simple the result shall be.
—We have to find a way to grant them through an agile

system —I continued— even with a little more resources
than now, but only to hard-working and efficient produc-
ers. But let's see what we caused in the practice. I know
many janitors, masons, painters and others workers who
carry out other activities in the cities, but they have one,
two or three hectares of land in rural areas and their
main purpose is to continue receiving subsidy from the
support program, without them caring the least if their
96
Idle clarification: this unfortunate author has the habit (in case you have not
noticed) to include examples of his nonsense. I only trust that the ocular wear
derived from the excess of reading, does not derive in a judicial demand on
the part of some annoyed reader.
97
I’m not referring to any “John Doe” for their sake and mine… just in case
they are after me already, with a stone in hand for mentioning them in such
a disrespectful book.
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Money and wellness
harvest is miserable and pitiful. Probably the fault is not

theirs, but ours…
— If we could raise—, I kept on saying —the average

productivity per hectare to five tons or more,98 do the
math. Not only do we not need to import corn, but we
could export surplus as well …
— The current system—, I added —of generalized granting

of subsidies, is not only a serious impact to the country’s
economy, but to health as well. Creole white corn (our
corn) has lower carbohydrate content and is more appro-
priate for human consumption. Yellow corn genetically
modified is preferred abroad by its specific components,
and its greater potential to fatten livestock. It should be
noted that this is also why, when foreign manufacturers
process corn, they obtain a higher amount of fructose.99
Local and foreign sweetened beverage and food manu-
facturers almost always prefer fructose to sucrose, since
98
The author had the opportunity to keep the books for years in an irrigation
ranch where productivity was sometimes obtained (in corn) up to 25 percent
higher than the average of our neighbors in the North. We meticulously looked
after the proportion and content of soil nutrients, pH, timely irrigation, im-
mediate attention to all types of opportunistic plagues, and use of quality seed
among other things. The relationship of the agricultural land in Mexico and
the US of "irrigation and rough weather" is not very different. There is a ratio
close to one of irrigation per four of rough weather in both countries. Source:
In Mexico: INEGI; National Agricultural Survey 2014; In U.S.A.: https://
en.wikipedia.org/wiki/List_of_countries_by_irrigated_land_area and https://
en.wikipedia.org/wiki/Land_use_statistics_by_country
99
Fructose, despite its “sweet” name (high fructose corn syrup or HFCS), in its
refined process causes a long series of chronic-degenerative conditions such as
diabetes, hypertension, heart disease, kidney, digestive and eye disorders. Many
soft drinks and processed sweetened products are fructose added. For more
information on the subject, you can find the book of this same author in: El
futuro Chatarra by Dr. Gustavo Cruz Santiago and Juan Manuel Ochoa Torres,
SOCIEDAD MEXICANA DE GEOGRAFÍA Y ESTADÍSTICA, A.C. Available for
download in www.juanmanuelochoat.blogspot.com Sucrose (common sugar)
is harmful to health, but fructose is worse.
107
it has a greater sweetening potential despite causing

more damage and being an influence in a decisive way in
the genealogy of many chronic-degenerative diseases.100
However, it generates more utility.
Once I finished my speech, a period for questions and an-

swers started immediately. I must confess that I thought
I’d receive an overwhelming number of objections but,
surprisingly, everyone agreed with me.
I only trust now that you are not going to ask me if

anything was done about it, since I will let you down,
because nothing was done in that regard.101
Do not ask me the reason either since I would have to

answer, “I think —from my particular perspective— that
someone considered it ‘politically unfeasible’”, i.e., modi-
fying such a scheme was not advisable, that simple.102
Political favoring would be lost.
That is precisely what I mean when I consider that an

undue and ill-focused personal political expediency is
nothing more than a mere interference in the economic
process. Imagine for a second that the person in charge
of economic issues poses his political leader the need to
100
If you want to know why chronic-degenerative diseases due to poor dieting
have become the number one health problem —and its effects— in the world,
I invite you to download the aforementioned book: El futuro chatarra by Dr.
Gustavo Cruz Santiago y Juan Manuel Ochoa Torres, SOCIEDAD MEXICANA
DE GEOGRAFÍA Y ESTADÍSTICA, A.C., in the same website.
101
In no way do I pretend to hold the event organizers responsible. They acted
in a professional manner and with excellent goodwill, and surely the political
decision (or lack of it) was made elsewhere. However, from my own perspec-
tive, it just faded away in the —often— complex bureaucratic mechanism.
102
Any populist politician will tend to not modify a scheme like the one
described since they want to be considered as extraordinary and incredibly
generous human beings, although in practice, they know (I hope) that they do
more harm and provide less benefit.
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Money and wellness
condition the support granting to the agricultural and

forestry sectors —even if it meant higher support— de-
pending on the productivity achieved by each one.
Should the support in forestry were conditioned depend-

ing on the number of surviving trees per farm, could a
leader accept it if perhaps he won the election due to the
large number of gifts he offered in order to win. Would
you, therefore, consider that this would be a case of un-
fortunate political "interference" in the economic process
that seeks to provide generalized wellness?
Let us imagine now the case of a president from a de-

veloped country —where these cases also occur, but to a
lesser extent—, who would have carried out his campaign
on inaccurate or incomplete postulates.
Still with the previous case, imagine that in the office of

this country’s leader, suddenly one of the most impor-
tant external counselors has the audacity to make his
president see that the high illegal migration that country
receives is not a mere and simple consequence of another
problem, whose genealogy has deliberately ignored such
administration.
This counselor, in a gesture of great political temerity and

knowing that the head of the nation may not like what
he says and may fire him, makes him see very politely
that his immigration position is incorrect since that phe-
nomenon is not but a simple effect of the demographic
question that he has decided to ignore.
The counselor tells him that in most of the underdevel-

oped world, the rate of population growth is still a little
higher than normal. As a result, the population-doubling
period in many of these countries is between 25 and 45
years. This timeframe is too short to allow them to double
109
all infrastructure required in key areas such as educa-

tion, employment, drinking water, drainage, housing,
law enforcement, conveying values, among others. The
deficit accrued over decades cannot be reduced during
this period and part of the infrastructure exceeding its
useful life can not be replaced, which in turn, shall gen-
erate unnoticed the following:*
—Look, Mr. President —he says respectfully— when these

countries face a wide range of unmet needs (in addition,
these deficiencies are perniciously interrelated), not only
do serious deficiencies occur, but it also causes more vio-
lence, generates social unrest towards the government in
turn, drives away the investment required, and to top it
all, it also has an impact on us. Furthermore, it is reason-
able to assume that certain percentage of its population
would try to emigrate.
—And let me remind you, sir— he continued —a certain

number of legal immigrants could help us in many key
productive tasks. However, you know that if this flow is
illegal and exceeds certain limits and to top it off, it is
about people without the proper educational and civic
training, this will generate problems.
In this imaginary and almost unthinkable scenario, it is

likely that the political leader of that developed country
has not had the slightest idea of the different approach
that this external adviser is now proposing. However, he
is acknowledging that he never was interested enough
to investigate on the subject because he was busy in his
personal business.
* If any of the readers wish to be tormented further by this irreverent book, I

recommend reading the appendix.
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Money and wellness
And, however much he internally and partially accepts

what has just been posed to him, the leader reconsiders a
little his previous position on the subject and understands
better that interpreting many deficiencies of underde-
veloped countries as mere governmental inefficiency, in
fact, could be largely due to what he has just heard. He
quietly acknowledges that migration could be only one of
the consequences, although the issue bothers him since
the perspective he maintained throughout his life cannot
be modified all of a sudden.
But what this important politician did not expect is that

this daring external consultant is not finished yet. He
goes on saying in the most polite way that the animos-
ity to migration that he has laid out before the citizens
is badly focused. If the leader accepts that it is another
external manifestation or negative effect of the referred
socio-demographic mismatch, he should take into consid-
eration that at the beginning of his mandate he canceled
all kinds of information programs in developing coun-
tries. This would have contributed to what the country
now is going through, which at a certain moment —he
emphasizes— citizens will realize. This would affect him
personally in a very negative way.
Such an approach increasingly displeases the president,

although he decides at the moment not to throw him
out from his office because he wants to see how far his
daring comes.
Therefore, since the counselor suspects that his advisory

work will end soon and given that he knows in his own
heart that he must say things by his name and following
his own conviction, takes advantage of that brief period
and continues:
—If you actually build a wall —he continues before the

astonished gaze of his boss—, that will not only become
111
a costly, anti-ecological and useless monument to irra-

tionality, but something worse. At the time, most of the
people will realize that problems are only solved when
causes originating them are met, and not only when at-
tention is given to the effects they produce.…
—Therefore —he continues— the wisest thing related

to migration would be to promote the dissemination of
clear, understandable and well-founded messages that
make the entire world and the underdeveloped countries
see the scope and the enormous real socio-economic
impact that would have a more balanced and manage-
able demographic profile on themselves and the global
environment.
—The world population, Mr. President, —he adds— is

capable of reacting adequately, but only when duly in-
formed. If we do not help in that sense, we are only play-
ing the game of the opposing ultraconservative groups, for
the simple reason that they have not bothered to analyze
in depth the matter and, I assure you, the consequences
shall be disastrous for all.…
—Something very similar —diplomatically added while

being allowed to speak— will happen with drugs. The
idea of solving this very serious problem with walls is
ridiculous. Even if we made ten walls on all four sides,
as long as consumption continued, I can assure you that
drugs will continue to be produced, maybe even syntheti-
cally but from within our own territory.
—The only alternative —continues this insistent but

imaginary counselor— to end that terrible problem would
be to get to the bottom of the matter and the strategy has
to be another. Let's not forget —he insists— that we are
facing an extremely serious and widespread addiction in
certain sectors of the community, but our great people
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Money and wellness
have been able to react and emerge victorious from worse

problems. I am convinced that you shall also be success-
ful in this, as long as we focus on the true origin of the
problem, and not only on its external manifestations:
production and trafficking, but rather, on consumption,
and on the psychosocial causes acting.
When the president of this fictitious scene was about to

request the support of the security personnel to remove
him from the premises, this clever counselor takes ad-
vantage of his last moments and goes on:
—We could only succeed in this Mr. President speaking

to our people not so much with simplistic or apparently
easy solutions. As much as they are profitable from an
electoral point of view, believe me, our community is
perfectly capable of reacting in an extraordinary way if
spoken to with the truth clearly explaining the risks we
face and their terrible consequences. That could end con-
sumption, which is the real problem in the background.
—Therefore, —he continues—, I suggest to improve more

the strategy and support us in the media, schools, par-
ents, all kinds of organizations, experts and to show the
importance of retaking the values that made our nation
great. The rest are palliatives that will only make us lose
more valuable time. The people, my dear sir, are capable
of reacting in a way that you cannot imagine. On the
contrary, if they realize later, as I think it will happen, of
the bad management at the time of the matter will have
adverse political results.
When this daring counselor observes that his now former

boss presses a button to escort him to the main door, he
decides to leave by himself. Moments later, in this imagi-
nary scenario, the hypothetical leader could not help but
think in his chair:
113
—What if this guy was right? —he wondered thoughtful—

but, all my campaign, strategy and political project went
in another direction... Would it be worth modifying it?
Although in such a case... What would think the sector
supporting me? And then... How would the ultraconser-
vative groups that followed me react if I told them now
that we must once again promote population stabilization
campaigns for the benefit of the entire planet, and that
global warming is a reality?
—Although —he meditates— perhaps my advantages,

such as the tax modification, could increase productivity
and employment, which would minimize other things...
Anyway, I think I need to talk to my personal advisors.
They are clever and agree with me on everything, not
like this guy who just left.
Do you consider it possible to have such an unrealistic

scenario as the one described, dear reader? And if such
a situation is feasible, since we are letting the imagina-
tion fly... Could a leader rectify his strategy? I doubt it,
because it would simply not be convenient from a limited
political perspective.
Now, and only for the purpose of analyzing possible "in-

terferences", derived in turn from supposed conveniences
or even personal errors... Would they influence, if any, in
a negative way in a certain economic direction? I think
the answer is obvious. Don’t you think?
But let's stop imagining things, and return to this earthly

world, before one of the already so tormented readers re-
quests the admission of the author in a psychiatric center.
So already in the field of reality, we could have another ques-

tion. Could this type of "interference" be associated with
another sociological element? I ask you to judge for yourself:
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Money and wellness
c) Misinformation. As if the above were not enough, the

element that I will describe below also impacts in a very
special way all good economic performance.
If a sociologist or supposed philosopher has a false per-

spective, could it influence the economic field since this
would affect on the way some react?
Before going further into the topic, let me give you a bit
of background:
It may seem incredible to you, but there are a certain

number of leaders who, even today, believe blindly —
although they do not recognize it openly—, in the valid-
ity of Marx’s 19th century seductive postulates already
described.
Although Marx was considered by himself and by others

as a leading economist, sociologist and philosopher, from
my modest point of view he was simply somewhat out of
touch with reality. Goodness gracious! To top it all, this
author is not only dismal but also disrespectful, right?
Let me describe why I consider it so…
First of all, from an economic perspective, this restless

gentleman hinted that a citizen seeking his interest was
only the product of an incorrect procedure originated by
a “selfish” feeling and, as a consequence, of an artificial
system created for the exploitation of some human be-
ings from others. I really regret not having been Marx’s
contemporary, since I believe I could have shown him
that reality is quite different.
As I already indicated, Nature, in an incredibly wise

way, deliberately endowed all process considered vital,
not only within the human performance but also in the
environment of the animated world that surrounds us,
115
with certain kind of primary “stimulus” (self-interest), so

those following it shall generate without even realizing in
an invisible and automatic manner, a secondary objective,
which is almost always the really important stimulus.
The above is appreciated not only in the economic and

human aspect, as I mentioned in previous chapters, but
even in Nature itself:
What do you imagine that induces a tree to grow up?

Let Marx excuse us but what drives a tree upwards is
its “selfish” and primary interest103 in order to get more
solar energy to better develop photosynthesis, for which
it extends its trunk and branches upwards and sideways.
This process lets the tree achieve its “primary purpose”
(please observe the way trees, when around others of their
kind, grow even more but mainly upwards, since they feel
like they are in some competition with those who are at
their side, and all of them shall have a longer stem). But
that apparent “selfish” interest of the tree, which Karl
Marx was so worried about, generates another secondary
and invisible benefit: it develops in addition many basic
consistent objectives, which even humans and ecology
could not go on without.
103
It should be noted that there will be plenty of people saying that the tree
components and all its tiny parts “do not think” or decide, since they do not have
a brain. Although in the strict sense they are right, I consider that in countless
aspects of the animated world that surrounds us, their cells have some form
not yet fully known that “make decisions” on certain things. I invite you to do
the following experiment: plant a small tree too close to a large one. Do you
know how the small tree will “decide” to develop? It shall grow completely on
its side and twisted, trying to avoid the “shadow” of the greater, and moving
its growth towards the sunniest area despite its trunk growing inclined and
unstable, even with a certain risk of falling. The outstanding thing about such
process is that something inside it made it act like this, and to have gone after
the sun. It seems sometimes that we are the ones who do not take advantage
of the brain we treasure so much.
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Money and wellness
What keeps bees working so busy? Will they follow a

kind of mysterious secret or invisible protocol pointing
out the importance of pollination? I am sorry to say that
it was not like that, they act so because they are behind
that same “selfish” primary objective: their nutrition and
the subsequent storage of surpluses of a series of sugars
vital for their survival.
However, without even realizing that with their perfor-

mance they get something much more important and
crucial for Nature: they realize that secondary objective,
which is nothing less than pollination. And so, I could
go on with countless of similar cases.
Some will surely say, but the author forgets the search for
human equality! So I add something that, at first glance,
might seem illogical: if we seek equality as a primary
objective, everything breaks down. What? How can you
dare to say such a thing?
Do you know what would happen without a certain in-

equality in everything that surrounds us in the Universe?
Nothing would work, that’s the way things are…
For example, when we take a shower in the morning,

do you know what makes the water come out? It is a
kind of “inequality” between the pressure of the water
tank on the roof of your house and that small object that
threw the water on your body. Had a brilliant plumber or
“equalizer” technician worked in your house, like witty
Marx, you would have had no shower since, when turn-
ing the key, only three drops would have dropped (which
I imagine would not have been enough, unless you are
an extraordinary economizer of that vital liquid). Why?
Because the nice “equalizer” plumber left the pressures
equal and so, I assure you, the water will never run
through the pipeline.
117
Believe it or not, what makes rainfall is also the product

of a long series of inequalities. First, the heat and pressure
differentials evaporate the ocean water; other physical
disparities such as the movement of the wind, rotation
of the planet, bring the clouds. Finally, phenomena of
electrical type, pressure and temperature are responsible
for making that vital liquid fall.
Should there were absolute equality in our community,

everything would paralyze... Do you know what makes
the taxi driver you know take you to your destination?
There is an invisible “inequality” not only in terms of
your activities, professions, abilities, time and many other
things, but also between the content of your wallet with
his, which this fellow taxi driver will seek to partially
compensate by providing the service.
Imagine (hopefully that’s the case) that this efficient

fellow citizen and your friend wins the lottery jackpot,
and suddenly becomes an immensely rich character. The
day after collecting his prize, would he take you back to
your destination? I don’t think so. The “inequality” as it
was, disappeared, and it is already in another direction.
Perhaps, using that same though different “inequality”, it
would be him —as you already know him and you were
his client and friend for years— who asks advice for his
investment. And guess what? Maybe you would agree to
help him, using the same current differential between
the resources, experience, knowledge of that former taxi
driver friend and you. Strange, is it not?
Look what this reckless author is saying! So you claim that

equality should not be sought? Of course it is imperative
to pursue it always! But on the right track: looking for a
partnership with equal opportunities.
However, it is essential to see things from the perspec-

tive of reality: Poverty is not a cause in itself, but a mere
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Money and wellness
effect or consequence of other things, such as lack of

education or training, inadequate attitude, incorrect use
of available resources —often time itself—, lack of family
planning, unfavorable economic environment, among
others. Undoubtedly, what we should try to modify with
the greatest effort of which we are capable are the real
causes.
Now, we should not be surprised that many politicians,

due to their limited vision —especially those that we
could classify as populist, of which we will find more in
the developing countries—, attack incorrectly the effect,
leaving almost intact the causes that are actually those
generating serious socio-economic problems.
Now, my patient reader, let’s move on to the already

mentioned sociological or philosophical aspect, which
will be hopelessly interrelated in all kinds of human
actions. Is it true that, as some say, human interests are
in some way opposed, and actually there is a kind of
dissociation, confrontation or “class struggle”? From the
author’s perspective, such a posture is only the product
of a completely superficial, limited and, we could say, a
bit childish perception, but without pretending to blame
the authors who have been its victims.
What do I mean? There have been countless authors in

the sociological, and even “philosophical” (very trivial, in
my opinion) fields taking for granted that there are two
kinds of interests in all kinds of human interrelation.
One of them is the “rational” interest (which is paral-
lel, like father and son, or husband-wife). In contrast,
the “irrational” interests are in some way confronted,
“contrary” or opposed (as would be those of an employer
and a worker, or a citizen of any society with those of
another neighboring or distant country). To what extent
is this true?
119
Basically, all individuals and nations are subject to “ratio-

nal” interests —following that same terminology— and go
perfectly and absolutely hand in hand with each other,
although the significant fact of not having perceived it
that way, does not mean that this mechanism has not
always operated. The only thing that happened was that
our so superficial and limited judgment —sociological
in this case— prevented us from visualizing it correctly
and completely.
This in turn generated all this phenomenal mutual and

self-inflicted harm that we have caused each other, ex-
traordinarily limiting the universal and generalized devel-
opment in a fierce and shameful way for the human race.
Damn! Will this clueless author who has so tormented
us with his theories be somewhat right?
One more thing: that small and poor human sociologi-

cal and philosophical vision made us not even realize
something very serious. Most of our congeners return to
the land with their potential almost intact and without
exploiting, mostly as a consequence of this seemingly
inoffensive, although erroneous, sociological and philo-
sophical approach. I do not go on about this subject be-
cause the present book is of economic nature.104
However, I cannot avoid this three examples that I think

it will clarify what I intend to say:
Assad had always been a citizen like so many from an

Arab country. Unfortunately, due to the very negative
104
In another book by this author called Violencia o desarrollo you can appreci-
ate in a slightly broader way what I mean. The book can be downloaded from
www.juanmanuelochoat.blogspot.com
In its second part, where the subject “sociology” is referred to, you will be
able to appreciate more extensively what I mean, including more examples.
120
Money and wellness
influence of a fanatical and violent group, he believed

that it was almost his duty to cover his body with explo-
sives and blow himself up in a crowded European mall.
That group had convinced him that (you would not be-
lieve) such action would not only give Assad immediate
access to a lovely heavenly place, but they also assured
him that it would punish righteously those who should
be considered “enemies” of his own people and beliefs.
Unfortunately, although Assad carried out his purpose,

the real consequences of his action produced effects very
different from those he thought, which did not agree at
all with what he had been assured.
Far from having only harmed an “enemy”, the damage

caused by Assad included a small decrease in the Euro-
pean productive capacity. This in turn slightly reduced
the potential for purchase, employment and tourism in
that area, which —he never imagined— had a certain
impact also on his place of origin, since it diminished
although imperceptibly the number of visitors, the ability
to acquire products made in his homeland and, to top it
off, the possibility of receiving other fellow immigrants,
among many other effects that affected his country,
friends, family and descendants.
In the dimension where Assad is now —although noth-

ing can he do about it— he discovered horrified —and
too late— a completely different reality: the God of his
group, of Christians, Hebrews, Hindus and absolutely
all inhabitants in the planet and the Universe is exactly
the same. He has just realized, to his surprise, that this
Supreme Being never wanted such acts to take place.
Assad has also just learned that, in the dimension he

left, not only did he harm the Europeans, and foolishly
121
took away lives of innocent people, some of whom were

even sympathetic to Assad’s nation. But the worst part is
that the damage shall return in very different ways. Now
that he learned late of another reality, he understands
with deep anguish that he was only a victim of the same
coarse deception in which humans have always fallen.
The following example is about two entrepreneurs I met

in my professional life. Businessman “A” tried to give
back to his collaborators as little as possible, he never
thought about training them, he did not take good care
of the quality, and he always tried to fool everyone as
much as he could.
On the other hand, Businessman “B” acted exactly the

other way around. He always sought to reward his staff
in the best possible way, implemented an ingenious series
of incentives to those who had a better job performance,
trained his staff, kept up with market and technical stud-
ies to adapt to the public demand, and took care that their
products were at the forefront in terms of quality, as well
as an often changing citizen preference.
I bet you can imagine the different results they both

had. The first one not only had a high and counterpro-
ductive rotation of personnel due to the working condi-
tions offered. The quality in their products (shoes) was
decreasing to the extent that many shoe stores rejected
them because of the continuous complaints of customers,
causing a delay in payments to suppliers, until it disap-
peared from the market.
In the case of this Businessman “A”, under a broader

social context... did he only hurt himself? Of course not,
in addition to the immediate self-infliction in the first
instance, the damage impacted his employees, custom-
ers, family, suppliers and descendants. Furthermore, a
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Money and wellness
secondary —invisible— action occurred that he did not

even notice:
Businessman “A” contributed in a small proportion to the

decrease in his community’s productivity, even if only
in a very small proportion, diminishing thus the great
total of goods and services. This in turn even impacted
a very small percentage —although he did not know—,
in the economy progress of his country, collective image
and other things he complained about his community.
He never imagined that the great total produced in his
country, is nothing but a mere result of everyone’s acts.
In the case of Businessman “B” the exact opposite hap-

pened, which resulted in something completely differ-
ent. His collaborators, customers, suppliers, family, and
many others received several favorable effects, reaching
even in a tiny proportion their descendants. Do you
consider possible, dear reader — as some argue — that
human interests are somehow dissociated, confronted,
or in a permanent “struggle”? A way of interpreting this
social interrelation, as I was saying, is only a product of
extreme superficiality, and the worst thing is that many
still have this idea.
I could suggest something similar in every type of hu-

man act: in the father-son relationship, husband-wife,
employer-worker, teacher-student, political-citizen leader,
producer-consumer and in as many social relationship
comes to mind. You would see in them, for better or
worse, the way the smallest or largest action will be hope-
lessly projected not only towards others, but it will return
as well to the issuer. I assure you there is no way to act
on the planet that a person can avoid an effect on others,
which brings on consequences in many different ways.
I won’t go beyond, but, since I love to distress the reader

with as much as I can, this is one more —sorry— example,
123
which is a nonexistent though illustrative case of anthro-

pomorphic type:105
A gentleman —hypothetically speaking— is walking down

the street when suddenly, without him even noticing,
some of the billions of cells in his body said to have made
an amazing discovery:
These cells assured that they belonged to the muscle tis-

sue and were victims of an irrational exploitation. Stating
very convinced pretending erudition and certainty in
what they said, they had carried out a deep “scientific”
study on the cellular interrelation. According to them, this
study showed that, since they were the ones mobilizing
the body, they would therefore take total control over the
organism because they were the only ones working.106
Moreover, to top it off, they said indignantly, the distribu-
tion of blood, nutrients and oxygen was uneven, as there
were parts such as the brain, eyes, lungs, heart, spleen,
kidneys and others, which received a higher percentage
of these crucial elements.
Their determination and conviction was such that they

soon issued a manifesto, with the following final motto,
“Unite fellow comrades, you have nothing else to lose
than your chains”, which called the attention of many.
105
Glossary: Anthropomorphic means "related to the human being". I use
this type of examples only for didactic purposes, since as someone could tell
me cells have no capacity to make decisions. However, we can deduce —as I
said— that they have (an element that has not yet been studied enough) some
kind of action guideline that, over the years, we will get to know.
106
Muscle tissues is part of the human body in about 40 percent of its mass.
Different types of cells specialize, among other things, in “contractile” type
activities, which means that many of them have an elongated, significant shape
that allows us to move. This tissue is strategically distributed and integrated
into several parts of the organism of living beings belonging to the animal
kingdom. Anatomía humana, Alfredo Ruiz Liard and Michel Latarjet, Editorial
Médica Panamericana.
124
Money and wellness
In their supposed phenomenal discovery, they did not

consider that in fact all parts of the body work in differ-
ent ways and that the wellbeing or discomfort of all its
parts is inevitably associated with the rest of the organ-
ism. Furthermore, the fact of trying to dissociate or face
the interest of some cells against others through the “cell
class struggle” was a huge blunder. In addition, those
who did not share that “revolutionary” vision said that
while it seemed that muscle tissue was the largest volume
good or poor performance of any of the parts will have
a palpable impact on the rest, which they can ascertain.
That supposedly innovative and witty group of cells in-

sisted that the organism was divided into many parts, in
this case those belonging to the muscle tissue of the left
forearm. Therefore, they said, it highlighted that there
were “insurmountable differences” between them, and
that, since they all had unique different characteristics
like those from the eyes, nerves, blood, bones and others,
it was essential to be respectful of each one’s use. Divi-
sions, barriers and autonomies should be established all
throughout the body.
The most expert cells had a completely opposite view.

These cells claimed that they actually were part of an
indivisible whole that should be kept integrated, since it
is the only way they could make a common front against
all kinds of adversities, otherwise the body survival would
be at stake. They emphasized that they all had the same
origin because they were the result of the chromosome
integration of only two haploid cells107 —spermatozoon
107
Haploid cell is the one that only has half of the chromosomes (in higher
organisms such as mammals) as it happens with the male sperm and the female
ovum. The human conception is achieved precisely by the integration of both
cells and the subsequent integration of the two sets of chromosomes of each
of them. The rest of the cells (also called diploids) of a higher organism usually
already have two sets of chromosomes (that is, 46). Embriología Médica con
orientación clínica, Sandler and Lagman, Editorial Panamericana.
125
and ovule— and that, if they had been divided later into
very different functions, it was only to specialize in dif-
ferent areas, for it is the only possible way to optimize
the efficiency of the whole.
But cells that considered themselves as great reformers

completely rejected such position assuring that these
arguments were nothing but palpable evidence of a kind
of oppressive plot to maintain the exploitation and hege-
mony of one another.
These revolutionary cells also showed that organic func-

tioning was poorly designed, since every cell, organ or
tissue pursued a “selfish” particular interest. This incor-
rect attitude should be replaced immediately by another
mechanism and centralized control, which they would
implement.
The other cells responded that such a point of view was

one of the greatest nonsense they have ever heard, since
it was through millions of years of evolution that this
ingenious and surprising mechanism was reached, which
produced the effect following among other things:
During the search of the primary stimulus of each cell

or group, such objective or individualized “benefit” was
only achieved when each tiny part optimized or made
good use of the different nutrients and oxygen that was
received automatically, and invisibly induced something
of extraordinary relevance for the rest: the generalized
bodily productivity, which resulted in a wonderful mul-
tiplier effect. The fact that they were not aware of some-
thing so elementary was significant, which indicated that
their theses were unviable and too superficial.
They added that if they removed the primary stimulus

to each cell or group, productivity and good brain, eye,
126
Money and wellness
kidney, pulmonary, cardiac, digestive, muscular, ner-

vous, reproductive, immunological, hormonal results
would collapse immediately. This would surely make the
amount of reciprocal benefits to the whole — including
the benefit the tissue receives from the muscle through
the cells— fall far below minimum subsistence levels.
However, these kinds of arguments —no matter how

convincing they seemed to be— did not persuade the
revolutionary cells, which, rather than trying to analyze
the reason that those of inclusive thought could have,
pretended to take full control of the organism in order
to be able to carry out those that they considered were
their so outstanding theories.
The cells that were waiting for the arguments of both

groups concluded that perhaps the reforming cells were
not even so convinced of these fragile arguments. Rather,
they only used them as a means or excuse for a total
body control.
Meanwhile, out in the streets, this gentleman gets worri-

less home, and is about to carry out other activities. He
would never have imagined the odd and rather wacky
battle that is going on inside him. For the moment, the
only thing that we could explain is that their survival
shall depend on the reason prevailing in all its very small
parts and realize that they are actually integrated in the
same whole, and fully perceive that good or evil of some
shall hopelessly be associated with the rest.
Going back to the main subject of the book and before the
author discusses another of his atrocious examples... We
could say that, if the citizens of any country are subject
to these and other types of interference, what kind of
defense could we put forward should we want a better
economy?
127
This and any other risk can be tackled with increasing

knowledge and information from the audience on cru-
cial issues. No wonder the statement, “Democracy is not
perfect, but it is the best existing system.” However, we
sometimes forget that a counterpart is required for its
optimal though sometimes minimized performance:
We need and adequate perception and capacity of judg-

ment of the whole community since, otherwise, a de-
ceptively attractive, simplistic or sometimes unrealistic
approach of some individuals would be enough to cause
atrocious complications to the world.
To achieve the informational development required, it is

also crucial to maintain full press freedom, since one of
the first things that any lost leader (and possible dictator)
shall do —perhaps unwittingly aware of his ideological
fragility— as a rule is to silence under any alleged reason
all kinds of opposing opinions.
Let’s see one of Hitler’s regrettable examples. Do you

recall one of the first things he did? I can assure you
that, if press freedom had been “allowed”, all his racist,
anti-Semitic, belligerent, territorial expansion, hatred and
other misguided assumptions would never have caught
on, had there been —even within his own country—, su-
perior, solid, sensible arguments and contrary ideological
positions much closer to reason. Don’t you think?
Some might say that meaningless ideologies can also arise,

such as those of the “revolutionary” cells of the previous
example. It’s true, but —beware— in the face of such
an eventuality, it would only highlight the need to have
a higher level of knowledge. I assure you that an audi-
ence going thoroughly through all kinds of options has
the ability to properly decide the origin or lack thereof
of any alternative. Thus, a crazy thesis shall be stopped
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Money and wellness
and exposed to the community in less than a stuttering

cock crowing.108
Furthermore, something worth noting is that this same

freedom and greater generalized knowledge will also al-
low us to shed more light on the best way forward. This
shall make us realize, among other advantages, that all
walls and barriers we have arbitrarily fabricated through-
out history among peoples are no more than unreasonable
artificial divisions, which were only the result of the same
sociological and philosophical superficiality with which
we have conducted ourselves.
It will make us realize that the future can be perfectly

manageable if we are able to integrate what should
never have disintegrated. Only then can we extend socio-
economic development to all our brothers in the world,
and realize a small detail that we have forgotten: we are
part of a team called the World.
Should we have a higher level of knowledge, we could

acknowledge another issue that we pretend non-existent:
the greatest human crime of all times has been to allow
the resources that the Supreme Being placed in all —in
very different areas— to be returning in its vast major-
ity —in a shameful way— to dust without being able to
project its potential and benefit. They first come back
in many different ways to individuals, then, as I said, to
the whole community, and later on, to the issuer of the
action. This in turn will have a decisive impact —in an
108
Excuse me for this joke. I use this term because I like the nice and distinc-
tive way of cockcrow.
I also emphasize something odd. All those with ideas similar to the “revolu-
tionary” cells that have emerged throughout history used a procedure that is
worth highlighting: first they used press freedom to disseminate what they
considered surprising discoveries and then, once they got the power, they ruled
out all possibility of opposing arguments.
129
extraordinary multiplier effect— on real wellness and

universal development.
“What if we remind this often lost author that this book

is about economics?” More than one reader would say.
Therefore, could you please be so kind as to go back,
kind author, to the monetary aspect with which you have
bored us so much? And to make things clear... Could
the economic issue help, at least in a small proportion
to what he has just told us, even in a gradual economic
integration?
The most important thing for this ambitious goal shall

undoubtedly be, as I mentioned, to perceive the impor-
tant sociological and philosophical factor in its appropri-
ate, comprehensive and inclusive dimension, which is
achieved by increasing the level of knowledge and educa-
tion in very different areas. This in turn would make us
discover —among many other things— that the financial
aspect, properly managed, can in fact contribute eventu-
ally in different ways to the much-needed integration.
In the following pages I will describe one of them, but

not before giving you the good news that there is very
little left to finish the book giving soon an end, therefore,
to the torment derived from reading it. But do not rush
dear reader, don’t throw it away yet, there is one more
chapter to go.
130
Money and wellness
Part three
The future
131
132
Money and wellness
Chapter 8
An integrating element
under fair ratios
Idle reflection
In previous pages we had comments on experiences of

history, anecdotes, examples, expert advice and several
observations as objective as possible. In the next chapter
the author will make a reflection on the topic.
Therefore, with your permission, I propose that we see

what the author can comment on a possible progress in
the economic and monetary issue for the future…
When we put on the analysis table a topic that has not

been explored enough, and taking into account that when
looking forward we can not help but notice that we must
be very cautious, and conform our thinking and go on not
only under the limited optics or vision of a single person,
but of the contributions of all. It seems as if the Supreme
Being, or Nature, as you prefer to call it, has intentionally
endowed each one with a little piece of truth so that only
through the contribution, analysis and argumentation of
all, we can access to longer stays of knowledge. Only in
this way can we and must we move forward in a real way.
Would it be possible to use money not only as a generator

of wellness, but as a fair exchange integrator and con-
tributing to this long-awaited generalized development?
Background
Let's look at the strictly economic issue first. In one of

the aspects raised in the previous pages, I highlighted
133
the way foreign trade in a somewhat imperceptible way

increasingly affects each country.
It's true... but why does it happen like that? What the
hell has to do with a "mercantile" issue or with a simple
exchange of goods between countries, if the economy and
the monetary policy seem to be something of exclusive
competence of each nation’s government?
I ask you to consider the following: everything that modi-

fies in some sense the so essential equation or balance
between "assets" and "circulating" will automatically
force us to link to foreign trade. Why?
As I described, that topic is included in the crucial equa-

tion or balance indicated. I almost dared to say that a
book like the one you are just reading would have been
incomplete, if we had not addressed the subject.
Oh my Gosh! Isn’t the author exaggerating? Judge for

yourself if an excess of imports or exports affect the "bal-
ance" between "circulating money" and "assets", and if
it affects the monetary issue.
Is it not that the author is clinging to include an inappro-

priate topic? Or maybe... Shall it happen as he says and
he got into the economic life of each country?
I also note that in a strict or merely arithmetical sense,

any "excessive" imports of goods would be in some way
self-compensated with its counterpart: its payment or
the corresponding remittance of "money" abroad to pay
for it. Some do not perceive fully that it will not always
happen that way, since the natural "usual" commercial
flow shall very often be influenced by other variables...
Damn! Once again the author came up with his compli-
cated stuff?
134
Money and wellness
What kind of variables intervenes? It is not as complicated

as it actually seems believe me. What is expressed is due
to very simple principles, look:
I will use another of my examples again, just in case

you have not had enough. Let's imagine that any coun-
try has an abnormal deficit in its trade balance (more
imports than exports). This will automatically make (if
the other economic variables remain the same, or céteris
paribus109 as experts would say) that the country pays in
some way the "financial shortage", because that country
"bought" more from abroad than it "sold" —among other
drawbacks.
Note carefully the difference of what happens when other

variables come into play. A "trade balance" can end the
year with a "surplus" or "deficit" balance. In contrast,
in the "balance of payments" the same cannot happen.
Why? In that same period, the balance always has to end
in "zero", hell! But then... against what can we adjust it,
since we will always have a "surplus" or a "missing" in
terms of trade?
Any "surplus" or, as the case may be, "shortage", must

necessarily be reflected in one or more of the following:
a) Increase or decrease in its foreign exchange reserves,
b) Compensation with capital transfers that have been
made, or c) Fluctuations in the debt amount. There is no
other way.110
Ceteris paribus: (o caeteris paribus) is a Latin phrase meaning "once the other
109
variables are equal". This method is used in some sciences, mostly for analysis
purposes. Isolation and Aggregation in Economics Schlicht, E., Editorial Springer.
110
Hence the extraordinary importance that every political leader must have
an excellent domain of public finances, otherwise, one of the adverse results
shall be an inevitable increase in “debt”, as in the unfortunate case of the
two openly populists presidential terms in Mexico already described (1970-
1982). Part of the negative effects of such period were reflected in an extra-...
135
However, although in the first instance this seems to be

limited to a simple "adjustment" in one or several of the
described lines overlooked by the political or financial
authority of a country could lead to really serious prob-
lems. As proof of above, we shall now interrelate this
fact with the following.
Recent history
I invite you to a small but illustrative journey in time.

With the "time machine" that we already use to move
to the Paleolithic at the beginning of this book, let's go
only a few decades ago, let's say to the forties of the last
century, a little before the Bretton Woods agreements.111
...ordinary increase of the Mexican debt of 1 204 percent. Sources: Sixth

Government Report of President Gustavo Díaz Ordaz. September 1st, 1970/.
Chamber of Deputies; Center for Public Finance Studies; Historical Statistics
of the Public Debt in Mexico, 1980-2002, p16.
111
The Bretton Woods agreements are the resolutions of the United Nations
monetary and financial conference, held in Bretton Woods (New Hampshire,
USA), from July 1st to 22nd, 1944. Bases of the commercial and financial rela-
tions between the countries were established in an attempt to eliminate the
protectionism that had prevailed since 1914. It was considered that the free
trade policy would help development, which would contribute to world peace.
The World Bank and the International Monetary Fund (IMF) were created using
the US dollar as the international reference currency, having started to operate
upon these agreements in 1946.
One of the forefathers of such agreements was the Atlantic Charter signed by
Franklin D. Roosevelt and Winston Churchill in 1941, when they met on a
ship in the North Atlantic. Roosevelt had a very clear and visionary perception
about the postwar world, so, in that letter, the right of all nations to access trade
and free trade was established; and, in a way, the Bretton Woods agreements
were nothing more than a way of completing the sense of the Atlantic Charter.
At Bretton Woods, the desirability of creating a third world economic organi-
zation, which would be called the International Trade Organization, was also
proposed, which was later replaced by the General Agreement on Tariffs and
Trade (GATT), that in turn was absorbed by the World Trade Organization
(WTO). Eric Helleiner, Cornell University Press.
136
Money and wellness
Once placed in the context of that time, we will see that

the United States produced little more than 50 percent
of world GDP and since the war had been catastrophic
in different parts of the globe, it had a favorable trade
balance. This caused them to accumulate reserves year
after year, and, as if that were not enough, they had very
prominent institutionality and leadership,112 which al-
lowed them to have an understandable global credibility
and respectability.
That is why it will be easy to understand why the

American political and economic position prevailed in
the agreements mentioned at Bretton Woods, which was
very reasonable for the time.
There is doubt either that, for practical purposes, the most

understandable and even logical issue was that in those
years these commercial and financial agreements were
reached with the US dollar as a reference and common
denominator universally accepted in global transactions,
which in fact worked efficiently for decades.
It should also be noted that the commitment was to keep

the US currency equivalent to $ 35 per ounce of gold. I
would like to remind our readers that, strictly speaking,
it is not necessary to have a payment method "associated"
with a certain amount of silver or gold, since, what actu-
ally gives sustainability to any currency is the goods and
services it represents.
This "equivalence" with a certain precious metal was

basically for two purposes. One of them was the psycho-
112
As it happened with Franklin D. Roosevelt (1882-1945) who was the only one
in the U.S. to have won four presidential elections in 1932, 1936, 1940 and 1944.
He could not conclude the latter. Page: "The Presidents of the United States"
http://presidenteseeuu.blogspot.mx/2009/10/franklin-droosevelt.html
137
logical character, that is, achieving public credibility and

its subsequent universal acceptance; and the second one
was intended to avoid an eventual disorder or irrespon-
sibility from any government in the world.
Now, once we could appreciate in the forties that authen-

tic world catastrophe of the Second World War, as well
as the strenuous recovery of the following years, let us
now return twenty-five years more to the present time,
that is, in the early seventies.
What do we have now? Surprisingly in those relatively

few years, the global context was completely transformed.
The United States began to have a negative balance in its
trade balance —which later became chronic—, and many
other regions of the developed and developing world re-
covered —or grew, respectively— in terms of their produc-
tive capacity. But what is the problem with it? Actually
none except that the scenario changed completely.
Although come to think of it, the only fundamental prob-

lem of a changing environment like the one described
—and almost anyone—, would not be so much to face
a new situation in itself, but rather, how to react to it.
Therefore... Did the United States proceed correctly in
the face of this different panorama? The then President
Nixon adopted certain measures such as abandoning the
dollar equivalence with respect to gold. This resulted
in a depreciation of said currency in its relative value
regarding other currencies and the imports of several
merchandise was taxed with certain rates.113
113
According to the criterion of the author and taking the risk to make a judg-
ment —I do not have enough elements to support this claim— I feel that he
was advised (especially in the first two points) by a very capable economist,
as it could have been Milton Friedman, who had the privileged opportunity
to advise him. Likewise, I believe that said "depreciation" was not carried out
in the required proportion given that its fixation was left to market forces...
138
Money and wellness
As we prefer that the facts speak for themselves and

given that we are worried about our old time machine,
let’s go back to the present.
What has happened since the seventies to date? Was the

North American trade balance resolved in a radical and
definitive way? Furthermore... What happened to their
currency? Did it continue to be a world reference in
world trade?
The trade balance problem not only was not solved but
also worsened. The US dollar depreciation did not result
in this currency to be at its real levels according to its
foreign trade flow. What happened? Why did not the cur-
rency depreciate to such a level that it would have made
products more competitive?
The disguised variables already mentioned went into ac-

tion in an invisible way to which, believe me, they love
making mischief. An unusual international effort to "buy"
that currency placed it at a certain percentage above its
real value. At the same time, this unusual influx of re-
sources allowed them to comfortably settle the growing
deficit in their trade balance... Oh dear! Those variants
that this insufferable author told us so much are really
naughty! So, what got in the way that made us come to
all this?
Wrong medication
If you or your servant were doctors —in the case of the

author, don’t panic I am not, so you are not at risk of
...(a mechanism in which Friedman firmly believed — with good reason),

although they did not take into account that the market in turn was unduly
influenced by a more substantive element that we will mention below.
139
entering my office— and we realized that, with certain

prescription our patients get worse, I am sure that we
would have changed almost immediately any indication
of any specialist, don’t you think? But it did not hap-
pen that way with the description above. Perhaps this
is precisely due to the interference of those overlapping
variables mentioned introduced in a concealed manner
in a certain scenario without permission —or sometimes
even with it— and, in the best of cases, cause distortions.
What do I mean? I submit for your consideration my
particular perception.
Although the Bretton Woods agreements at the time

and under the circumstances were successful, over the
years were obsolete. I think the reason is simple. It is not
adequate to base or interrelate an international means
of payment on any specific good —whether gold, silver,
diamonds, oil or whatever comes to mind—114 since we
would be subject to accidental or intentional modifica-
tions derived from the understandable offer or demand
oscillations, or both. This in turn would lead to unwanted
variations not only in the currency itself, but also in the
goods that it represents.
It would not be a good option either to use the currency

of any country or region as a means of international pay-
ment however "solid" it might seem... Why? It would hap-
pen just what happens right now... And what’s that? Can
you explain a little more why you consider it that way?
All currencies are subject to their own needs, internal

114
As I am sure you understand, there have been individuals who have sug-
gested —in a superficial way— a hypothetical international currency based on
"oil", which is not convenient. John Maynard Keynes, a real knowledgeable
economist, suggested once a means of global change associated with the price
of 30 items. In my humble opinion, it would be more precise and simple to
interrelate not with a limited number of assets, but with all, which we naturally
obtain with "the sum of the goods and services" available.
140
Money and wellness
policies, conveniences, successes or failures, productivity

and other particularities of each country or group. This
will influence not only its internal economic performance,
but also the consequent global trade. It is likely that the
first impact shall be on the owners of such currency used
as a world reference.
Wow! And how did we not realize that? You wouldn’t

believe me, dear reader... Do you know why I did not
invite you in this chapter with my vilified and non-exis-
tent time machine to move us further back in history? It
might seem incredible, but due to the irrational and even
primitive sociological position that we have suffered —as I
described in past chapters—, this produced, among other
drawbacks, the following effect:
The extraordinary human —as well as the economic and

monetary— potential underlying in most of our fellow
human beings has not come out as it should, and I assure
you that we need it much even if we do not even realize
it. The author is giving us the spiel again!
This explains, my patient reader, the serious lack of many

more advances not only in economic matters, but also
in other sciences, and there is a sense of absence, empti-
ness or "gap". Hold on, author! Before we go in another
direction, tell us... What did we need and why? Perhaps
within that so limited human sector of which you speak
about, which has developed in economic and political
matter, you are suggesting that others didn’t notice such
failure in the monetary question?
Of course there were limited but valuable advances, and

we need the transcendental contribution of the majority,
I insist. But I will quote what was said about it, specifi-
cally about the relevance of a supranational currency, or
common denominator of all currencies of the world that
141
would have avoided distortions like the ones described.

Below, you’ll find four opinions about the subject.
The very prominent and already mentioned liberal

president of the United States Franklin Delano Roosevelt
tried to create a kind of global single currency, and even
called it "Unitas".115* No such supranational currency
was implanted in the Bretton Woods agreements of 1944
perhaps, in part — although difficult to know—, due to
its increasingly limiting physical suffering, the minor
technological, financial and operative advances of the
time, or maybe just following the most "simple" or "saf-
est" route.116
However, John Maynard Kenes, another prominent

economist who attended the Bretton Woods agreements
in 1944 on behalf of England proposed the convenience
of a supranational currency and also suggested a possible
name: Bancor.
In 1960, Robert Triffin, a very notable Belgian-American

economist117, presented before the United States Senate
the inconvenience —even for that nation— of using that
115
https://es.wikipedia.org/wiki/Bancor
* Another reason why the author admires Franklin Delano Roosevelt is that, in
his fourth re-election (1944), he already had very poor health. He was almost
disabled, which made it very difficult for him to carry out all his activities.
Nevertheless, he continued in office, which benefited his country and the world,
until his death in April of the following year.
“Finance & Development”. Quarterly journal of the International Monetary
116
Fund, September 1998, volume 35, number 3. http://www.imf.org/external/

pubs/ft/fandd/1998/09/boughton.htm
117
Robert Triffin (Belgian-American, 1911-1993). He held positions in the
Federal Reserve of the United States (1942-1946), the International Monetary
Fund (1946-1948) and the Organization for European Economic Cooperation
(1948-1951), today the OECD. Since 1951 he taught economics at the Uni-
versities of Yale and Berkeley. In 1960, he testified before the US Congress
about the serious deficiencies in the Bretton Woods financial system, as it...
142
Money and wellness
currency as a means of payment worldwide. Since 1960,

Triffin considered that the amount of dollars circulating
abroad was excessive, which led to a curious paradox
that was known worldwide as the "Triffin dilemma".
Among other things, this dilemma forced the dollar to
be maintained as a "solid" currency —too much, in the
author's opinion— and, on the other hand, such solidity
damaged its own foreign trade since it made its exports
"more expensive" and “cheapened” imports.
If that situation had not existed, I believe that once the

nation's trade deficit had been presented and increased,
it would have pressed naturally the dollar down, a fact
that would have automatically placed it in a more com-
petitive international position.
The question is where was this process artificially inter-

fered with? From an abnormal income (or say acquisition)
of US dollars for its current role that represents a kind
of "global currency", and the respectability or credibility
it still holds. The excessive entry of other currencies in
the world not only raises their value, but actually —a
currency a little higher than the "normal"— impacts in
terms of their international competitiveness. In addition,
this abnormal entry of resources allows the financing of
its astronomical trade deficit.
In other words, they are not only decreasing their enor-

mous internal productive capacity with this huge influx of
goods from all over that are generating jobs and benefits
...caused an excess of US dollars abroad, whose number exceeded the amount
of gold that was supposed to support it. He resumed his Belgian nationality in
1977 and returned to Europe, where he became a strong supporter of European
integration, collaborating in the formation of the European monetary system
and supporting the creation of a European Central Bank. Macroeconomics,
Dornbusch, Rudiger and Fischer, Stanley; Mc Graw Hill. “III Conference on
Political Economy”, Roberto J.A. Kalauz, Buenos Aires. http://www.ungs.edu.
ar/ms_idh/wp-
143
in other latitudes. The downside of the matter is that they

are doing it by throwing a big snowball —called debt—
that is getting bigger everyday.
Another analyst who also explained the advisability of

replacing the US dollar through the Special Drawing
Rights (SDR)118 was Dominique Strauss Kahn.119 This
position did not catch on due mainly to its untimely exit
from the International Monetary Fund (IMF).
Given the magnitude of the problem, some important

reflections could be made. The first question would be:
were the Bretton Woods agreements wrong? At the time
and given the environment and inherent limitations of
118
Special Drawing Rights (SDR) are a method of payment or financial exchange
between the member countries of the International Monetary Fund (IMF). At
this time the amount of SDR is made up of 42% US dollars, 31% euros, 8%
Japanese yen, 8% British sterling and 11% Chinese yuan. During the manage-
ment of Straus-Kahn in the IMF, the volume of SDR increased substantially
since, due to the 2008 global financial crisis, SDRs were intended to play a
much more active role in international transactions, decreasing the large de-
pendence on the dollar after his resignation in March 2011 due to a personal
accusation. At a subsequent IMF meeting in October of that same year, the
proposal was reversed considering that the size of SDR should not be increased
in order to avoid excessive costs and possible confusion. It is important to note
that although the American economist Henry Dexter White (1892-1948), who
represented the US at Bretton Woods, initially insisted on placing the dollar as
a world reference, he later rectified his position by means of an internal letter
in the IMF and two decades later the first amendment was made in the IMF
and the inclusion of other currencies in the SDRs was allowed. However, the
use of the US dollar in world trade is used for practical purposes at a higher
level than desired, which impacts —according to the author of the book— its
own competitiveness for the reasons given. "Finance & Development", Quar-
terly Journal of the International Monetary Fund, September 1998, volume
35, number 3.
119
Dominique Strauss-Kahn, (French, 1949). Director of the International Mon-
etary Fund (IMF) from 2007 to May 19, 2011 (the date he abruptly terminated
his administration due to a sexual accusation at a hotel in New York, USA). He
was Professor of Economics at the University of Nancy, Secretary of Foreign
Trade and Secretary of Economy in France. http://www.imf.org/external/pubs/
ft/fandd/1998/09/boughton.htm
144
Money and wellness
the time, I think they were an excellent progress for

international trade, which led to a real and effective
development. But those agreements should have been
perfected since the fifties or, at most, the sixties.
Was John Maynard Keynes' proposal good? No doubt

it was visionary and worthy of recognition, although
there are some points I do not fully agree completely.
His suggestion to establish a certain tax or collection to
the "surplus" countries (in terms of their balance of pay-
ments), along with other surpluses should be channeled
to the "deficit" countries.120
Triffin's signaling was correct. Perhaps he did not have the

proper answer given that the US balance in those years
was surplus. As for Mr. Strauss’ proposal, then director
of the International Monetary Fund to increasingly use
the Special Drawing Rights as a means of global exchange
alternative to the US dollar, it would not have been bad,
although perhaps there would be better alternatives.
Another reflection would be if an eventual elimination or

reduction of the US dollar as a reference in international
trade would harm the US. As I am sure you understand,
there will hardly be a single science where all experts
on the subject agree.
There are surely those who believe that such a decrease
120
Even if their intentions have been excellent, I think it would not have been
the best option to "punish" the productive countries and "reward" those who
are not, there is another way to help them. Imagine the professor of a university
who, since he considers that the current way of grading is unfair and "regres-
sive", he won’t use it anymore. He is progressive and fair —he says proudly—,
therefore, he will remove points from students with good grades, and will assign
them to those who are not trying harder. What effects will this so just teacher
produce? Exactly. Neither, the students with good grades nor those with bad
grades will make any effort. I assure you that if in a family, business, national
or global context we do not try to work hard and make an effort, the final result
shall revert in many and very different ways.
145
would be detrimental since a lower global demand for

US dollars would substantially reduce its value by de-
creasing the foreign currency entry. It would reduce as
well the important global financial flow that is currently
channeled to its Treasury Bonds, investments in the Stock
Exchange and other important assets. They would also
say that if the current capital inflow is reduced, it would
be more difficult to cover the current trade deficit, which
would force them to stabilize their trade balance in the
medium term. A perception like that would not be far
from reality.
There would also be, however, another perspective: a

substantial decrease in the relative value of the US dol-
lar —derived from the aforementioned— would make its
imports more expensive. This in turn would diminish im-
ports and make exports more competitive, which would
increase the latter, favoring thus their internal productiv-
ity in a remarkable way and, among other things, it would
facilitate the tourism that enters the US and would make
it more expensive for them to go abroad. All the above
would occur in the same proportion to the oscillation
of their currency. That, in my opinion, would not only
increase its economic potential, but also its employment
and development in a substantial way, influencing thus
its trade balance more than any protectionist measure
pretended.
Someone might think... Fortunately this meddlesome

author is not a doctor because his prescriptions are too
bitter! I can assure you that there are measures that are
worse when they are not applied than the supposed
sacrifice of applying them. Bear in mind also that the
corrections not taken in the past decades, may have to
be carried out now.
Furthermore, take into account that there is no artificial
146
Money and wellness
interference in the natural forces of the market or world

monetary flow, but rather the opposite: remove the undue
interference of something that was wrongly introduced
into the global financial scenario so that the commercial
concert international works as it should for the benefit
not only of the whole, but even of the US.
There will be those who consider that removing, or

rather, locating the dollar in its correct position would
affect the "pre-eminence" of such an important nation.
With your permission not only do I differ from such a
position, but I also insist that perhaps a scenario like the
current one could affect in the opposite direction, since
making the necessary adjustments would not create a
bubble that could have unintended consequences.
The downside of reconsidering the matter dear reader is

that it led to another of the atrocious reflections of this so
unreflective author. The human being has always made
the mistake of seeking a supposed —and undue— preemi-
nence (some even call it "greatness") either from a person
or a people when a more realistic approach would make
us broaden the perspective and aim to achieve it, but
under a universal or generalized context, as all members
of a team called the world.
Henry Dexter White said,121 "Only through international

cooperation will it be possible for countries to successfully
implement measures aimed at achieving and maintaining a
high level of employment and real prosperity, so that has to
be the goal of all economic policy." I think we not only side
with that, but we agree that only with a common vision,
and a sociological approach, let alone right, even "realis-
tic", we can reach that much-desired global development
Henry Dexter White (1892-1948) was the US representative in the Bretton

121
Woods agreements.
147
as described in previous chapters.
And since the author of this unbearable book is nosy, let's

see, what the hell would you suggest? As I am sure you
understand, the dimension of the problem requires the
participation of many experts in the economic, monetary
and financial issues. I could not fail, however, to include
my humble opinion:
It would definitely be essential to create a supranational

currency, which should be limited only to the field of
international trade especially in its early stages, managed
at the beginning and roughly, and subject to perfection
by experts as follows:
1) Management by WTO personnel highly specialized in

financial and monetary matters, 2) Flexible value of each
"national" currency with respect to it, depending basically
—according to WTO specialists— on the behavior of each
country’s balance (or by abnormal occasional movements
in its payment balance, should other undesired variables
intervened), 3) The currency of a "surplus" country would
have to be "appreciated" with respect to said world cur-
rency, while a "deficit" currency should be "depreciated".
4) International equitable distribution of global financial
reserves that, ultimately, shall provide the real support
and sustainability to the world currency122 depending on
several factors:
A) Its importance in the global context and depending on

122
The creation of a world currency would not eliminate the financial flow to
the US given that the real or support reserves of such international payment
means has to be distributed in all the reliable economies of the world. As the
US is one of the most reliable countries in terms of finance —fortunately for
them and others— and even with its current problems, this flow would decrease
for but would not be "eliminated" and distributed equally among all "reliable"
economies of the world. Therefore, such a measure benefits even the US itself
for the reasons explained above.
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Money and wellness
its proportion or relative importance in terms of world

trade, B) Correct financial and political soundness of its
institutions according to the opinion of a recognized panel
of experts, C) Respectful socio-democratic situation for
rights human rights and press freedom, since that would
become a contributing factor that could affect a greater
human development for each town; as well as other
conditions that may arise at the time and depending on
the good judgment of the financial authorities in charge.
Now, as for the "appreciation" or "depreciation" of each

currency with respect to that hypothetical supranational
currency, in my opinion the following beneficial effect
would be produced:
If country "A" has a repeated trade surplus, when the

currency is appreciated with respect to the currency that
serves as a global exchange, it would make its exports
more expensive and its imports more accessible, which
would gradually lead to an increase in the standard of
living due to the aggregate access of goods imported from
their own people.
On the other hand, if country "B" is usually deficient, and

year after year its currency is depreciated with respect to
that projected global currency, its own exports become in-
creasingly competitive. At the same time, imports become
more expensive, which will naturally and automatically
tend not only to global equilibrium, but also to avoid the
irrational draining of financial resources and sources of
employment from some countries towards others.
This author is really out of his mind! Some may say. The
currency "appreciation" of a surplus country would rep-
resent a kind of implicit "punishment" for every highly
efficient and organized nation in the world! How do you
think of such a thing?
It would not necessarily have to happen: if country "C"
149
is repeatedly "surplus", and smart enough not to want to

be "punished" with a possible "appreciation" of its cur-
rency, its way forward would be very simple: buy more
from abroad in search of a "balance". Thus, it would raise
the standard of living and wellbeing of its own people
(with a greater added volume of imported goods), and it
can perfectly continue with its high level of efficiency,
while remaining productive and efficient. I cannot find
the "punishment", do you?
However, in terms of operational mechanics, practical

instrumentation and other specific aspects of a monetary
system such as the one described, the rules and proce-
dures to be followed could not be established —and it
would not be convenient—, according to the indications
or standards established by a small group. Actually, two
of the most prominent economists who at that time took
part in the Bretton Woods agreements —John Maynard
Keynes and Henry Dexter White (England and the US,
respectively)— incurred in some unintentional inaccura-
cies.123
Therefore, once the origin of a reform in the global mon-
123
Henry Dexter White, PhD in Economics, despite being one of the most
capable people on monetary theme of the time —which is why he was the
representative in such agreements— originally estimated that the US dollar
should be established as a world reference. A short time later, however, he
reconsidered his position through a letter that only circulated in-house within
the IMF as already indicated. Personally, I believe that his brief life (55 years)
prevented him from making many more contributions on the monetary, devel-
opment and international trade issues. "The Battle of Bretton Woods", Benn
Steil, Princeton University Press. Paradoxically, Henry Dexter White, was ac-
cused of "communist" during the witch hunt, similar to the later macarthist in
1950-56, supported by IMF members, as with James M. Boughton in his article
"The Case against Harry Dexter White: Still Not Proven "on June 1st, 2001
of journal History of Political Economy (2001) 33 (2): pp. 219-239. https://doi.
org/10.1215/00182702-33-2-219. Under the limited perspective of the author
—excuse me, I do not have access to all the vital information in order to issue a
better judgment—, I consider that his successful internationalist and inclusive
position made him look for approaches with Soviet authorities to attract them
towards the organism that would be created (IMF). The inclusion of the...
150
Money and wellness
etary system has been analyzed and well defined, it might

be advisable to proceed as follows:
First of all establish the specific and crucial bases of that

intended. The best thing would be to submit its practical
and concrete operation to a kind of global contest towards
all specialists that are related to the subject, offering a
kind of important recognition and a certain financial re-
muneration to the best prepared, functional and practical
operation... Do you want to know the result?
We will be surprised not only by the breadth and variety

of the proposals —many of them extremely valuable— but
also by the enormous thinking potential that the members
of this great team called the world could have, when we
decide in a wise way. In addition, it would make us see
the absurdity of the limited way we have to make deci-
sions that could be far-reaching —as in this case— only
for a small group regardless of their capacity when we
have to be open to practically all specialists in the matter,
although the final decision should only be taken by the
panel of experts on the subject that have been in charge
of such an important issue.
As I can see how the reader wishes to put this annoying

author in the time machine, knowing it has almost no
batteries left, and making no batteries left, and mak-
ing it go to the paleolithic era with the author inside, I
believe the best thing I can do right now is to conclude
this frustrating book.
Since I have no doubt that this single currency would be a
...Russians anyway was rejected in those years due to the incompetence, disin-
formation and stubbornness of a dictator like Stalin. However, this unleashed
a huge mistrust of US ultraconservative groups.
151
measure that sooner or later will have to be implemented

and given that I trust that its name will be chosen by the
majority my last will as it is granted to the condemned
would be to name it "denarius". First, for the role it played
in history for being the basis of the monetary system in
the Roman Empire, and its meaning, "ten aces”.
There is no doubt that the author is out of his mind!

What the hell does that have to do? I confess that the true
development of a great team —ours, the world— cannot
come about simply by the development or growth of a
single element, the economic issue. If we were only to get
that element, you wouldn’t believe how many problems
would arise.124
A real growth in the economic issue must be accompanied

by other no less valuable "aces", that is, the important
growth in the educational, sociological, research, human
and even spiritual values for those who believe in them,
population stabilization,125 adequate civic sense, environ-
mental sense and other significant key factors.
I truly appreciate that you allowed me to torment you

with this book.
124
Among them, drugs. Have you observed, my dear and so patient reader, the
areas where consumption grows? The answer is in countries or regions with the
highest income. A greater development in the economic aspect only, without
a parallel growth in human and moral values, would have unfortunate results
in different social aspects.
125
For the importance of population stabilization, I recommend the Appendix.
152
Money and wellness
Epilogue
I’ll make the most of this last space for one more brief
reflection... Unbelievable! Another nonsense from the
author? Well, guess what? Yes, and the worst part is that
I will pose it through a personal anecdote:
When Hugo Chávez ascended to power in 1999 * (who

remained in office until his death, which occurred in
2013), a friend writer I had the pleasure of meeting126 —
he died—, expressed the following in a daily newspaper
column:
— Finally... Someone came to power for their people and

the poor!
I could not avoid getting in touch with him —as you may
have realized, dear reader, I am a bit nosy. Upon greeting
him, I remember very well that I mentioned a witty and
well-known popular saying:
—Calmantes montes, alicantes pintos, pájaros can-

tantes… (Statement of the popular Mexican jargon refer-
ring to the convenience of not anticipating judgments,
but rather waiting for the results… Calm down, be cool)
and I added:
* He remained in power in Venezuela for 13 years, until his death, which oc-
curred in 2013. He intended to stay longer.
126
I prefer not to mention his name because he had important achievements
in many other aspects; I do not think it is appropriate. Besides, he has no way
of expressing himself. I must confess that I did not take the precaution of
preserving the newspaper clippings where he indicated the aforementioned.
However, I think it is irrelevant.
153
—Anyone can claim the best intentions or even the most

impressive phrases and desires. Moreover, perhaps there
will not be a single politician who, to a greater or lesser
extent, has not done so... However, I believe that the key
to citizenship is somewhere else. Instead of "qualifying"
or comparing candidates for the loftiness of their goals,
we must evaluate the feasibility of their statements, or
better yet, analyze the specific means they will use to
meet them. If we do not do so, in many cases the remedy
could be worse than the disease itself.
—I think —he said— that you are very pessimistic…
—I would be the first one —I continued— to want ev-

erything to turn out as that man offered. But even when
things go well and things are planned and evaluated
as they should, there is no absolute guarantee that ev-
erything will turn out as expected. We will have to be
very cautious in terms of its execution and surrounding
circumstances. What would happen if things are badly
structured from the start?
—If this man applies, as everything seems to indicate, his

already well-known recipe for nationalizing companies,
exacerbating bureaucracy, governmental corporatism
and similar measures, among other things, will lower
the production of goods and services, which will first be
reflected in inflation, followed by a long sequel of seri-
ous inconveniences. And believe me, there will be no
resources to afford them. If you do not believe it, just
wait and see.
Although my friend made no more comments on the

subject in his column, he could no longer appreciate127
He died of cancer in 2010 after a bright, fruitful life and extraordinary social
127
participation. I will always appreciate his patience and understanding towards

me, and my limited opinion.
154
Money and wellness
the disastrous —although logical— results. These results

took a little longer because during the first decade of the
new 21st century hydrocarbon prices remained unusually
high, which allowed them —as long as they could— to
replace their growing production gap with large imports
of goods and services, but the collapse finally came. I am
sorry to insist, my patient reader, but I think that their
oil would have never been enough.
I can assure you that with an economic policy such as

the one described, even Hugo Chavez himself, his de-
scendants, successors, one of the apostles128 or the most
successful and qualified official brought from some region
of the world129 would have continued, the result would
have been the same, or worse, should the country didn’t
have the tens of billions of dollars from oil. You can bet
on that.
Oh! So do you intend that we do not try to improve the

people’s wellness? Of course, but in the right way, and
what would that be? First, based on economic, sociologi-
cal, educational laws and many others that affect human
actions. Subsequently, focus on the root causes that in
turn are projected in certain external manifestations,
same effects or consequences that unfortunately are what
some bad leaders try to address in a superficial manner.
128
For purposes of this book, this word is not associated with any religion or
belief. This term comes from the Greek word (apostles) and includes the pre-
fix (apo) "far" and "stelló" which means "sent". It was translated from Greek
into Latin "apostōlus". Etymological Dictionary of the Spanish Language, Joan
Corominas, Editorial Gredos.
129
Note: before the hypothetical "importation" of a capable official, I consider
that such a person would not have accepted such a "secret recipe". Well, in fact
it is not that secret anymore, it is globally known and would have conditioned
his work to the implementation of a more realistic economic policy.
155
For example, if an engineer prepares to build a very im-

portant bridge... Good Lord, now an analogy from the
author! When will this book end?
As I was saying... What would that engineer require to

do this work? First, based on the laws of physics, develop
a good project, consider reliable studies of the factors
involved, pay special attention to the materials used,
monitor costs, handle the source and destination of the
economic resources in an flawless, transparent and clear
way, monitor everything, and surround himself by trained
personnel... Do not you think?
Furthermore, in the unfortunate possibility that a crack

appeared in the structure... Imagine! Should it only be
necessary to address the external manifestation — as
populists do, orienting themselves to the effects rather
than to their real causes — that is, to "repair" and paint
the crack, or to go down to the bottom of the matter to
analyze the cause and to correct the true origin of the
problem?
If, for example, we assume that things are not carried

out as they should, tell me... Would the most eloquent
speech help? The answer is obvious. That hypothetical
professional —who I hope there were none like this— will
not only put workers and future users at serious risk, but
also waste resources, time, incur in responsibilities and
harm his personal credibility. Don’t you think?
It is also essential to analyze the other extreme. If we

realize that the person in charge of the work does ev-
erything as he should, the least we should do is fully
support him so that he can do his job well regardless of
who is in charge, since divisionism is one of the worst
things that can happen to any family, company, project,
organization, country or the world itself.
156
Money and wellness
Back again in the economic and monetary field, this an-

noying author has only intended to make his very humble
and little contribution in the construction of a kind of
symbolic bridge, which I hope can provide us access to
a better stay where there would be more possibilities of
an integral development for you and the other members
of that great team we all make up. Let me tell you: with
your help and that of everyone else, we can make it.
Before the author goes on with his nonsense, and more

than one of you comes up with the malevolent idea of
sending him to prehistoric times, I have two possible
solutions. One of them is to dismantle and transform
my naughty and so hated time machine into a blender,
or maybe, in a microwave oven, after all, it’s imaginary.
The second option is to finish this most dreadful text.
157
158
Money and wellness
Appendix
Final thoughts on population
If it had not been enough suffering for the reader, I will

afflict him/her with a last but very brief final though on
population.
Not you again! Thinking about it, if we have already tol-

erated so many silliness of the author, let’s read it taking
advantage that we have not thrown the book since the
bin is a bit far... Why has he chosen that particular topic?
You wouldn’t believe it, but there are still those who con-
sider that the demography and human wellness are not re-
lated. That is why I would like to refer briefly to the matter…
Has this annoying author gone out of his mind again?

Besides, why don’t we leave that matter to nature, and
stop interfering on human procreation?
This might seem incredible, but we have already inter-

fered for some time. A proof of this and before explaining
my point of view on the subject, I’ll refer to something
we did from the beginning of the 20th century up to date.
You must be dreaming! When did we do that, if a century
ago almost nobody addressed the subject?
Through the successful and advantageous use of medicine,

the high infant mortality rate that existed throughout his-
tory decreased drastically. Therefore, for purposes of the
human procreation process, our influence is overwhelming.
After this intervention, the infant mortality rate was

gradually reduced, and life expectancy increased, which
influenced and leveled procreation.
159
Such a somewhat "artificial" intervention achieved that

the high infant mortality rate until about a century ago
of 700 child deaths130 per 1,000 births decreased to 32
deaths per 1,000 births on average in the world.131 But we
must keep on forward in order to get to barely 5 deaths
around the world.132
Paradoxically, many did not perceive fully that this inter-

vention in procreation generalized the methods of family
planning.133
It should be recognized and emphasized that when a large

number of specialists and researchers on the subject in
the world realized the forced repercussion that would
have the infant mortality rate decrease, as well as the
beneficial elevation in "life expectancy", they not only
anticipated, but also warned in a timely manner the so-
cial, economic and ecological consequences that would
be projected on the global community and ecosystem.
Ideally is to maintain a situation of balance or stabiliza-

tion, as in almost everything that surrounds us. We can
think on a slight modification or growth as long as we
130
“Isaac Asimov’s Book of Facts” Lasser Press.
131
The current average infant mortality rate in the world is 32 infant deaths per
1 000 births, five of which occur in "developed" countries, and 35 in developing
countries. Population Reference Bureau (PRB) Data Sheet 2017.
132
This seemingly harmless differential at this point still causes a high number
of child deaths close to 4 million per year, a figure that in the 20th century
exceeds by far the deaths occurred in all wars of the same period. Population
Reference Bureu (PRB) Data Sheet 2015. Much of the responsibility that this
entails rests in those who refuse to recognize the influence of the demographic
aspect on socioeconomic wellness.
133
This does not mean that we should be at the other extreme, i.e., below the
level of "generation substitution" as it happens in some countries. Only about
15 percent of the world is in such a condition while most countries still have
a higher than desirable growth rate. However, it is almost certain that these
countries consider migration as a setoff for this difference.
160
Money and wellness
can solve the aberrant and almost criminal deficits in so

many different areas. Creating first the needs and short-
comings and then looking for someone to blame or find
their solution is an irresponsible and unworthy behavior
of any person who claims to have use of reason.
As a result of such information and in open opposition

to some ultraconservative groups, it was possible to
partially avoid the socioeconomic, environmental and
human deterioration were more serious by exposing the
inconveniences all over the world. But we must empha-
size that we still need to advance more in this regard and,
I would like to tell you, if I may, why I consider it so.
This is unbelievable! I am increasingly convinced that this

author is out of his mind! What on earth has all this to do
with the topic on wellness he has been boring us along this
very annoying book? Has he already forgotten the subject?
I do not blame those who consider that the population

issue seems to be another specialty, but if we analyze
the matter a little more carefully, we will find out that
—along with other key elements— it is somehow linked
to our subject. To make matters worse, I can assure you
that this issue was completely introduced by itself in our
socioeconomic environment, but what worries most is
that many people did not realize it.
If we go a little deeper in this process we will see it in a

surprisingly clear way. When the infant mortality rate was
lowered, the population growth rate rose substantially
and automatically. And what the hell does that matter?
This effect produced a shorter period of population dou-
bling in most of the world.134
134
If specialists had not warned of the risk at the time, it would have been
much worse and would have turned most countries into incredibly chaotic
areas for the reasons explained below.
161
But the most important thing is the human element!

Have you already forgotten that? I totally agree, my dear
reader but, I insist, if the human issue is precisely the
most valuable thing, this makes us to be more careful
about it. Let me show you why I consider it so:
Anything in our world and the universe interacting in

an unsynchronized way with other factors involved will
have harmful effects, and the consequences shall be as
harmful as there is an eventual phase-out of the factors
that come into play.
Damn! I think this stubborn author simply doesn’t get it...

We are trying to make him understand that the population
issue is not only "positive", but also something extremely
valuable, as you acknowledged! Can someone explain it
to this annoying writer?
Well, guess what, my dear and patient reader? If elements

considered as "beneficial" come about or interact at an
inappropriate rate, its positive factor automatically causes
adverse effects, for example:
A person is diving and decides to come to the surface.

If the diver rises faster than bubbles, that apparently
harmless act could cost anyone's life...135 Wow! Why does
that happen? Isn’t "air" beneficial? What's wrong with
something as simple as rising to the surface?
That's exactly what I mean. The dangerous part is to do

it at a speed higher than recommended. No matter how
good or even indispensable oxygen is anyone who rises
incorrectly to the surface will suffer a decompression
that can be fatal.
The person would have a very high chance of developing decompression that
135
could prove fatal. Phenomenon described in the Boyle-Mariotte Law.
162
Money and wellness
Let's see another case. Few things are more valuable to

existence than food, right? But even in this case, if any of
us ingests it daily in an amount greater than its capacity
and speed of absorption and assimilation a series of com-
plications will develop. Furthermore, if this imbalance is
repeated, the person will suffer serious health problems,
regardless of how intrinsically good the food is.
Let's look at the demographic issue from a slightly clearer

perspective:
As soon as a country grows too fast, the period of "popu-

lation doubling" is shortened abnormally, which means
that vital basic needs will not be met because they cannot
be duplicated at the same period of time.
This "desynchronization" will generate in an overlapping

and silent way many deficiencies or deficits in most of the
basic social areas... In view of the above, I bet that many
will reach a conclusion like: The problem is that incom-
petent governments cannot do anything that obvious!
I do not pretend to stand up for any government in the

world they can defend themselves. Just take into account
what is carried out in practice: If a country doubles its
population in, say, only 35 years (the "developing" world
doubled its population in little more than that), it must
have the capacity to create, for practical purposes, all
infrastructure they have made throughout their entire
history in the same period, replace parts already exceed-
ing its useful life or obsolete and, if it were not enough,
work out the deficit accumulated for centuries. We do
not know of any country that has been able to achieve
such a goal, especially with a community that has been
carrying many shortcomings in almost all orders. Now
look at the scenario that citizens will see:
163
Any city with such a situation will have shortage in drink-

ing water supply and drainage; a large number of people
will lack remunerative jobs; many others will not have
the necessary education, training or the values required;
the medical and hospital capacity will be exceeded by
the needs of their community, and something similar will
happen with the police, judges and crime investigation
personnel; communication channels will be insufficient;
the energy need, the arable land, forestry and green areas
will increase, as well as many other important complica-
tions.
If we interrelate these deficiencies, and add, to make thing

worse, the drug use of some social sectors, not only will
we have a pathetic image full of serious injustices but
also even violence will grow to unacceptable levels.136
At this point there will be some additional risk: as soon

as the aforementioned psychological issue comes into
play —a great citizen unrest before the authorities in
turn—, things can worsen anywhere in the world for the
following reason:
Once a high percentage of the population "reaches the

conclusion" or interprets that the underlying reason for
the existing shortages is nothing but a palpable mani-
festation of governmental incompetence, the chances of
political leaders emerging without sufficient information
offering simplistic solutions will increase, which broad
sectors often will not identify as inadequate precisely
because of the pathetic condition in which they find
themselves.
136
The increase in the population growth rate will produce a long series of
pitiful shortcomings, although it will not be enough to increase the violence.
Other collateral negative elements shall appear such as inappropriate attitudes,
drug use, lack of values and others that will cause an increase in the rate of
intentional homicides.
164
Money and wellness
This author considers inconceivable that in certain social

sectors, politicians, ultraconservative groups and others137
still prevails a slight perception of the topic of this ap-
pendix. It is even unforgivable that such a thought comes
from the world segment considered as "more developed".
Strangely, some of them will be the ones who will often
complain about the drawbacks of "excessive migration"
from regions with high growth rates. "The things you will
see" would surely say Don Quixote almost immediately if
he were with us, but he can’t, he is right now "undoing
wrongs" in other dimensions.
Let the figures themselves tell us briefly something more,

because although they may seem so quiet and discreet,
I think they are also capable of showing us things; and
although their language is extremely silent, perhaps their
judgment could be more solid than rocks.
Figures say —quietly— that they regret not being able to

show all they want. But even with the exposed limitation
of not boring you anymore with this book... What could
they tell us?
There are areas that doubled their population in 63 years,

as in fact happened in North America.138 During that
period they were able to duplicate the satisfiers at the
required rate. In Europe,139 the population doubled in a
little over 200 years. However, the situation was different
in most of the world.
Many objections of such groups are answered by the author from another
137
perspective and in a slightly broader way in the book VIOLENCE OR DEVEL-

OPMENT, which is found in: www.juanmanuelochoat.blogspot.com
It is important to mention that a significant percentage of the population in
138
North America came from immigration.

139
The accurate interval of population duplication in the European zone is
unknown, given that (old) census of some countries in the area are not com-
pletely reliable, but population duplication was close to the indicated figure.
165
For example, Asia doubled its population in 43 years,

Latin America in 41, and Africa in 27.140 But if you doubt
that figures are capable of communicating things, look at
the different results of a region with similar sociocultural
characteristics: Latin America. For a better but concise
analysis, let's look at four key aspects in ten countries
of the region: a) Human Development Index (HDI),141
b) Population Growth Index, c) Domestic Product per
Inhabitant, and d) Infant Mortality.142
Of these ten countries —from the same continent and

with a similar sociocultural background— five of them
have a faster population growth: Haiti, Guatemala, Bo-
livia, Honduras and El Salvador. And in Argentina, Bra-
zil, Chile, Uruguay and Costa Rica population growth is
more stable.
As you can see, when the population growth is higher

than recommended not only in these ten countries, but
also in most of the world, its "human development index"
(and its implication) falls significantly. This is intimately
associated with the economic income and general well-
being per person, and, at the same time, their infant
mortality rate remains higher. These situations are often
accompanied by a high and unusual level of violence.143
140
UN (population 2015).
Population Pyramids of the World from 1950 to 2100
141
IDH is a very important and revealing index on a country’s social and eco-
nomic situation. This indicator was created by the UN to assess the level of
socioeconomic development of each country.
142
Number of infant deaths per thousand births.
143
Economists like David Ricardo (1772-1823) observed the effect of an excessive
labor “offer” (frequently undertrained) on salary. Others were only interested
in the subject, like Karl Marx, so they did not perceive it that way. This fact
is understandable given that, although Marx studied Philosophy, Literature
and History in Bonn and Berlin, and some considered him a great economist,
his understanding on the subject was scarce. His studies in Economics were
self-taught during his exile in London, in the British Museum and, not only...
166
Money and wellness
All of this makes us think that, apart from giving prior-

ity to other aspects of educational, economic, monetary,
sociological, political type, the population element must
also be especially taken into account.
However, for those who do not care about the opinions

of experts on the subject, or are not convinced with the
figures shown, perhaps they only have one third and re-
grettable option: they continue pretending that they do
not know about the matter, or that there is no connection
between the population issue and human wellness. But
it is my duty to warn you that no one will believe that
both those who will follow us in time, and who those in
due course judge the human actions, did not learn of the
damage they caused.
...he never got to study thoroughly Economics, but he disliked it. He once
wrote to Engels: “... I have completed all the economic garbage in five weeks.”
(Werner Blumenberg “Marx”, p.121 — work based on his own correspondence
— Salvat 1962). In other letters he repeats “economic garbage” and “this crap”.
Pretending, however, an enormous erudition —to the point of impressing many,
including myself—, “forced” his so limited economic approach towards his
also backward philosophical and sociological conceptualization, which led, as
expected, to the results the world learned.
I sincerely consider his good intentions but whoever intends to benefit others
must first be based on solid laws and principles, don’t you think? In the social
and economic area at least the stimuli that naturally, automatically and invis-
ibly affect human behavior and productivity must be known.
Sociological and philosophical perception of Marx was so anachronistic that
he did not even conceptualize the community as what it is — an indivisible,
interrelated and inclusive entity — but fragmented it into somewhat antago-
nistic “classes”.
Relevant note: All human theses are perfectible, including of course the non-
sense of this disrespectful author.
167
TABLE 1
LATIN AMERICAN COUNTRIES
WITH HIGHEST
POPULATION GROWTH144
%
Population
COUNTRY HDI Growth INH CHILD
GNP DEATHS
Haiti 0,493 1.5 1,790 48

Guatemala 0,640 1.9 7,750 26
Bolivia 0,674 1.7 7,050 39
Honduras 0,625 1.7 4,420 26
El Salvador 0,680 1.3 8,220 17
TABLE 2
FIVE LATIN AMERICAN COUNTRIES
WITH SLOWER
POPULATION GROWTH
%
Population
COUNTRY HDI Growth INH CHILD
GNP DEATHS
Argentina 0,827 0.9 19,480 10

Brazil145 0,754 0.7 14,810 14
Chile 0,847 0.8 23,270 7
Uruguay 0,795 0.5 21,090 12
Costa Rica 0,776 0.9 15,750 8
144
The data of the Population Growth Index, GDP per inhabitant, and infant
mortality are obtained from the PRB Data Sheet (Population Reference Bureau)
2017, the HDI (Human Development Index) data were prepared by the United
Nations Development Program ( UNDP).
Something worth taking into account is that the favorable projection of a
possible reduction in the population growth rate is not immediate, but over
the following years, as can be observed in the particular case of Brazil, since
its reduction in the "Growth rate" is relatively recent, and still had a higher
population growth a few years ago. Population Reference Bureau (PRB) 2010.
145
It should also be mentioned that Argentina and Brazil have just emerged
from unfortunate populist experiences. Had it not been so, their economic
situation would be better.
168
Money and wellness
Acknowledgement
I would like to thank the valuable collaboration of
ANA SOFÍA OCHOA RICOUX in graphic design,
JUAN GERARDO SALAZAR PARADA in statisti-
cal data collection and LUIS TOVAR CARRILLO in
typography and layout. This book would have not
been possible without their support.
169

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JUAN MANUEL OCHOA TORRES

SOCIEDAD MEXICANA DE GEOGRAFÍA Y ESTADÍSTICA, A.C.

FIRST EDITION: MAY 2018

Copyright © Juan Manuel Ochoa Torres

Correspondence with the author:

SOCIEDAD MEXICANA DE GEOGRAFÍA Y ESTADÍSTICA, A.C.

C.P. 06020, Mexico City

Typography and layout:

Cover page: Ana Sofía Ochoa Ricoux

The total or partial reproduction of this book is prohibited

Part one. ............................................................... 11

Part three............................................................... 131

Chapter 8............................................................... 133

Epilogue. ............................................................... 153

This book is dedicated to all partners (today and

To my beautiful family, my wife Lucía, my son Juan

I wonder if you have ever asked yourself a question simi-

What gives value to these squared little papers, commonly

One day, on my way to the aforementioned nearby store

Why does Doña Pachita never refuse to receive them,

Well, guess what, these and other similar ideas rather

man by the way— who putting up with me and my great

“Professor…”, I told him once intrigued, “…you told us

“That’s right,” he answered.

“Well, I think that's wrong," I said, while I felt his clear

“What you’re saying,” he adds in disbelief, “is a heresy

“A currency value must be based on the amount of goods

“Therefore, and excuse me professor, every country’s cur-

“But if it were as you say, and since many circumstances

rency should also vary, that is, it would have to ‘float’,

“Well, it can float. In any case that would be a better al-

“So, imagine...,” he objected immediately. “How would

“In any case,” I said, “annual variation percentages would

Needless to say, dear reader, that although we had a very

In the early 70s, then President Richard Nixon announced

Even though factors impacted this evolution in monetary

way as you read this book. My intention with the brief

This important science that concerns us all complies

The first part describes how this important resource was

Therefore, whether you are or not involved, I assure you

Join me along the following pages and chapters and dis-

His reaction would have been understandable because

However, in the following (Neolithic) era a series of

In those remote years, some of our ancestors realized,

and it rained... Surprise! A plant similar in nature to the

Others would have noticed as well the benefit of the

Some built very primitive homes, and those watching

Since they no longer had to walk such enormous distances

Some more gradually learned the process of pottery and

of secondary changes that none of our heroic ancestors

Each one of the different members of these communities

Thus, in a completely natural and spontaneous way, there

More than one could have thought, “Oh gosh! Wouldn’t

An idea of this nature is absolutely outrageous. Imagine

Well, let me assure you that our hard-working ancestors

naturally— that human beings seem to have a kind of

So, with this undeniable fact, we could also ask ourselves if

What we did not realize is that humans act and proceed

I’ll just refer to one of them for now, which is a kind of

I think I can explain it better with an example. Let's sup-

Well, that same guideline shall apply to all the resources

As I said, a similar principle of "exploitation" or efficiency