GLOSSARY

Aristotle's authority:

attitudes and opinions that are accepted because they are established, even though they are not accurate

benefit goods:

goods or services with higher use value than cost value. In general, an increase in the production of benefit goods will decrease the cost of living for the average consumer

cascade:

secondary production of wealth, a side-effect of the distribution of real wealth

colonial economics:

the economics of a subject nation, which produces only specific goods, for sale to another country, and which has to import most of the goods its citizens need

cost goods:

goods or services with higher cost value than use value. In general, an increase in the production of cost goods will increase the cost of living for the average consumer

cost value:

the monetary cost of goods or services

deposit banking:

a system of banks that accepts deposits of money, and which pays interest on them

derived dollars:

dollars earned by the distribution of real wealth

Federal Reserve bank:

a regional bank operated by the US Federal Reserve System. Where other banks deposit and borrow money

GDP:

(Gross Domestic Product) the value of all goods and services produced within a nation, whether produced by citizens of that nation or of another.

global economy:

a system in which all business is conducted on a global scale, and in which commercial corporations may be able to dictate policies and laws to national governments

GNP:

(Gross National Product) the value of all goods and services produced by the citizens of a nation, including the value of goods and services produced by citizens who work or conduct business outside the national boundaries.

high powered money:

the money US banks keep on deposit in the Federal Reserve is called "high powered" because the amount they can lend to their customers is based on the amount they have on deposit.

imagined dollars:

money which is created by banks to lend to their customers

input-output accounting:

developed by Wassily Leontiev of Harvard University. A system of accounting that tracks the raw materials used in the manufacture of products, as well as the production of finished goods.

Midas' mistake:

the belief that money has real value, other than as a medium of exchange

multiplier:

secondary production of wealth, a side-effect of the production of real wealth.

mutual fund:

a pool of investment money. Usually the money is provided by amateur investors, and managed by a professional

national economics:

the economics of a self sustaining nation, which produces all the goods its citizens need

neolithic axe:

a polished stone axe. The prototypical artifact of the neolithic era

numbers game:

the belief that the economic health of a system can be determined or measured by a simplistic number, such as the GNP or GDP

post-industrial economy:

a hypothetical economy in which some countries can import all the real goods they need, and produce only "knowledge" themselves

predators:

businessmen who do not produce wealth, and who take more from the economy than they contribute to it

producers:

businessmen and others who produce wealth, and who contribute more to the economy than they take from it

propagandists:

people who use advertising and information management techniques to disseminate an inaccurate view of the world

Ricardo's rationale:

the argument that each country or area should produce only those goods which it can produce more efficiently than any other, and should import all other goods

root dollars:

dollars earned by the production of real wealth

Rutherford's dictum:

"If you can't explain what you are doing to the woman who cleans your laboratory, the chances are that you don't understand it yourselves."

speculation:

buying and holding goods in anticipation of a shortage that will increase the price

subliminal:

information that we perceive without being consciously aware of it

traders:

businessmen who trade wealth, rather than produce it

use value:

the actual value of goods or services, in terms of their use to people

venture capitalist:

a capitalist who specializes in investments in new enterprises

wealth:

real goods and services that people need to live, or that improve the quality of life

zero average system:

the system that allows Canadian banks to loan money with no security, provided they do not maintain a long-term debt to the Bank of Canada