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Introduction. -- Part I. Money and the market. -- The difference between markets and barter: money and the making of markets. -- Capital and the firm : the firm as the engine of the market process. -- Money and money creation in a two-stage banking system. -- Part II. Market and production. -- The development of the theories of production : valid insights and shortcomings. -- Production involving nature and imagination. -- Income distribution in the process of growth. -- Part III. Money and production in the dynamics of the growth spiral : growth imperative and growth impetus. -- From the theory of growth to the theory of the growing economy. -- The economic process as a growth spiral. -- The increase of the present value of profits as the growth impetus. -- The avoidance of losses as the growth imperative. -- Growth opportunities and growth obstacles : the role of the state. -- Summary and outlook

 

This book develops a new theory of the modern economy. Conventional economic theory is (still) based on an essentially static notion of equilibrium. In contrast, this book offers an analysis of the economic process based on a truly dynamic approach. It understands modern economic activity as manifesting itself in a growth spiral. There are two main drivers of the dynamics of this spiral: steady money creation in the banking system, on the one hand; and the continuous inflow of energy and raw materials through the exploitation of natural resources, on the other. Both driving forces are generally neglected by the conventional theory. Understanding their role is absolutely essential for preventing our economy from being more and more exposed to financial and ecological crises. This book offers important insights about the functioning of the modern economy and addresses the specialist as well as the interested lay reader.