But since the large majority of money supply is created endogenously, it is a lot more plausible to view this in terms of resource scarcity sparking inflation which leads to the creation of additional money. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Concentrating purely on oil sales also misses consequential costs which will accumulate throughout the system, as everyone attempts to add their mark-up to oil-related products.
Since almost everyone relies on oil to some extent, this is going to add significantly to the misery, and the proportion of Gross Planetary Product which is influenced by oil prices will be much higher than that accounted for by direct sales.
I'd suggest we're seeing this already in the form of 'middle class' inflation, where food prices are rising because of transport costs and climate change.
This won't be mentioned in the official inflation figures because they are - effectively - dishonest.
Does it matter which way around this is? The effect is the same ...
Of course it matters. Certainly the effect on the economy is the same whether we report what is occurring in the economy, or resort to myths such as government dictating the total size of the money supply ... even if everyone believes that money is exogenous, it does not magically make the money supply exogenous.
However, if we rely on these modern myths, that also means that our vision of possible responses is also trapped in myth. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
