It's nothing to do with money. We're literally producing more and better goods than the previous year. This can be due to better technology, more tools, or increasing population (and probably some other factors I forgot).
Money doesn't affect the size of your economy, in general money is not even relevant to the discussion, save for the fact that it gives us a unit of measurement. Money is a relative resource, in a simplified manner, money dictates who gets what fraction of the pie. By printing more money you're not making more pie, just dividing the existing pie into thinner slices. Economies grow because of improvements in technology, science, using or finding natural resources, producing things etc.
"By printing more money you're not making more pie, just dividing the existing pie into thinner slices."
So if you need a haircut but can't afford one, and I give you a new £10 note to get a haircut, and the barber works the extra 10 minutes to do that haircut and earn that £10 there's no new pie there.
Looks like 10 minutes more output to me.
"Printing more money" does make more pie. That's exactly what happens every time a loan is taken out, or government hires somebody who would otherwise be unemployed.
"Printing more money" leads to "shredding more money" via loan repayments and increased tax take, all via increases in the utilisation of existing resources.
That because "printing more money" is about buying something. That something has to at least potentially exist or more money will not be printed and circulated in the first place.
This mixes up where the value creation takes place. Shitcoins are a good example of this fallacy, I can mint ten billion neilwilson-coins right now and hand them out, it doesn't mean any new value has been created. Perhaps an easier way to understand this conceptually is to think of money as a loan, because that's what it essentially is, a pair of credit and debit. Taking out a loan in and of itself it doesn't create any new value, the value is created if you do something useful with it. Money isn't even a requirement, you can also barter or trade. Money is only a means for mediating trade and do relative distribution, it isn't wealth.
The example was a barber. There is no difference between transferring an existing credit to the barber and generating a new credit for the barber. The result is the same - an additional haircut is performed.
In the case of a new credit that is an additional haircut that wouldn't otherwise have been performed because the person wanting it has desire, not demand (desire backed by the ability to pay).
So I disagree. We have a monetary economy. Since the whole point of the game is to 'make money' people will create more output if you offer them money in exchange for doing that.
The 'loan' as you call it drives the new production, as any loan does since all loans are, necessarily, new money.
This is a mixup of money and wealth. Money is not wealth, and in the same vein, the point of the game if you'd like to call it that, is not to make money, but to become wealthy. These are two very different things.
Wealth is possession of real assets, natural resources, real estate, valuable companies, in classical econ terms, any scarce resource. Money is not a scarce resource, for nearly marginal cost we could create a near infinite amount of it (and in the digital age of banking we often do create large amounts of it with no direct cost). You can't create more oil, land, houses etc without incurring considerable costs, whether it be in the form of effort, time or etc and that's what makes those resources scarce. Money is scarce if you look at it on a personal level, you can't just create more money for yourself, but that doesn't make it scarce on a global level.
What might create some confusion is that wealth is often measured in money, but that doesn't make it the same thing. Wealth is real resources and money is the means we use to decide who gets how much of those real resources.
Yet the wealthy have very large bank accounts and own an awful lot of financial assets.
Almost like you are completely wrong.
Not everybody is enamoured with shiny yellow metal.
The wealthy are not interested in hoarding stuff. The wealthy are interested in the flow of money that lets them do stuff - primarily by freeing up their time.
It's control of the annual pie that's the key, not a sitting on a pile of gold like Smaug.
You live alone in the forest and chop wood during the winter. The next winter you're much better at the task and chop more wood. There's no difference in money supply, population or any such. But your economic output has increased.
Demand increases due to population growth. Population goes down, growth goes down (broadly speaking, some caveats and nuance as always depending on some goods or services).
Or demand increases due to some major new factor (which has happened a few times in recent history) that basically enables new energy extraction, or new resource extraction.
But over very long periods of time, it does seem to mostly be connected to population.
Regardless of inflation or changes in the money supply, new techniques, new technologies, trade, and population growth can cause the value of everything bought and sold to increase over time. You can measure that value in dollars, or you can look at changes in the quantity and quality of goods and services.
Money just represents tokens to use on our collective pile of goods and services. Growth refers to the rate at which the pile grows, and is largely divorced from money. Money is fake, and the systems behind it's distribution/allocation is regularly gamed for personal gain, in ways that go against the spirit of what money is supposed to represent. Money is an intermediate tool to help keep a track of who put how much on the pile so that everyone can focus on doing what they are good at, and in return, take from the pile what they need, as made by others who are good at other things.
Increasingly we see a problem of people who add nothing to the pile getting large wads of money and taking more than their fair share from the pile. This is a problem.
There has to be a level of personal/private intent for this to be true.
I would argue that under a centrally planned economy, you could have the same number of people working, using the same tech/equipments and energy, but not be a good economy because the output isn't what those individual participants in the economy wants to consume.
and you've also casually mentioned 'useful', without saying to whom.
Basically, i am arguing that for productivity to be 'useful', it must be privately useful. Therefore, an economy must be producing something that an individual decided they want, rather than something that is commanded by an authority (such as a top-down command economy).
After all, the gov't authority might consider it useful to have holes dug by shovel, in order to occupy people and prevent them from doing other things.
