The growth in IC also expands the potential of our Network Capacity (NC) as our above-average IC will become a useful tool for others in their pursuit of resources for themselves and their desire to grow their individual IC. For example, our skills in making quality winter clothes becomes an interest to also others exposed to cold during the winter months. We then make reciprocal connections with any person who needs winter clothes and possesses any of the other essential resources that we need. This expands our NC.

The Gift of Money

With greater expansion of IC and NC, the production and/or exchange of a single essential resource for another becomes much stronger, yet lacks efficiency. Obtaining more of the essential resources raises other issues such as security, spoil, and storage, and relying on others creates further uncertainties.

Our finite individual abilities call for lasting outcomes when exploiting our advantages. We would want to exchange our IC and excess resources for something more fungible than another essential resource. We would prefer something that won’t get spoiled if stored for a longer period, something that does not require a lot of storage place, or raise concerns of being snatched if not extensively protected. Essentially, we would prefer to exchange our capacities and excess resources for something elastic and durable.

Money - the Financial Capacity (FC) gives us flexibility to address our needs faster, without constant attempt for resource exchange. It also provides longevity with an opportunity to store our resources for a longer period of time without spoiling it (less the inflation). In sum, the FC emulates and complements the essential resources, but does not supplement them.  It mirrors essential resources. We can either have a large amount of water, food, or shelter – or have adequate amount of those and have enough money or other fungible Capital that can easily be converted or turned into the essential resources when in need of them.

We want FC because it’s fungible and easily convertible into any of the essential resources and exchangeable for access to other capacities we seek expeditiously. Instead of looking to find a perfect barter, resource-for-resource exchange, now we have flexibility in our action.

Building and Protecting our Capacities

Scarcity of resources assures that there would always be someone challenging our advantages by either producing more resources (no longer needing ours), or producing for a lesser value (no longer others needing ours) or producing better quality resources for the same value (others preferring the competitors’ resources). With that in mind, exchanging a resource for money and then not investing a portion of that FC into more IC (e.g. new skills) or NC, increases the chances of bringing an end to our resources. Consequently, knowing how to produce more resources for lesser or better quality for the same value is an IC advantage that one ought to always invest in to ensure healthy substinance and growth. This is the thinking that drives innovation and entrepreneurship… More in the next blog.