ABSTRACT
This chapter proposes a study of production, consumption, and banking, in hopes of a new consensus on the basic laws underlying economic phenomena. It aims to prepare the ground for a study of corporate profits. The chapter seeks to explain the relation between money and the real economy, focusing on productive activities, on consumption, and on the role of commercial banks as intermediaries between households and companies. Traditional economic theories state that production is an activity that takes place over time. However, this traditional conception of production gives way when money enters the scene. Between production and consumption, a temporary capital survives, the nature of which is twofold, being monetarily deposited in the bank’s books and physically warehoused in the company. Now, commercial banks, acting as intermediaries between households and companies, always manage monetary transactions as well as monetary deposits.
