{"id":93354,"date":"2026-06-27T08:00:44","date_gmt":"2026-06-27T07:00:44","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=93354"},"modified":"2026-06-27T08:02:16","modified_gmt":"2026-06-27T07:02:16","slug":"potential","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2026\/06\/27\/potential\/","title":{"rendered":"Potential"},"content":{"rendered":"

For the background to this post, please read this companion piece<\/a>.\u00a0<\/em><\/p>\n

\n

Imagine you are alone on a desert island.<\/p>\n

You have nothing.<\/p>\n

You have a choice.<\/p>\n

You can spend the day making money.<\/p>\n

You could carve shells into coins. Print banknotes on leaves. Even declare yourself Governor of the Island Bank.<\/p>\n

By sunset, you could be a billionaire.<\/p>\n

Would you be any better off?<\/p>\n

Of course not.<\/p>\n

There is nobody to trade with.<\/p>\n

No markets.<\/p>\n

No banks.<\/p>\n

No shops.<\/p>\n

Your money would have no purpose.<\/p>\n

Or you could spend the day differently.<\/p>\n

You could find fresh water.<\/p>\n

Build a shelter.<\/p>\n

Catch fish.<\/p>\n

Light a fire.<\/p>\n

Learn which plants are safe to eat.<\/p>\n

And, eventually, build a boat.<\/p>\n

You would finish the day with no money at all.<\/p>\n

But you would have something infinitely more valuable.<\/p>\n

You would have transformed the world around you to improve your well-being.<\/p>\n

That is the real economy.<\/p>\n

Money is not.<\/p>\n

In this economy, what matters is energy.<\/p>\n

Nobody can say with complete confidence what energy is. Physicists can describe it, measure it and predict how it behaves. But defining it is surprisingly difficult.<\/p>\n

Perhaps the simplest answer is this.<\/p>\n

Energy is the potential for change.<\/p>\n

But energy, by itself, achieves nothing.<\/p>\n

It has to be captured.<\/p>\n

Stored.<\/p>\n

Then crystallised into action, whether by finding the fresh water or building the boat.<\/p>\n

A battery is not the point.<\/p>\n

The light it powers is.<\/p>\n

A reservoir is not the point.<\/p>\n

The electricity it generates is.<\/p>\n

Energy matters because of the changes it makes possible.<\/p>\n

I wonder whether money is much the same.<\/p>\n

Money also represents the potential for change, but it, too, has to be captured.<\/p>\n

We create it. We save it. We lend it. We borrow it. We tax it. We invest it.<\/p>\n

But none of those things is the purpose.<\/p>\n

Money, like energy, only matters when it is crystallised into action.<\/p>\n

When it helps deliver a home.<\/p>\n

A school.<\/p>\n

A meal.<\/p>\n

A hospital.<\/p>\n

A person made well.<\/p>\n

A railway.<\/p>\n

A work of art.<\/p>\n

A cathedral.<\/p>\n

A business.<\/p>\n

A restored woodland.<\/p>\n

In other words, money matters because of the changes it makes possible.<\/p>\n

So why do we spend so much time celebrating the accumulation of money instead of the transformation it can create?<\/p>\n

The person on the desert island knows the answer instinctively.<\/p>\n

They do not survive by making money.<\/p>\n

They survive by creating value.<\/p>\n

They combine knowledge, imagination, labour, natural resources, and a plan to meet their needs and well-being.<\/p>\n

Money cannot do any of that.<\/p>\n

It can only help organise those activities when other people are present.<\/p>\n

That is why the greatest mistake an economy can make is to confuse money with value.<\/p>\n

Money is a means.<\/p>\n

Value is created when we transform the world in ways that allow people and nature to flourish.<\/p>\n

If we forget that, we begin to optimise the wrong thing.<\/p>\n

We protect money instead of protecting the conditions that allow people to live well.<\/p>\n

We celebrate wealth while neglecting health.<\/p>\n

We defend financial assets while allowing homes, communities and ecosystems to decay.<\/p>\n

We maximise the store of potential while failing to realise it.<\/p>\n

The result is a strange paradox.<\/p>\n

We become richer in money, but poorer in everything that money was supposed to make possible.<\/p>\n

The purpose of an economy is not to accumulate the potential for change.<\/p>\n

It is to turn that potential into the reality of well-being.<\/p>\n

It seems we do not understand this.<\/p>\n

More potential is in itself worthless.<\/p>\n

What matters is the realisation of all available potential.<\/p>\n

Unless economics achieves that goal, it fails.<\/p>\n","protected":false},"excerpt":{"rendered":"

For the background to this post, please read this companion piece.\u00a0 Imagine you are alone on a desert island. You have nothing. You have a
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,239],"tags":[],"class_list":["post-93354","post","type-post","status-publish","format-standard","hentry","category-economics","category-economics-of-hope"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/93354","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=93354"}],"version-history":[{"count":7,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/93354\/revisions"}],"predecessor-version":[{"id":93371,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/93354\/revisions\/93371"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=93354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=93354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=93354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}