What is money?
We earn money, we chase it, desire it, save it or spend too much of it, and yet we rarely wonder what it is? It is not a real thing, you can not eat it, it has no intrinsic value and that is one of it's virtues, it is valuable because it has no use except as a medium of exchange which helps to keeps it's value relatively stable. When we used gold it felt real but it was far more volatile, as gold has other uses, like making wedding rings, so if there was a demand for gold as material, it would inflate and deflate the demand for gold in addition to it's use as a currency.
Which is an old but beautiful term for money, it describes what money should do to be effective which is flow like the currents of a river. It flows from one person to the next in exchange for work that has been done, that is what money represents the work that you have done. You are paid the value of that work in the form of money and then you use that stored work to pay for the work of others. It enables the slicing of your work into usable and exchangeable units, if you produce needles day in and day out, imagine having to find the person who wants to swap a bag of carrots for a thousand needles. It would be hard and time consuming to find such a person, if you were able to at all, it would probably take you longer to swap them than it did to make them. What money along with an honest and open market does is remove the swapping element into a decentralized exchange that we call money.
We use money as an exchange unit, that is it's purpose, it is a tool to store work and exchange it later for something you want, and that is the important part what you can exchange it for. We can become focused on the money part rather than the thing we actually want, which can limit our imagination in getting what we want. If all your attention is on getting the money to pay for what you want or in most cases we end up focused on our lack of money, it blocks our minds and possibly the universe in giving us what we really wants. When we are free to come up with any solution to getting that thing that we want, we open up a thousand paths to where we want to go, however if we think that money is the only way to get there, it will be the only way the mind will think of to get to that point.
Which is manifestly untrue for anything that you might desire, if you wanted to go to India, you might think that the only way you can go there is if you pay for a high class, all inclusive tour of the country, in which case the only way to do what you wanted would be to save up for it. This would shut the doors on every other way of getting the same effect without money, you could after all get a job taking rich person on the tour or change your career to being a digital nomad and slow travel your way there, you could win a competition, sell something, arrange a house swap, the list goes on and is only limited by your openness to the alternatives.
It is better to detach from your need for money and replace it with a respect for what an incredible tool it is, it enables not just the exchange of work but it also allows work to be done by other sources than your or others labour. It is money that helps us to store our work in the form of machines and houses that does work for us instead of us having to work ourselves to supply our needs. If there was no money we would not have trains, vacuum cleaner and washing machines, all things that save us time. The manufacturers only make them because we paid them money, money was spent on the robots and buildings that make up the factory that produces them virtually without the need for any labour at all. It is best to think of the factories as being stored work, you build it, buy the bricks that were made elsewhere, and you do so as you think you can make sell enough washing machines for you to get more money back again. All of which would be impossible without money and trade.
Or course it can feel unfair if one person has money and another does not, and it can feel even worse when a robot takes your job and leaves you without a means to earn money. However it is worth thinking about the world we wish to live in, do we want to live in a world where we all work twelve hours a day just to produce enough food to eat and pay the rent with fish, or would we prefer a world where our needs are produced by robots and we do the value added work to help each other. The good news is we already know how to solve this problem, as our capital grows and overwhelms the labour market for producing the necessary goods for survival, it's value will increase in proportion to the work it can do and the stored work that has been put into it. The stored value will be so huge that governments will be able to own a proportion of that wealth (without distorting the market) on behalf of the people and pay out an Universal basic income to every citizen of the world.
It will not make the world a fair and equal place, but it will mean that everyone's demand for the basics in life is provided for, and that will avoid the worst of the disasters that could befall us in a world without the need for full employment of labour. The market only fails when there is not effective demand, the poorest billion people are not being let down by the market, it is the lack of effective demand that is the problem, so perhaps the time to start basic income is now. If everyone received five hundred dollars a year now, a billion people would be lifted out of poverty and we could start the climb towards a real basic income of twelve thousands dollars a year. That is a future economy that I can get excited about, that is a world that I want to live in and I am happy to help build. Money and free trade can be the most powerful tools will have for growing the economy that in turn fuels science, technology and the great problem solving machine that there is the over seven billion members of humanity, give us the tools and we can do anything.
