What is Money, Anyway?

The philosopher in me says it’s time for us to have a little chat about money. No, I’m not talking about how much you have or budgets or the economy. I’m not interested in anything as easy as that. I was wondering whether or not you have ever stopped to consider what money actually is? And again, I don’t mean paper, or gold or anything like that. I mean, have you ever thought about what it represents? More importantly, have you thought about how it is derived? I would venture to say you haven’t. In fact, most people probably just take it for granted. But I bet a short little chat about money and how it is derived from natural rights and natural law might help you to look at it in a whole new light. So, what do you say: shall we have a go at it?

OK, so what is your most fundamental natural right: that right that is yours by your existence, and that which only you can claim and exercise? I would argue that it is your free will, or conscience. No one can force you to change your mind or bend your will. Even if they use drugs, they have not changed your will as much as they have incapacitated it. So, from the right to your free will, you claim a right to your life, as your life is necessary to exercise your will. Your right to life gives you a right to your body, which gives you a right to your labor, and from your right to labor is derived the right to personal, moveable property. In this case, by consciously exerting your will to your labor to make property necessary to sustain your life, you have imparted a natural right to that property – so long as you have not trespassed against another’s rights in acquiring it.

Next, we have the right to contract. In other words, we can exercise our free will by agreeing to enter into a contract with another person. Most often, we contract with each other to obtain goods and services. In its most primitive form, labor is the only means with which we have to barter with each other. However, as society grows more complex and we start to specialize in our labor, it becomes more and more difficult for the farmer to barter with the black smith to obtain music or art from a third party. Thus, mankind developed the concept of money. Thus, money is nothing more than a convenient representation of our labor that makes it easier for us to enter into more complex contracts with each other.

Now, before anyone goes and tries to make a tortured argument that, at some level, accumulated wealth starts to represent slavery: don’t. That argument can be made but it cannot be won. However, the argument that welfare is slavery and theft can be. You see, if I am forced to pay a disproportionate amount of my labor (through taxes) to sustain others who contribute no labor (i.e. taxes) to society, yet those non-contributors can vote to make me work even more, that is both slavery and theft at the same time. You cannot claim that it is justified because I have more money because that money is actually a representation of my labor, and you cannot argue I have a duty to work more than you for your sustenance. Nor can you argue I have more labor than others as we all have 24 hours in every day, therefore, we all have the equivalent amount of labor. How we employ it is what differentiates us, and the moment we start justifying the forced coercion of my labor to the benefit of yourself, you have entered into the area of slavery. If you use our mutual government to force my slavery, then you have also entered the area of theft. Incidentally, this is exactly what Galt is fighting against in Atlas Shrugged: theft and slavery.

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5 thoughts on “What is Money, Anyway?

  1. This coincides with one of my theories.

    You have a right to your life. Your life is made of time. You work, exchange your time, for property (money).

    Your money represents your life as you exchanged your finite time of life for the property, and therefore is your life. Why should one person be required to hand over more of his life than others.

    Why should some be allowed to take others life while giving nothing in exchange?

  2. Money is also a measure of Relative value between two Parties in an exchange ….. your “work”, your “time exchanged” has value to you and can also have two different values to two different people and thus be exchaned for different amounts. This is of course based on Freedom of Exchange and to exchange based on everyone’s free will to “pursue happiness” in their own measure.

    Where there is no real Liberty, there is no true Freedom of exchange based on individual value.

  3. To pursue the “money” idea further: All money is fiat money; it’s worth something because we all agree that it’s worth money.

    To someone who hasn’t thought too deeply about it, money is just there. It’s always been money. It’s like air, or ground, or the sun coming up every morning. The implication is that we’ve always agreed that it’s worth something, and that’s not the case.

    Money developed as the systems of trade and barter became more sophisticated. Food, skins, booze, weapons, sex…then the shiny stuff…gold. Gold became valuable because of its rarity and its unusual metallic properties (malleability, doesn’t rust), so gold became a symbol for stuff…food, skins, booze, weapons, sex…

    But gold is heavy, and pilgrims can be robbed on the road to Jerusalem.

    So those nice fellers escorting the pilgrims said, “Hey, we have weapons. We’ll take care of your gold so nobody steals it on your trip. Here’s a piece of paper that says how much gold we will give you back.”

    And voila, gold backed paper money is born. (Okay, not necessarily historically accurate, but it illustrates the evolution of money, and who really cares about Truth these days anyway?)

    I used to work at the Federal Reserve Bank in St. Louis (I learned a lot there about who I didn’t want to be, but I digress). One of the most interesting days I had there as an internal auditor was the day I helped with a cash count.

    As part of the Cash Audit, we had teams go into the vault to count cash. The teams consisted of two partners, always working in “presence and view” of each other so that if one did anything shady, the other saw. Stealing would require collusion, in other words. We were observed by a guard, who watched two teams at once.

    Being in the vault is a weird experience. If you’ve been in your bank’s safe deposit vault, you can get an idea of what it feels like on a much smaller scale. The door, shiny brushed stainless steel several feet thick moved effortlessly on giant hinges. The lock included a three foot wheel, again, brushed stainless steel. There were cages with tables. Steel shelves with boxes that looked like old bank records, until you looked closer.

    The smell? Sniff a dollar bill. Take that, multiply it by ten million. Add just a piquant hint of Good Will store, blood and cocaine. Then add the smell of steel, cleaning products, ink and paper (for there were new bills to count, as well).

    After our initial excitement at the idea of being around so much “money” we settled down to work, at first counting hundreds. Boxes of used hundreds. Strap and bundle counts. We’d pick one bundle, count it as a sample, and then count the straps in the box. So we’re not physically counting ALL the money, just samples. And it’s dirty.

    Did you know that you can fit half a million dollars in hundreds in a box on your arm, between your elbow and your wrist? They weigh less than an average hard back book.

    At some point in the process, it was no longer money. It was a task, and I was fiddling with little pieces of paper. Not a lot different, actually, than when I restocked the cooler at 7-Eleven with beer and soda, or refilled the candy aisle.

    Then we finished the “used” money and started on the new. BEP packs (Bureau of Printing and Engraving) of new money were stacked on pallets, shrink wrapped. We opened one sample and counted the bundles. The rest, we just counted the shrink wrapped packs. I can’t remember if they were ones, fives or tens, but they were about 12″ x 12″ and weighed ten or twelve pounds each. Now it’s really like 7-Eleven, tossing around cases of beer.

    By the time we were finished (our team counted about $800 million), it was just a giant pain in the hiney. It wasn’t money any more, it was just a big deal where you’re locked in a vault for several hours, can’t drink coffee, can’t pee, getting your hands dirty.

    But we’ve all agreed it’s money, and someone had to count it. When we leave the vault, it magically becomes money again to us. And it makes a great story to tell. :)

    • That is a GREAT story Sally …. Just imagine for comparison a Half million $$$ in Candy at the 7-11….:- ))……NOW we’re talking !

      One observation……You are correct when U say ..”But we’ve all agreed it’s money..”
      But more and more people are becoming aware that the actual Truth is that…” It’s ONLY money because they (The Central Bankers) have TOLD us it is Money…”……….In other words the tacit Agreement assumed is starting to come apart at the seams……and that’s a good thing.

      • Thanks! You’re right about the fact that it’s becoming fiat money because the central bank tells us it’s money; that’s why the trillion dollar coin discussion was both amusing and horrifying.

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