Money started out as a token to represent value. Men and women would do work, like growing potatoes, catching fish, building houses etc and trade the product of their labour with each other.
Money was introduced as a REPRESENTATION of that work and effort. It acted as a store of value to be able to swap/exchange the effort expended in digging potatoes at one time of the year with other products (product of one's labour).
Perhaps one of the biggest misconceptions today is that the TOKEN is valuable instead of a REPRESENTATION of value. The origin of the value is the energy and effort expended by those who produce. Production need not be limited to things... information is valuable to some.
“Value” is that which one acts to gain and/or keep. The concept “value” is not a primary; it presupposes an answer to the question: of value to whom and for what? It presupposes an entity capable of acting to achieve a goal in the face of an alternative. Where no alternative exists, no goals and no values are possible. Ayn Rand
The externalisation of value into an object, whether that be gold or paper, is the same. If the origin of the value is internal, that is it is comes from one's thought and action, to externalise that value is to disassociate thought and action from value. Warning !! Warning !! This is dangerous territory and the subject for much deeper analysis.
For now, consider what happens when the TOKEN used as money is substituted from a rare metal, that's hard to fake, with a readily produced material like... paper or electronic keystrokes! Take a quick look into the properties of money... from the viewpoint of it as a token.
Properties of Money
These are the commonly recognised properties for 'something' to be money: Source
- Portable: It should be easy to carry around, transport and store.
- Durable: Contrast gold and silver to paper or plastic.
- Divisible: Easily divisible into equal units.
- Sufficiently rare: To not require a large amount to be carried around.
- Fungible: Interchangeable with any other unit. Not diamonds which are unique.
- Non-essential for consumption: Not oil consumed as an energy source.
- Easily identifiable: Money should be easy to detect and difficult to counterfeit.
- A store of value: retain its value over time. 2ooo years ago, a one once gold coin could by a nice toga and a pair of sandals. Today, once ounce of gold can buy a nice suit and a pair of shoes. Contrast that with the US dollar, which has lost 96% of its value since the inception of the Federal Reserve Bank in 1914.
Watch this 5 minute video and contrast how easy it is to create today's 'money' out of thin air... Although I'll dig deeper into that concept in a future article. [Edit: Money Out Of THICK Air]
Is today's money what you'd call a reliable token to be used as money?
Questions to Ponder
- Can your bank provide prior rights, title and ownership to that money it 'loaned' you?
- Did they have the money before you walked in the door?
- Was the money created on the spot? Or at least with your involvement?
- If it was created on the spot - by what right?
- If the ledger balances - why do you need to make repayments?
- Is Fractional Reserve Banking a smokescreen for this practice of money out of thin air?
We are taught at an early age that interest is charged on the premise that the bank does not have access to it's own money for the time they lend it to you. If money is created on the spot - can interest be charged if the bank never 'lost' the opportunity to invest money it never had?
Only In America? - Wrong!
Think that Australia is different? There's no connection to the Federal Reserve Bank in the US? Consider the following: