Money – an Antinomy

Thesis: Money makes the world go round.

In our world, money is the measure of all things.

It is useful, we are told, by the economic sages, as a store of value and medium of exchange. Without the institution of money we would have to rely on supplying our own needs or bartering real goods with each other. This raises problems of coordination of supply and demand, and of storage of stuff. How do I find the people who produce what I need and want what I can produce? If no such people exist, how do I find the time to swap my produce for something that I can swap again for what I want? How long a chain of bartering is feasible? And where do I store the intervening (possibly perishable) goods between one link and the next? This presents a daunting and impossibly inefficient picture. But along comes money – something we all agree to treat as a universal solvent of value, easy to swap for anything, easy to store without risk of decay, requiring no complicated deliberate coordination of a network of production and exchange. As long as we all trust each other to accept this medium, it is a fantastic social benefit.

And once it exists it can be used to do more than just enable exchange between different people in different places. It can travel through time. We can save it up for the future, to enable us to live once we can no longer produce anything to swap for what we need.

Can we imagine a world without money? That seems very hard to do.

Antithesis: Money is the root of all evil.

Money increases the possibility of extreme inequality in resources between people (and peoples). The accumulation of wealth in vast amounts is much easier in practice when that wealth can be stored as gold in a bank vault or even better as digital records in a virtual vault, rather than in the form of goods, land, buildings, etc., which take effort to maintain and make use of. And once inequality in possession of wealth exists, it gives the wealthy people power over the rest. Unequal wealth is, at bottom, a tool of power over other people. When money is the measure of all things, we all need access to it to live, so those who control the money can control the people who need it. (If we were all equally wealthy, wealth would not give us power over each other. In that case it probably would make little sense to talk of wealthy individuals; instead society as a whole would be wealthy.)

With accumulated inequality, money becomes, instead of a mere medium of exchange or a convenient stand-in for valued things, a bestower of power and worthiness on its owners and of value on what can be bought. People without money come to be seen as valueless, because they lack the fundamental economic power – purchasing power. And things that cannot be bought and sold, like ecosystems and kindness, cannot be valued. The economic magic of the invisible hand that supposedly adjusts supply and demand to create an ideal equilibrium ignores the needs of the poor and the non-human, because those ‘demands’ are not expressed in monetary terms. So we see desperate attempts to protect the environment by ‘monetizing’ its ‘services’ or creating a market in carbon emissions. Meanwhile, inequality in power grows, as the institutions of government, meant to serve us all, are captured by the power of money over information, over political parties, over elected decision-makers.

To those that have shall be given…

 

But does the usefulness of money, the apparently essential services it provides, require that such unequal wealth must be possible? Can the concept of a medium of exchange be separated from that of a store of value that can be accumulated so that some people end up holding vastly more than others? Can the antinomy be resolved? Universal basic income anyone?

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