What? Of course money is evil, it’s the root of ALL evil! In fact, money is one of the most important inventions behind the rise of civilization. And a pretty good case could be made that civilization would not be possible without it. Money is good, just like the wheel is good.
These are big claims and the average world citizen would probably think them a bit alien. I believe that this is because most people are confused about what money is. People know they need it, but generally don’t like that they need it. They see lots of people doing bad things to get it, but generally want it themselves. When they have it they know they have to protect it, but people who have a lot of it are often a-holes.
Like I said, money is an invention. Ask yourself, if you were around before money existed how would you obtain an item you needed? Let’s create a scenario; let’s say you need clay pot? You would have two options, you could make the pot yourself -- which would require that you have the necessary skill, material, and tools -- or you could try and convince someone else who knew how to make pots to make one for you. The first method is really only a special case because even if you could make your own pot, there are other things you wouldn’t be able to make for yourself. On the other hand, the second method has problems as well. How are you going to convince the pot maker to make you a pot? Again there are limited options: you could threaten her (or steal from her); you could appeal to her good nature; or you could barter with her.
But the last option is really the only option that works in the long term. Think about it, if the pot maker were a giving person you could maybe convince her to make you a pot once or twice, but it would get old fast. And if you used threats or theft, that may work once or twice but soon you’d find yourself being chased out of town (unless you’re the government – but that’s a different story). Invariable, you’d find that at some point you’d have to start trading.
But what are you going to trade with? You’d have to find something that the pot maker wants and values as much as the time, energy, and material that she puts into making a pot; but the odds are that you won’t have anything that you are willing to give up that fits the bill. You could try working for it -– give up some of your time and energy -- but the pot maker may not need this either. So what do you do? You’d probably have to go and find someone else who has something that the pot maker wants and barter with her first - but again, the odds are that she won’t want anything you are willing to give up. This is a problem; the web of transactions necessary to procure a pot could become pretty complicated.
So how did people get along before money? In a sense they didn’t, because they already had it. Let’s say that you do happen to have something of value to trade with, lets say you have a bronze axe. In fact, let’s say you know how to make bronze axes. Now the pot maker probably already has a bronze axe and won’t be too keen on trading a pot or two just to get another one, but she knows that a bronze axe is fairly valuable and something that other people may want. Even though she doesn’t need it herself; she would probably be able to trade it later for something she does want. To her the bronze axe is not an axe but a store of value. This is a key aspect of money.
But there’s still a problem. The axe takes more time, skill and effort to make than a pot and there are fewer of them around. You probably wouldn’t be too happy trading one of your prized axes for a single pot, an axe may be worth many pots. But let’s say that you want more than just a pot, you also want some grain and some beer as well. And let’s say that, all together, it adds up to the value of a single axe. But these things likely come from different vendors so how are you going to work out the trades? Obviously you can’t trade pieces of an axe so what do you do? Well, what you do is realize that the bronze ingots that you use to make your axes are used by many others and are recognized by most people as having value. So instead of offering to trade an axe, you offer to trade some of your ingots for the pot. And because the pot maker knows that she can probably trade ingots with a bunch of other craftsmen, the two of you make a deal. You’ve invented money!
That’s what money is. It’s a portable tradable store of value that is recognized as such by a community of people and its’ role is to lubricate the transfer of value between people. And the value that money stores is created by someone’s skill, work, and time (and risk - but I’m ignoring risk in this post). At the root, it’s as simple as that. Without it, most of today’s professions would be impossible. Without it, I would have to trade my programming skills for food and how many farmers need programs written for them! The friction of trading without money alone would put a sever limit on just how civilized a culture could become.
So why do a lot of people think that money is evil? I believe the reason is that while money itself is very good, it makes it much easier for evil people to steal the value that others create. A thief would be much less tempted to steal a pot – a big item carrying little value -– than to steal a bag of ingots. Most of the evil surrounding money has to do with fraud and theft in one form or another. And the possession of a great deal of money, especially when it is obtained without providing any value in return (e.g. through inheritance), does seem to encourage bad behavior in people with poor character – but that’s the topic of a different post.
If you are an honest person, then money to you should be about the value that you yourself can create with your time, effort, and skill. If you are not making much money, then one of these three elements is lacking. If you are making money without providing time, effort, and skill than you are co-opting someone else’s time, effort, and skill. Survival has always required the application of time, effort, and skill and our survival became much easier when we gained the ability to trade the value we create using money.
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