The Nature of Money

I have often wondered if civilization as we know it is merely a series of thought experiments continued so long we believe it is real. Rokhsor Yusufi has given me an opportunity to explore this possibility:

People are so obsessed with money that it is slowly taking over the world. Money is nothing but paper so I do not see why we need to ruin our bodies and waste our time trying to bring green sheets home to your family. It is not as if I do not enjoy a bundle of money now and then, but I do not think it is necessary to base our lives on how much of it we have.

I think this is a very valid point of view. The way people center their lives around money is an issue that interests me greatly. There are several arguments that could be made against the excessive importance of money in our society, but the most convincing (in my opinion) is the nature of money itself.

You see, despite what people seem to believe, a dollar bill is a piece of paper. A quarter is a disc of metal. It has value only because someone, at some point in history, decided it was worth something. The worth of ten dollars exists entirely in our heads--it is us who decide that it’s worth a certain amount of food or whatever it is you’re trying to buy. If you give a dollar bill to a dog, the dog will not go out and buy a bag of chips. It’ll simply stare in confusion or chew it up. Green bits of paper do not have inherent value. They’re worth the effort put into making an object because we say they are.

An interesting fact, if memory serves, is that the objects originally used as a ‘currency’ were not thought of in the same way our money is today. They were counters, objects representative of a certain number of animals or other valuable possessions. The counters had no inherent worth of their own; they simply were used to show that a person owned a certain amount of something. If you showed a certain amount of a certain type of counter to someone and the counter represented, say, a cow, that might mean that you owned the number of cows represented by the counter. But if you just had a bunch of counters in your pocket and didn't actually own any of the things they stood for, it probably wouldn't do much for you.

At some point the value of currency was no longer assigned to the objects it represented, but the currency itself. There is no longer any kind of barter system, which was also used in the past: rather than trading an item of value for another item of value, I give you some sheets of paper and a few bits of metal in exchange for my lunch.

So why are these green papers, these metal discs, so important to us? Why are they the source of so much misery as well as happiness? Why do we value them so highly? We can't eat them or drink them, and they won't protect us from the weather or wild animals or people. Who decided, innumerable years ago, that they were so very indispensable?