A Fundamental Truth About Money
We’ve all heard sayings like “money makes the world go round” or “time is money”. These sayings aren’t meant literally, of course. Instead, they describe the fact that money plays a central role in modern day human life. It is one of the top concerns of most people, as well as all governments. If you’re like me, you get up most mornings at a certain time because you have to go to work and you do that because you need to make money to pay for things like food, clothing and a roof over your head. But have you ever really stopped to think about what money actually is?
Money Defined
A good place to start in considering this question is to look up the definition of the term “money”. According to Google, money is defined as “a current medium of exchange in the form of coins and banknotes” or just “coins and banknotes collectively.” That’s not quite accurate, though, because money is not limited to just coins and banknotes. As a matter of fact, only a small percentage of the U.S. money supply, as well as that of other nations, exists as physical paper bills and metal coins. The majority exists in digital format, like in your checking or savings account.
Furthermore, money isn’t just limited to dollar bills, euros, rubles, etc. The key phrase in the Google definition of money above is that money is “a medium of exchange”. That medium can be anything people agree it is. Money has taken the form of feathers, sticks, and salt, among other things. Why is that possible?
Money is Imaginary
Well, that’s the fundamental truth about money that is seldom discussed. The reason why money can take just about any form people want is because money isn’t real. Money is an idea that only exists in our heads. We may use physical things, like pieces of paper, metal coins, wooden sticks or entries in a database to represent money. But ultimately, the only reason any of these things has value is because enough people agree that it does. That even goes for the almighty dollar.
To illustrate the point, let’s compare a dollar bill to a stack of play money. Both are man-made. Both are printed into existence. And both provide a medium of exchange under a certain set of rules. But it’s a safe bet that, given the choice between the two, people are going to choose the dollar bill over the play money.
But if you offered the same choice to your dog, it’s anybody’s guess which one he will choose, if he would bother to choose at all. The dog’s behavior in this scenario won’t likely change if you replace one or the other with gold coins or bitcoin. Now, some of you might be thinking that not all money is the same. I know there’s a whole discussion we could get into about money versus currency or things like fiat currency, fractional reserve banking and central banking.
All of these are important subjects worthy of lengthy discussion. But there is still this one fundamental, underlying truth regardless of what form of money you are talking about. The concept of money is still just that. A concept. It only exists in the minds of people. It is not real.
A System of Control
Considering how much power money has over us individually and collectively, this is an important point to keep in mind. Make no mistake, there are people who understand this fact very well and use it to control, well, all of us really. Who these people are and how they use the this fact to their advantage are topics that warrant more attention than can be provided in a short blog post. But right now, I would just like you to consider the relationship of these people with those who never stop to consider the fact that money isn’t real. And finally, consider their relationship to yourself.
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Resources:
- Play money photo purchased from BigStockPhoto.com
- Google search for “money defined”
- Money Matters: The Tally Stick System
