With billions of dollars of Money flying around, and everyone looking worried even though so much money is meaningless, why are people predicting doom and gloom? Three facts about Money
1) Money is symbolic
It represents something. If it did not, we would sweep up leaves, to use as currency. The hairdressers and estate agents did just that, at the end of the Hitchhikers Guide to the Galaxy.
2) Money represents work
Money allows people to "store work". I help you plough your fields in March and you help me pick my grapes in September. In order to make sure that we keep our sides of the bargain, you give me some money in March and in September I give you some back.
3) Money no longer has a fixed value
My house costs two and half times as much money now, as when I bought it ten years ago. It has not grown an extra storey or two, it is still the same house, with the same number of rooms in roughly the same condition as when I bought it. My house has not changed, it is still "worth" the same, but the value of Money has gone down. There are "more pounds per house" than there were ten years ago.
The currency is unstable because prices change independently of worth, be it your house, my house or what we are paid.
The bargain of money as "stored work" depends on a stable currency. When the currency is unstable this happens: I work three days on your farm, but six months later you only work one day on my farm. This breaks down trust between people.
Speculators, who never do a hands turn, end up with vast amounts of other peoples' "stored work" because they learnt to play the Money Game. For them, money no longer represents work but counters they manipulate. Fine, if they played with their own counters. But this is not good for the rest of us, who lead traditional lives, earning a living and "storing the benefits of our work" for a rainy day, ie a pension. Money markets have become so complicated that Money has become a game best left to people who care about nothing else.
Those of us who use Money properly, as a way of storing and exchanging work, in order to put bread on the table, at present have no choice. But it may be time to think of alternative ways to store and exchange the value of our work.
What holds its value?
Property and Gold, but only when bought directly and owned outright.
Vouchers between trusted traders
Oil prices depends on how much is pumped out of the ground, rather than what oil costs to produce. Its price is largely speculative.
Wheat prices depend on supply, demand is relatively fixed, we can only eat so much bread but the amount grown and harvested is not so constant.
Savings accounts depend on whether Money itself has any value.
Where next? The lesson from this current financial crisis is that Money has become a game that few people can follow. Warren Buffet is finds it too much and he has a personal fortune or Gross National Product (GNP) larger than some small countries.
It is time for a new Money, one that real people can use for the purpose it was intended, ie. to store the value of work. Let the big boys play with their counters but the rest of us need to get on with our lives.
Copyright Dr Liz Miller 2008
1) Money is symbolic
It represents something. If it did not, we would sweep up leaves, to use as currency. The hairdressers and estate agents did just that, at the end of the Hitchhikers Guide to the Galaxy.
2) Money represents work
Money allows people to "store work". I help you plough your fields in March and you help me pick my grapes in September. In order to make sure that we keep our sides of the bargain, you give me some money in March and in September I give you some back.
3) Money no longer has a fixed value
My house costs two and half times as much money now, as when I bought it ten years ago. It has not grown an extra storey or two, it is still the same house, with the same number of rooms in roughly the same condition as when I bought it. My house has not changed, it is still "worth" the same, but the value of Money has gone down. There are "more pounds per house" than there were ten years ago.
The currency is unstable because prices change independently of worth, be it your house, my house or what we are paid.
The bargain of money as "stored work" depends on a stable currency. When the currency is unstable this happens: I work three days on your farm, but six months later you only work one day on my farm. This breaks down trust between people.
Speculators, who never do a hands turn, end up with vast amounts of other peoples' "stored work" because they learnt to play the Money Game. For them, money no longer represents work but counters they manipulate. Fine, if they played with their own counters. But this is not good for the rest of us, who lead traditional lives, earning a living and "storing the benefits of our work" for a rainy day, ie a pension. Money markets have become so complicated that Money has become a game best left to people who care about nothing else.
Those of us who use Money properly, as a way of storing and exchanging work, in order to put bread on the table, at present have no choice. But it may be time to think of alternative ways to store and exchange the value of our work.
What holds its value?
Property and Gold, but only when bought directly and owned outright.
Vouchers between trusted traders
Oil prices depends on how much is pumped out of the ground, rather than what oil costs to produce. Its price is largely speculative.
Wheat prices depend on supply, demand is relatively fixed, we can only eat so much bread but the amount grown and harvested is not so constant.
Savings accounts depend on whether Money itself has any value.
Where next? The lesson from this current financial crisis is that Money has become a game that few people can follow. Warren Buffet is finds it too much and he has a personal fortune or Gross National Product (GNP) larger than some small countries.
It is time for a new Money, one that real people can use for the purpose it was intended, ie. to store the value of work. Let the big boys play with their counters but the rest of us need to get on with our lives.
Copyright Dr Liz Miller 2008
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