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Many falsely believe that by simply producing more money or redistributing it, we would all suddenly have more wealth. It can come in multiple formats: it can be in the form of cash or alternative instruments, which we see more commonly today. Such instruments include debt and loan obligations. For instance, producing government loans that issue money to businesses creates new money as the entry on the central bank is produced and then replicated across other banks and financial institutions.

Money is simply a means of mapping obligations. It is a way of sending obligations through time. With barter, individuals trade goods and services at a point in time. The scenario can be extended using contracts and simple derivatives such as futures agreements. Here, one individual could trade a cow to be delivered on the same day as the agreement is concluded with another party accepting an obligation to deliver 10 sacks of barley six months later. …