Money is Points; Prices are Point Rewards Attached by People to Activities

Sometimes we tell ourselves that money is the physical incarnation of value in the universe. This does not make any sense.

It does not make sense to think of money as a something of physical value. It is actually a scoring system.

Imagine you are in kindergarten. Your teacher decides to reward stars for good behavior. If you arrive on time to class, you get 2 stars. If you sit quietly through announcements, you get one star.

I hate to break it to you, but this is EXACTLY how money works, even for adults. Point rewards are attached to activities by whoever has an interest in encouraging that behavior. Sometimes there are even rewards offered in exchange for earned points, but that’s not strictly necessary.

The way our points are managed in a modern economy is both clever and sophisticated. Government doesn’t directly specify all the ways you can earn points. Instead it creates basic rules for earning and trading points, and only offers some points directly. It relies on the rest of us to fill in the structure of this game. Guess what? You can earn a lot of points by creating rules that fit within the government’s framework of rules for using points.

Points are an incredibly powerful human motivator. Carnivals, athletic contests, board games, and online communities all use points to motivate and direct human activities.

To me, it seems like the power of points comes from our thirst for information as humans. It is built into our nature based on our need to survive. Survival is contigent on our ability to acquire resources and information is critical to how humans acquire and manage resources. Whatever information we can glean about people or our environment is incredibly important. Whatever information we can signal to others, about our fitness, skills, or wellbeing, increases our authority and influence. Points are information, and humans are information addicts.