Dollar Dollar Bills Y’all : Do we seriously need the “root of all evil”?
Short answer -
Yes. And stop calling it that.
Long answer -
Money… Either we want it or don’t, one thing we can all agree on is that everyone has very strong opinions and emotions about it. On one end, people defraud, rob, or even kill over it. On the other end, people get so fed up with it and rid all the earthly possessions to embrace buddhism or similar religions. Love it or hate it, no matter how hard we try, we cannot get away from money. And we shouldn’t either. Let’s discuss why.
If you think I’m wrong and just don’t want to continue reading further, please acknowledge what Mahatma Gandhi, the greatest minimalist and one of the ultimate human beings ever lived, said about it -
Capital as such is not evil; it is its wrong use that is evil. Capital in some form or other will always be needed.
— Mahatma Gandhi in Harijan 28 July 1940
How and Why money came about?
Money predates even before our written history. So we don’t know who exactly invented it. But historians strongly believe that money as a token was used as early as 5,000 BC.
Before then, the world was a simpler place. Human kind was not well connected tribe to tribe. Food or primary commodities production and consumption was very local. People shared by bartering one commodity for another.
However, as the societies grew and interactions between societies became stronger, the bartering system didn’t seem to scale or hold up well. Transportation and storage of commodities was difficult, and also most commodities would expire and perish in a limited time. There was no simpler way to store value in a persistent form.
The only substance that did not have the above problem was precious metal. They were extremely rare and valuable, thus the value of large amounts of other commodities could be represented by a very small amount of metal which in turn was easily transportable, easily storable and most importantly non-degradable. So people started using precious metal as an intermediary commodity for trading.
That was how the very first form of coin came about, and the concept of money born.
Why do we still need money?
Times have changed since the ancient times where a coin’s value is determined only by its material value.
Because the countries needed to keep its wealth inside and in control of the government, we invented a new form of money — Representative Money. The government keeps all the precious metal (usually Gold) secured and issues a certified tokens to be used on behalf of that metal. This currency have zero value outside of the government so it is not possible to transfer wealth outside, without the consent from them. Even though the token have no value universally, one could argue that since the token is tightly bound to a precious metal, the intrinsic value is still there.
However, due to economic instabilities and constraints of growth, we took another giant leap of the definition of money. Since late 1900s, every nation in the world moved away from Representative Currency to using Fiat Currency. Fiat currency is not tied to any precious metal. Inside a country, it has a value just because the government says it has value, and because government defines its value. Between countries, its value is define by the stability of the country, and the mutual agreement of value between the two parties.
So how can we comfortably say that those papers in your wallet or few digits in your bank account has value?
Although the circumstances have been drastically changed and our economy evolved leaps and bounds, the fundamental need of money has never changed, which is “A persistent token of value”. As long as the society agrees on the token and its value, it doesn’t matter if it is a gold coin or a digit in your bank account or even few bytes in a blockchain network.
Money was first invented as a better way to trade instead of bartering. Even after 7,000 years, that hasn’t changed. As long as a currency can be used for trading in your society, every digit in your bank account has value.
So, money is not about some physical value of a commodity anymore. It’s about the value of a society. I think that’s a way better representation of value than some cold metal which completely disregards the value of potential, the value of stability, and the value of growth.
How not to hate money
Even we understand the fundamental appeal, it’s hard not to hate money seeing all the depressions, hunger, hatred, crime and many other issue caused just because of it. Sometimes I also think that when I’m working hours and hours just to make ends meet. But what I realised is this. Money is just a mere token. You cannot hate money without hating what it represents. Value.
One thought experiment you can follow to wrap your head around money is this.
Imagine you are a farmer in ancient world where bartering was still the hot new thing. A simpler time. You allocate your time, capability, and dedication to feed others and in return you get something valuable from each of them. If the blacksmith wants some wheat, all good. Give me a hoe and you can take two pounds of wheat.
How about a Fletcher. Oh oh.. I don’t know anything about bows. How many pounds of wheat should I give for one bow. Someone who knows about both has to intervene and value the products. What if we give “value points” for each product? So a bow can have 3 value points and a pound of wheat can have 1 value point. The society can decide on the value points for each product and service. Then I’d know exactly how much wheat I should give for a bow. Everything is back in place.
But we have another issue. I’m a farmer. I don’t need bows. Fletcher needs wheat from me, I need protection from a hunter, and the hunter is the one who might need the bow. We need to find a better way of multilateral trading. How about this? Since we have the value system, we can substitute a physical token for a value point. We can use the token for trading instead of bartering. The fletcher will get 3 tokens from the hunter, and use those tokens to get wheat from me. That way I won’t need to worry about the bow at all.
Wait a minute. Didn’t we describe currency?
You see? Even after taking a very simple and isolated use case of our economic progression, we naturally arrived at money. That’s how fundamental and necessary money is.
Money is not the root of all evil and it’s not the minion of devil. Money is just a token of value. Nothing more. Nothing less.
Sooner as we can agree on that, sooner we can understand — “getting rich” and “providing value to the society” are the same damn thing.
You can use a fountain pen to write a poem or to stab someone with it. Just like that, money is just a tool we developed to aid the society. How it’s been used is completely up to each individual.
Rather than banning the fountain pens from the world, or trying to find a utopian society where fountain pens are not needed, let’s learn to use it intelligently and sensibly.
That way everyone can come and contribute to generate wealth for the entire world…
