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> Wealth is a measure of how much stuff people have that they actually value for its own sake. Food, housing, clothing, shelter, and artwork, are all examples o

> Wealth is a measure of how much stuff people have that they actually value for its own sake. Food, housing, clothing, shelter, and artwork, are all examples of wealth. Money, by way of contrast, is merely an accounting mechanism that humans have invented in order to facilitate trade. I think this is pretty accurate, except the description of money as "merely" an accounting mechanism. Trade is facilitated through a variety of accounting mechanisms, and money is obviously an item in this list insofar as it is the unit of account for economic entities that maintain accounting books. However, money is also a concrete economic good in and of itself, subject to forces of supply and demand much like any other good. The author correctly states that wealth is derived from subjective valuation, so money could be seen as something like the "limit" (categorically) of wealth, which aggregates the value judgments over all (person x good) combinations.

mojomark 5y ago
> > However, money is also a concrete economic good in and of itself. Just playing devil's advocate... if you're stranded on an deserted island with a suitcase full of US $100 bills or perhaps flash drives with bitcoin in them, does that provide significant concrete value to you in and of itself? Same question, but this time you have "food, housing, clothing, shelter, or artwork (e.g. some songs loaded in your out of range phone)"?
- cortesoft 5y ago
  There are a lot of concrete economic goods that don't have value on a deserted island. Iron ore, gold, or really any natural resource that requires a lot of processing will be useless on a deserted island. In fact, the entire point of the "move things" category in the article is that things have different value in different places.
  - MichaelZuo 5y ago
    Gold surely has value as it’s the most malleable of the metals. Having a gold cooking pot is a vast increase in wealth on a deserted island compared to no cooking pot. If you put a bit of imagination a lot of random things can have value in an extreme enough situation.
- imtringued 5y ago
  As I mentioned, for your $100 bill there is a liability attached to the $100 bill. The piece of paper itself is worthless. The problem is that you cannot reach any of the people who are liable and therefore even its notional value has no meaning to you.
imtringued 5y ago
>However, money is also a concrete economic good in and of itself, subject to forces of supply and demand much like any other good. There is an infinite supply of money out there for very obvious reasons. The USD is primarily a unit of account. The store of value function has been delegated to debt. The reason why debt stores values is that people promise to provide value in the future. Every asset meaning every dollar has to be backed by a liability meaning a dollar of debt. The reason for that is quite simple. The dollar has no inherent value, therefore the net worth of the dollar must be 0. The medium of exchange function isn't provided by only the dollar itself anymore. Nowadays people use a wide variety of payment services ranging from bank accounts and credit cards to Paypal and the lightning network and of course, the good old dollar bill is providing a offline payment service. The supply of money is unbounded because the amount of promises we make and the economy we can create in the process is unbounded. What is in short supply is labor. Simply saving money creates no net real wealth in the economy because the money that has to be saved has to be created first through debt. Instead, net wealth is created in the real economy by the borrower who is using the money for an investment. If there aren't any borrowers willing to get into debt (=demand for labor is low) but people keep saving their money (=they increase the supply of labor) then the interest rate has to fall to balance the demand and supply for labor on an individual level. If the interest rate is low or negative it means there are lots of people who are working but do not intend to consume or invest the fruits of their labor and it also means there are lots of people who cannot find employment opportunities that earn enough to cover their own consumption.

mojomark 5y ago

> > However, money is also a concrete economic good in and of itself. Just playing devil's advocate... if you're stranded on an deserted island with a suitcase full of US $100 bills or perhaps flash drives with bitcoin in them, does that provide significant concrete value to you in and of itself? Same question, but this time you have "food, housing, clothing, shelter, or artwork (e.g. some songs loaded in your out of range phone)"?

cortesoft 5y ago
There are a lot of concrete economic goods that don't have value on a deserted island. Iron ore, gold, or really any natural resource that requires a lot of processing will be useless on a deserted island. In fact, the entire point of the "move things" category in the article is that things have different value in different places.
- MichaelZuo 5y ago
  Gold surely has value as it’s the most malleable of the metals. Having a gold cooking pot is a vast increase in wealth on a deserted island compared to no cooking pot. If you put a bit of imagination a lot of random things can have value in an extreme enough situation.
imtringued 5y ago
As I mentioned, for your $100 bill there is a liability attached to the $100 bill. The piece of paper itself is worthless. The problem is that you cannot reach any of the people who are liable and therefore even its notional value has no meaning to you.

imtringued 5y ago

>However, money is also a concrete economic good in and of itself, subject to forces of supply and demand much like any other good. There is an infinite supply of money out there for very obvious reasons. The USD is primarily a unit of account. The store of value function has been delegated to debt. The reason why debt stores values is that people promise to provide value in the future. Every asset meaning every dollar has to be backed by a liability meaning a dollar of debt. The reason for that is quite simple. The dollar has no inherent value, therefore the net worth of the dollar must be 0. The medium of exchange function isn't provided by only the dollar itself anymore. Nowadays people use a wide variety of payment services ranging from bank accounts and credit cards to Paypal and the lightning network and of course, the good old dollar bill is providing a offline payment service. The supply of money is unbounded because the amount of promises we make and the economy we can create in the process is unbounded. What is in short supply is labor. Simply saving money creates no net real wealth in the economy because the money that has to be saved has to be created first through debt. Instead, net wealth is created in the real economy by the borrower who is using the money for an investment. If there aren't any borrowers willing to get into debt (=demand for labor is low) but people keep saving their money (=they increase the supply of labor) then the interest rate has to fall to balance the demand and supply for labor on an individual level. If the interest rate is low or negative it means there are lots of people who are working but do not intend to consume or invest the fruits of their labor and it also means there are lots of people who cannot find employment opportunities that earn enough to cover their own consumption.