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Money is nothing but a sophisticated barter system. Instead of “I will give you 3 apples from my tree for a dozen eggs from your hens”, there is an indirection

Money is nothing but a sophisticated barter system. Instead of “I will give you 3 apples from my tree for a dozen eggs from your hens”, there is an indirection through a standardized property - money. Now we can say my apples are worth 4 shekels each and your eggs are worth 1 shekel each, and we can still agree on the same transaction. The difference (some would argue, improvement) is that shekels have a worth of their own, so can be stored against harder times, which may not have been possible with the goods they bought. Of course, that shekel value being variable over time, can equally lead to riches or ruin, and requires a more sophisticated treatment by perhaps insufficiently sophisticated participants; snakes and ladders. In any event, societies existed well before this “money” thing came along, even free ones. High technology societies do need a money system, I think; for automated transactions to take place, there needs to be a standardized good-exchange valuation, but not all high-tech societies are free, and not all free societies are high-tech. Freedom seems orthogonal to money.

FridayoLeary 5y ago
>Money is nothing but a sophisticated barter system. I think we are all in agreement there. But it has such sophistication and is so amazingly efficient that it has an intrinsic value as a mere concept. This is because it enables activities that would otherwise be impossible. A good analogy would be a computer program. This i think is where we differ. But i think it's obvious that money is more than "nothing"- after all it sustains the entire banking industry. >The difference (some would argue, improvement) is that shekels have a worth of their own, so can be stored against harder times Again this isn't (and was never) the true reason for money. It was only a security against the money and helped people to visualise the concept better (i know i'm oversimplifying but i think that's the basic idea)
robocat 5y ago
> Money is nothing but a sophisticated barter system. Money is the core of a distributed optimisation system. How does society decide whether to fix a pothole, eat some oranges, advertise a game? The hugely complex chain of suppliers is balanced via money - every actor in the chain is optimising locally using profit as the objective function. Legal agreements are the mechanism to ensure the money flows for the correct goods/services, and society sets constraints (laws/regulations) to enforce goals that are not monetary. The economics 101 narrative for how money was created is an extremely limited view.

FridayoLeary 5y ago

>Money is nothing but a sophisticated barter system. I think we are all in agreement there. But it has such sophistication and is so amazingly efficient that it has an intrinsic value as a mere concept. This is because it enables activities that would otherwise be impossible. A good analogy would be a computer program. This i think is where we differ. But i think it's obvious that money is more than "nothing"- after all it sustains the entire banking industry. >The difference (some would argue, improvement) is that shekels have a worth of their own, so can be stored against harder times Again this isn't (and was never) the true reason for money. It was only a security against the money and helped people to visualise the concept better (i know i'm oversimplifying but i think that's the basic idea)

robocat 5y ago

> Money is nothing but a sophisticated barter system. Money is the core of a distributed optimisation system. How does society decide whether to fix a pothole, eat some oranges, advertise a game? The hugely complex chain of suppliers is balanced via money - every actor in the chain is optimising locally using profit as the objective function. Legal agreements are the mechanism to ensure the money flows for the correct goods/services, and society sets constraints (laws/regulations) to enforce goals that are not monetary. The economics 101 narrative for how money was created is an extremely limited view.