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Thinking of it another way: money is a technology for distributing wealth. Without money we would need to rely on some centralized authority, a chief or pharoah
by msellout 11y ago
Thinking of it another way: money is a technology for distributing wealth. Without money we would need to rely on some centralized authority, a chief or pharoah, who would directly or through a bureaucracy distribute wealth. Money allows society to allocate resources with decentralized decisions.
- nosuchthing 11y agoMoney is a cog. Details of economic systems, tax codes, social services, labor laws, job markets, trade agreements, and financial institutions are what "distributes" wealth.
- AnimalMuppet 11y agoNo, you're thinking of free markets. Free markets can work (inefficiently) by barter, which still distributes wealth without centralized authority. But barter is too inefficient (especially at scale). You could say, then, that money is a technology for efficiently distributing wealth, without the need for some centralized authority (except perhaps for the issuer of the money).
- ArkyBeagle 11y agoI prefer "medium of account" and "medium of exchange." For one thing, it emphasizes a duality that's easy to forget about.
- dredmorbius 11y agoThere are four roles. Account is useful, but I see exchange as primary. No use accounting if you cannot facilitate exchange (that is: trade).
- ArkyBeagle 11y agoIt's a dualism - you can't have one without the other.
- msellout 11y agoNo, I wasn't thinking of free markets. I was thinking of the bundled concepts of money, markets, capitalism, and the whole mess of technologies we use to allocate resources among the population. It's more interesting to think about why we want a medium of exchange rather than how to contrast money, credit, and all the other vocabulary built into our current system. To say that one technology is more efficient than another needs a definition of efficient. How do you want to measure efficiency? Further, I did not argue that money (as a conflated bag of concepts representing our current system) is more efficient than a centralized authority. It appears so, given recent historical evidence, but that's still just a hypothesis.
- TheOtherHobbes 11y agoNo you couldn't, because it doesn't take any research at all to understand that: 1. Real currencies only exist by virtue of a central authority - a central bank. 2. The distribution of wealth is incredibly inefficient. It's inefficient in the practical sense. It can take unfeasibly large amounts of time and effort to organise money transfers, certain transactions are either banned or deliberately made very difficult, and moving money always attracts a "tax" paid to the administrators of the transfer. Debt, which is a purely abstract social game, is even more toxic. Wealth distribution is also incredibly inefficient politically, because most wealth is hoarded by individuals and organisations who did very little to create it. In a rational culture they would have no claim on it at all. Meanwhile perfectly viable and useful business ideas are consistently starved of funding (i.e. approval by the financial priest castes.) In fact money is just an irrational tribal status fetish. It makes as much sense as religion, and exists for much the same political reasons - as a useful backchannel by which mediocre and sometimes rather disturbed humans can make claims on resources and acquire political influence for personal gain.
- meric 11y agoI'd like to think of money as debt the society owes the individual holder for past benefits the individual holder bestowed on society. That debt can be exchanged for more goods and services from society in return at any time. The value of the debt may fluctuate (inflation/deflation) depending on how much benefits other individual holders in society is providing. EDIT: In practicality, not legally.
- jsprogrammer 11y agoIn the current US structure, money is not debt owed by society to individuals, but rather, it is money that is owed by individuals (or groups of individuals) to banks.
- shoo 11y agoThere is a very interesting book that explores one example of a possible other system -- centralised economic decision making -- called "Red Plenty" by Francis Spufford. State-owned Soviet Economy! Central Planning! Cybernetics! Linear programming!