The Money Paradigm

What IS Money?

Money as such is not real, it’s simply a concept or promise, a bargain. True, in the past we used to use items of intrinsic value such as precious metals or jewels as a means of exchange, to facilitate a purchase or a sale but we don’t do that anymore.

We’ve replaced the items of real value with tokens, coins, points, or notes which represent value, not in themselves, but in their function in effecting a purchase or sale.

We use money to acquire resources and to provide them – money s not a resource in itself unless you decide to melt it down to make something else, burn it to provide warmth, or perhaps as they did in the German Weimar Republic, use it to paper the walls.

Money is a means of making exchange easier. Wee always want or need to exchange things. I have something you need, you have something I need, so we agree and equitable ‘rate of exchange between ourselves. But what if I have something you need but you don’t have anything I can make use of? That’s when we need something of agreed ‘universal value’ – even though it may have no intrinsic value in itself – to enable us to effect the exchange.

That is what we call ‘money’. It’s simply a change agent and has no value in itself except the virtual value we have mutually agreed it represents.

As we have seen when discussing wealth, money is just one thing we can use to effect an exchange, there are other things, other resources as we shall discover. Together we call all these things our ‘finances’, although most people still assume that finance, their financial, exchangeable resources, only consists of worthless (not valueless) money.

Maybe for some people that is all they have or maybe all they are prepared to give up in an exchange.