The Money Paradigm

In the beginning the idea of money, exchangeable ‘tokens’ came about when exchanging items of value as money, precious metals or other ‘rare’ commodities, sometimes anything in short supply such as spices. This sounds simple but not everyone had access to those things and so communities came to the agreement that something ‘standard’ should be used to facilitate exchange whether that was for services rendered or goods supplied.

Over time as communities expanded and people travelled around more it was agreed between neighbouring communities and states within a country or nation to use the ‘same’ money to make things easier. This evolved into money coming under the control of national governments and other authorities who ‘issued’ and too ownership of money which was then no longer under individual control or ownership.

Most people don’t realise they don’t ‘own’ ‘their’ money – it’s only a ‘voucher’ or ‘promise’ by their government to ‘pay’ them the ascribed value of the money should they ‘demand’ it (as it states on UK banknotes. In fact, this never happens, well not any more. It used to in my grandfather’s time, but then the state money was backed up by a ‘reserve’ of precious metals which is no longer the case.

Government money is only ‘worth’ what the government say it is. They control how much is in circulation, often creating more to meet economic needs in ‘times of crisis’ and thus reducing its purchasing, or exchange, power. They also control money, and us, by limiting the amount we can earn or spend through taxation.

To manage money governments use the banking system. Banks are private or state owned corporations who manage the distribution of money, its flow and circulation. In most countries and in all ‘developed’ nations individuals cannot operate without having a bank account. It’s not a legal requirement but its almost impossible to operate within the law if you don’t have one.

The banks hold your money, not physically, but as digital records. What you see on your bank account screen or paper bank statement doesn’t ‘exist’ as such. It’s only a record of how much has ‘gone in’ to your account and how much has ‘come out’.

Meanwhile, when ‘your’ money is ‘in’ the bank they are lending it out. They pay you a very small fee or ‘interest’ to do this, usually the lowest rate the government will allow, but they charge a much higher fee, sometimes up to 10 times what they pay you to other people to whom they lend ‘your’ money. On top of that they are permitted to lend your money out eight times over at the same time to different (or even the same) people. This may seem unfair (which it is) but it’s how the economy works in the developed world.

As far as money is concerned it is what it is and we have to accept it – or do we? How can we use ‘our’ money effectively to enhance our freedom?