Wednesday, April 25, 2012

what is money?

BBCRadio | We dream about it, argue about it, worry about it, celebrate it, spend it, save it, we transfer it from one emotion to another. But what exactly is money? And why do we trust it? Frances Stonor Saunders takes a journey through some of the fundamentals of money. During her journey she dips her toe into the world of quantitative easing. How is that money invented? Is it as real as the pieces of paper in our wallets? And she explores some of the reasons for the calls to return to a gold standard. Essentially, she tries to gain a better understanding of what this stuff which we call money is really about; how and why do we maintain our faith in it, or has it just become too complicated? Read the transcript.


John Kurman said...

It's worth reading David Graeber's Debt: the First 5,000 years. I don't buy his entire argument, but I buy a lot of it, which is (paraphrased and condensed): Money, for the longest time, is war debt. It's a standardized means to fuck people over. The real valuable stuff (family, society, friends, etc.) is something money desperately wants to become, but that would require that it cease to exist. An irony, as it is created by sleight of hand by private banks. (NOT governments! Governments standardize, and occasionally redistribute once the Monopoly game ends and the economy freezes solid (See the biblical Jubilee)). Credit is future monies. Capitalism gets in trouble when they figure that the future goes on forever, therefore, credit - future money - is infinite, therefore, we can forever create something out of nothing. But we can't. Money is NOT barter, nor was it ever thus. Only in primitive and barbaric times does money take a "real" form such as dollars or bullion. Most of the time, it's all virtual. (Going all the way back to Mesopotamia, wherein they did all that complex math we think is so new, like compound interest, and derivatives, and credit default swaps, and, yes, double entry accounting, it's all there on the clay tablets. 

CNu said...

Awesome abridging John, thanks. I'll be putting that book on order from my library momentarily - Thanks!

Tom said...


Some of the points, including that interpretation of Jubilee, pop up in this unconventional hedgie's "Template for Understanding" macroeconomics.

Also glad to hear that double-entry bookkeeping was only new to Italianswhen they "invented" it  in 1350 or whenever. It's always been very difficult for me to believe business methods were somehow reinvented by an emerging third-world country.  (No dig at Italy, heck at least they were emerging, unlike the rest of western Europe at that time.)