No, That Isn’t What Money Is.

I had a conversation with a person on that same page as the last blog post. The page has the silly name of What if Money Didn’t Exist? If money didn’t exist, trade would be a nightmare. It’s why money as a medium of exchange came into being in the first place.

“Money. Money, for me, is an artificial representative of the values of things. Without it, things are at their net value.”

Incorrect. Do you deny that without humans acting to achieve ends there would be no such thing as economics? Value is derived from the mind of the economic actor, there is no such thing as intrinsic value in economic goods. Value is endowed on goods for how well they service the desire to ease economic uneasiness and achieve ends. Money is not a construct either. Money is a commodity that can be used as a medium of exchange. Before the advent of central banks and fiat currency, there existed a barter system. Now some items within this barter system could be more widely traded for a wider variety of goods. Since these commodities were more widely accepted, economic actors sought these items out because if they collected these commodities, they could accomplish a wider variety of ends that they desired. As economic actors came to understand this, these more easily liquidated commodities began to get their value from economic actors valuing them as a medium of exchange. This is how gold and silver came into being as “money”.

I guess I just made this entire page (What if Money Didn’t Exist) pointless by explaining the regression theorem. Oh well.

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