$Money$



I’m going to get so many crap messages for posting that title. The spam bots hunt out words like “finance” and “investment” in bloggers tags and then plaster their inbox with promises of debt consolidated. Sorry already whittled myself down to a single overlord thankyou. . . .

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At some point in the far distant past of human beings, a dude became good at fashioning axes and taught his offspring to do the same. The axe builders happily supplied their neighbours with axes, in return they got beets from another family and pots from another, but things changed. Roads developed, supply fluctuated, demand grew, trade evolved, some people even got greedy. A reliable system of IOU’s was needed. How was the dude who was traveling through town and needed an axe suppose to do a fair exchange? You can’t very well settle in and start growing beets every time you need to buy gas.

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Currency was created, humans were now able to efficiently keep track of who is owed what exactly. But who exactly owes you something for holding one of these IOU’s called money? If I’m holding a penny, it must be the collective whole of people who accept the worth of currency who owe me. . . .. But it isn’t obligatory, you are perfectly in your right to refuse me one penny’s worth of labour if i demand it from you.

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Alright so hold on, money is more like a giant raffle ticket draw. The prize pool is the whole of everything that has worth in human civilization. Everyone who’s holding a ticket is guaranteed to win something from the prize table. Luckily we have a little more direction over the prizes we win than trusting the spinning of a mesh wire barrel. Although that might be fun. Go to the store and buy ten “items” randomly drawn from the store’s inventory . . . .. I can’t think of a single store where i would want to do that.

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So money was first created as something physical to represent something theoretical. A coin symbolizes worth beyond its material value. The $1 coin is made up of a few cents worth of metal, but the coin’s “worth” is $1. Modern day, worth is moving back into the purely theoretical. Most people swipe bank cards, or pump swipe cards, even vending machines on visa. The physical representation of worth, money, is becoming redundant. Now when you give the traveling dude an axe, you can keep track of what you’re owed without demanding he give you a valueless hunk of metal.

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Disclaimer: This bolg does not endorse giving axes to transients.

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14 Responses to “$Money$”

  1. Jules Cosby Says:

    You forgot one major piece in the Remi Stevens materialist conception of history. Money has been around since the axe-maker and the beet maker agreed on an equivalent, but there was never just one. Iron, gold, silver, even notes printing by commerical interests have all been historical forms of money. Part of the rise of the the modern state was the consolidation of monopoly on minting currency. Even the most ardent advocates of restricted government still recognize the legitimacy of the role of regulating the money supply.

    True, fiat currencies have value only because of the consent of the community. A hundred years ago, nations pegged their currency to the value of the US dollar, which was backed by gold. When this system broke down, international currencies began to be decided by market speculators.

    I have to take you to task on the assertion that new forms of money are making material more redundant. Of course value is always theoretical because it’s necessarily subjective. But I don’t think the rise of credit and digital money necessarily makes more sensuous, material deposits of value obselete. Witness how with every financial crisis, gold becomes more valuable, even if paper money does not.

    Besides, do you think prisoners would start trading ficticious cigarettes for goods and “services” while in jail?

  2. exuvia Says:

    TRUST-EXCHANGE

    Few people can look at the US $; the elaborate green note full of stories and admit that it is the emperors new clothes. Most people want to believe in value. Psychologically it serves them best at the moment.

    Castles in the air have sold well through out human history.

    People hand over their lives to others, to religion and to pilots, not on evidence but on trust.

    Trust in faith of overnight delivery or at the end of time. I don’t think it is about material vs. immaterial evidence, both work within and for the trust-exchange.

    Much in this world is obtained just by ‘promise’ without a bird in the hand and gold on the counter. A promise can make a mountain move in vain.

    Still, when pressed, people – up to a point – do prefer a hands-on experience. This is abandoned when the promise far outweighs the thing at hand. Take a game show, you have 5.000 US $ but chances are you could end up with 50.000 $. The idea is tempting.

    Part of ‘value’ comes from the degree of difficulty the system imposes on the individual who aspires to acquire the symbol. It seems to play on reverse psychology; the harder it is to get the more desirable it seems and the greater the perceived ‘value’. What is in a stamp worth 100.000 US $ except that it is impossible to get? Without collectors it would be a worthless piece of paper. Crops are destroyed to make the hard to get in order to up their value.

    People used to be bone collectors and the femur from a famous monk could be worth a fortune. Some people thought you could bye your way through the small and narrow with a piece of Saint Peters collar bone. Bones moved fortunes. In a different place and in a different time Spondylus, a sea shell, was the going coin. Sea shells, gold, collar bones or paper art; directly you can’t do anything worthwhile with these things in life they are all promises.

  3. remistevens Says:

    Well, currency may have been developed through more nefarious motives than just to enable trade.

    Everything has value. Everything. But there is both a functional value and an artificial one- within each item this ratio is different. An apple has a very high functional value, but little artificial value- without added artificial value the item has little margins in its worth to deliver the equivalency provided by a good physical currency. Paper money? Looks good in a rap video i guess, otherwise pretty physically useless. The $100 000 stamp has a very high artificial value and almost no functional value (although my cat loves to lick stamps). The artificial side of the ratio in this case is able to provide a very large margin for delivering equivalence. When i sell the stamp for $150 000 that large fluctuating artificial margin is able to provide further worth allowing the item to be equal with items it previously was inferior to.

    Of course there is still the fact that artificially created value has a function. I’ll ignore that.

    My point Jules was that this electronification of currency is pushing the ratio. More artificial, less functionality attached to the items used as currency. Not because the artificial margins are growing, but because the functional side is shrinking. A coin has some usefulness physically, but a string of positive and negatively charged switches on a computer hard drive is pretty useless other than as a measure. As you’ve said, many types of currencies have been used. First you may have traded a bag of pig iron, then come the more useless gold, followed by further useless paper slips and finally descending into almost entirely physically useless data sequences. This end stage in computers resembles the initial form of exchange in its lack of physicalness. A string of electronically stored numbers meaning RBC owes me $100 or a mentally stored assurance to the axe dealer “hey don’t worry i’ll get you back with some beets next winter”.

    Now to contradict myself again- its absolutely true that money will never be made redundant. Any time someone wishes to transfer value secretly within an artificial margin, they will need to use physical money. Sure i could trade you heroin for crack, but if you’ve got no crack we need to use hard cash to seal the deal rather than go through RBC heroin accounts.

  4. Jules Cosby Says:

    “I’m gonna ignore it” The hell you are!. You’ve got to explain the difference between functional and artificial. From where I’m standing, it seems like the function of money is largely to facilitate exchange, something that in most cases, computerized money makes easier.

    It’s easy to confuse value with prices, indeed the conflation of the two is the very basis of neoclassical economics attempts to do so. Nevertheless, they are two separate concepts. Economic value is an objective quality inherent in a commodity, and enters from the labour process. Prices, by contrast come from the realm exchange.

    So you would say “it didn’t take 150,000 worth of labour to make this stamp, and yet some stamp expert told me that’s how much is worth”. But just because you have it, doens’t mean that you have 150,000. That price is something that has to be realized in exchange. If you can’t find a buyer, than all you have is a kitty toy.

    It’s the same with those magazines they used to have that told you the value of your sports cards. I found all of my cards in the magazine and assumed that I suddenly had that much money latently sitting in plastic holders. But that wasn’t exactly something I’d put on my tax return.

    And don’t worry about the contradictions. Zee Germans love zee contradictions, and so should we!

  5. remistevens Says:

    Difference between artificial and functional. Take a look at the stamp again. Assume the same amount of production went into both the expensive stamp and a 2009 penny. If you were to trade me an appraised at $150000 stamp for my penny you’d be pretty silly. Just because an artificial value has not been realized in sale price, does not mean that it does not exist. Your old hockey cards are worth something more than their production. Are they worth what the card makers tell you? Probably not, but they are worth something more than just the functionality of cardboard and images.

    The function of paper money as a exchange enabler comes from an artificial value we’ve attached. I suppose the artificial value itself is functional as an exchange enabling concept. But the exchange enabling concept is its own entity separate from the physical money- an abstract tacked on to a physical symbol. Anything could have carried this load, we picked slips of paper. Now we’re picking computer data. The exchange enabling concept itself is abstract, it does not physically exist, but it is realized in how it changes our perception of the physical things we deal with.

    When a sale occurs, the final price is a ratio between functional value and a margin derived of the exchange enabling concept. This ratio is indeterminate, but both function and artificial are contained within the price regardless.

    Your question here might be whether an artificial value can exist then if its never realized against a scale, if sale never occurs? Well a thief breaking into my home deciding between my grocery receipt and the stamp will probably go for the stamp. This is an example of the artificial value existing even though it is not defined by a buyer. What someone is willing to pay exactly is irrelevant to the thief- but he still knows one is more valuable than the other.

    So about the exchange enabling artificial value and its obvious usefulness/functionality. Well i would call it something produced, like anything else abstract which is produced. If i watch entertainment news i may create the abstract quality of admiration for the Baldwins. Its not something tangible, but it will change my behaviour. Its also not defined on an exact scale, but if i had a Baldwin locked in my basement i could very likely trade him with other fans who wanted more than just weak acting work done.

    The artificial value is itself functional, but is not a functional aspect of the slip of paper. That’s the distinction i chose to ignore last time.

    Of course value of functional qualities may fluctuate. Burning money for heat is not very functional if you live next to a birch forest, but it is if youre heating a crashed plane in the mountains. These functional values are not concrete. In fact, this is why an artificial value had to be created in the first place. In the interest of creating equivalence. Between varied buyers, sellers, products, markets . . . ..

    Now please do not confuse the fluctuation occurring in both the functional and the artificial. They are both constantly indeterminate, partly because one is always trying to assess itself off of the other, but more because of supply/demand and the subjective perspective of any trader. The beet dealer knows he can get a better deal from a sucker and will tack on a surcharge (artificial). On the other hand the hungry man will out bid the full man at the beet auction, for him, the beet has a higher functional value. He’s paying more because the beet has more functional worth for him. So what about the seller who jacks the price knowing the man is hungry? Here the same extra value seems artificial for one man and functional for the other. Personally, well, i don’t see why not. These values both seem entirely subjective to me.

  6. remistevens Says:

    oh man, i’m never going to meet my 5 day maximum deadline for posts if i keep spending this much time on answers.

    not telling you to stop dude, you always ask the best questions.

    I find i just answer things best when i repeat my point from different angles, uh, here’s how it should have gone in the interest of brevity:

    Functional=value determined by physical usefulness only
    Artificial=value determined through trade enabling estimations on equivalence

  7. exuvia Says:

    Interesting topic all the way; so appropriate during these days of the unmasking of…

    Posts are born for this.

  8. remistevens Says:

    , helps to have some solid comments coming from the readers. I know when i’m out serf-ing the web the subsequent discussion of posts is often the best part.

    hammering things out seeing what we come up with.

    got a few great loyal readers who comment here at the bolg. . . thanks

    anyone else i love you too.

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