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Is it time to reassess the very concept of money?

ks.234

ks.234

Half way to Infinity

‘Outdated and misleading’: is it time to reassess the very concept of money?​

“It’s regularly being created and destroyed – and economic models that don’t reflect that fact are not even slightly useful”

“According to the standard picture of public expenditure and revenue raising, governments can only spend if they first gather money through taxes or asset sales or borrowing. The reality, however, is again the reverse. Just as banks lend money into existence in the form of IOUs, governments spend it into existence.”

www.theguardian.com

‘Outdated and misleading’: is it time to reassess the very concept of money?

It’s regularly being created and destroyed – and economic models that don’t reflect that fact are not even slightly useful
www.theguardian.com www.theguardian.com
 
The critical point about money is that it is a belief system. In essence a faith. It is 'accepted as payment' because the person accepting it has 'faith' that they can use it later to 'buy' something which they feel will be similar (or greater) in 'value' that what the 'gave' to get the money in the first place.

As such it is prone to all the usual flaws of a 'faith system' regardless of all the malarky about 'value in terms of gold' etc that have been rolled out over the eras.
 
There was an interesting R4 programme some years ago which explained how 'bits of the True Cross' were actually *increasing* as time passes. Reason being that there is a faith that touching such a token with something else can make that something else *also* 'part of the true cross'. Tommy Cooper would have been proud of that one! But Bankers do it every day. :)
 
Jim Audiomisc said:
There was an interesting R4 programme some years ago which explained how 'bits of the True Cross' were actually *increasing* as time passes. Reason being that there is a faith that touching such a token with something else can make that something else *also* 'part of the true cross'. Tommy Cooper would have been proud of that one! But Bankers do it every day. :)
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Not much of a jump if you believe in transubstantiation.
 
Bart said:
Certain of my family members subscribe to the concept that it grows on trees.
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It did.

Take a look at the history of Tally sticks.

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Tally sticks were willow sticks with various notches and marks made on them to represent a certain agreed value then split into the ‘stock’ and the ‘stub’, from where we get our modern day terms for stocks and shares and what you were left with after writing a cheque. Henry 2 is credited with first using them in modern UK in order to raise the resources he needed for a war. He would ‘buy’ carts, wheels, arrow heads, whatever, with tally sticks that could be returned to the ‘exchequer’ for payment. The holder of the ‘stock’ could exchange the tally stick to buy something else, a side of pork for example. In other words, the sticks themselves became a means of exchange.

Money did literally grow on trees.

The great fire of the old Houses of Parliament in 1834 was caused by a fire to burn old Tally Sticks that got out of hand

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Should it be rethought? Yes, possibly.

Is it the time? Clearly not. Hard to imagine when that would be. It would require a consensus even less likely than a successor to red book CD.

It is an issue to keep raising though. Where we are now on UBI, to take an obvious example, is much further along than we ever thought we’d get even five years ago.
 
Jim Audiomisc said:
The critical point about money is that it is a belief system. In essence a faith. It is 'accepted as payment' because the person accepting it has 'faith' that they can use it later to 'buy' something which they feel will be similar (or greater) in 'value' that what the 'gave' to get the money in the first place.

As such it is prone to all the usual flaws of a 'faith system' regardless of all the malarky about 'value in terms of gold' etc that have been rolled out over the eras.
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I’d say it’s more of an IOU. A marker for what you owe and are owed.
 
Mike Hughes said:
Should it be rethought? Yes, possibly.

Is it the time? Clearly not. Hard to imagine when that would be. It would require a consensus even less likely than a successor to red book CD.

It is an issue to keep raising though. Where we are now on UBI, to take an obvious example, is much further along than we ever thought we’d get even five years ago.
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Tend to agree. UBI would be a good gateway to a wholesale reappraisal of the purpose of money.
 
Anyone can create and destroy money, it's not necessary to be a bank. Just lend a grand to someone. £1000 new money has been created (2k total). This extra money is destroyed again when you get the money back, or if it's written off as a bad debt (leaving just original 1k).

I think it's important that the right amount of lending goes to the right things. Lending related to productivity or efficiency is good, lending people money for cars and holidays not so good.
 
darrenyeats said:
Anyone can create and destroy money, it's not necessary to be a bank. Just lend a grand to someone. £1000 new money has been created (2k total). This extra money is destroyed again when you get the money back, or if it's written off as a bad debt (leaving just original 1k).

I think it's important that the right amount of lending goes to the right things. Lending related to productivity or efficiency is good, lending people money for cars and holidays not so good.
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Yes, as Hyman Minsky said "Everyone can create money; the problem is to get it accepted".
Warren Mosler illustrates the point with some of his business cards. He is in a lecture theatre and offers a business card to anyone who will stay behind to clean the hall. There are obviously no takers. But, he goes on to say, imagine there is only one way out of the hall and it is guarded by Mosler’s heavies who will not let anyone out unless they hand over a business card. Those bits of card suddenly have a value.

In an extension of that principle the University of Missouri Kansas on which a currency called the Buckaroo was invented in the late 90’s. All students are required to submit 20 buckaroos by the end of the semester to get their grades. Buckaroos can be earned by doing designated community service jobs. There is no limit to how many buckaroos a student may earn, and Buckaroos are freely transferable.

The programme has been running successfully ever since and demonstrated that that the “buckaroo is a (simple) case of a public monopoly; that the UMCK's buckaroo fiscal deficit is exactly equal to the buckaroos saved by the students and their associates; the value of the buckaroo is a function of what the students have to do to earn a buckaroo from the UMKC work doing one hour of community service; the buckaroo functions first to move student labor from private to public domain and the buckaroo has operated and sustained its public purpose independently of foreign central bank policies.”

www.huffpost.com

The UMKC Buckaroo: A Currency Model for World Prosperity

It's been more than 10 years since the economics department at UMKC introduced its own currency. It's called the buckaroo, named in sync with the school mascot, the kangaroo.
www.huffpost.com www.huffpost.com
 
gintonic said:
maybe i'll ask in my local later.............

I think they prefer


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Is it just the £10 note that is considered money at your local? If you pay by contactless payment, where then is the money? What is the value of that money based on? If you have a bar tab, is that not money? If the owner paid a gardener to cut the grass in the beer garden with beer tokens, isn't that money?
 
stevec67 said:
No, that's bartering.
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But what real difference is there between money (as a concept - a nod to the threat title) and bartering? All transactions we do with money are, in effect, bartering, it's just that money provides a buffer between the offer on one side and the supply from the other side. So I offer my time to my employer, who provides me with a buffer (money) in exchange) and I use that buffer when I acquire something from somebody else. Saves me having to offer my time (or anything else) every time I want something from somebody else. I think the concept of money includes the concept of barter, and making a distinction is a bit moot if you are trying to get back to first principles on the whole money thing.
 
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