Part Two – Monetary Wealth

Money is a convenient measure of wealth, and if not valued for itself, it is valuable because it can be exchanged for the other forms of wealth. It is comforting to have enough of it. I know of no one who thinks they have too much of it.

Money, it its current form, physically has only pictorial value on paper or bas-relief sculpture on base metals. Its value in exchange lies in our agreed covenant to accept its posted values. When the government that issued a currency falls into disarray, its bills and coins lose value. When I visited Russia, its “money” had no value outside its borders.  When the United States went off its silver standard its dollars lost significant value in foreign exchange. Somewhere I have some coins from the past and from foreign lands. Some are real silver and those are at least fifty years old.

Paper money has evolved from letters of credit to government-issued promissory gold and silver notes and then to our present bills which depend on our faith in government for their value. (There is also a law that you must accept them.) This seems to work very well. When enough of us believe in the same thing, it becomes almost reality.  (In the U.S. one can redeem a dollar bill and get twenty nickels. Made of a copper-nickel alloy, they actually are worth about five cents each.) Money continues to evolve, and may disappear as a physical entity.

At any one time your monetary wealth can be measured simply by a sum of your accounts and cash on hand, subtracting what you owe. And “Simply” will not satisfy our government or creditors. Also investments are represented in monetary terms, but are promises and speculations. My dwelling is probably taxed at a monetary value which is an appraiser’s guess. But I have to come up with the cash for the tax.

In times concurrent to this writing (I might call  ”Modern times”) many regard their credit ratings as monetary wealth. This is a form of faith-based wealth which I may get to later. Maybe.

Money is almost a necessity of life. We acquire it by a variety of means. The most common is trading our skills and time to earn wages. Some receive it by inheritance from family and other social ties. Loans and investments are another source, and we can exchange tangible wealth for it. For those in need, some societies provide welfare in various forms; cash and in kind. When all else fails there is begging, theft, and fraud. In our possession it can be cash in hand, credit accounts, checking accounts, other bills of exchange such as money orders, and statements from savings and investments.

When money moves through a society it creates wealth. Passing through some hands it creates intrinsic wealth, raises social status, lifts spirits, and funds governments through taxes. Like some ancient coinage being shaved, some take a percentage and pass the rest on. When it ceases to move, its society has less monetary wealth working and all are poorer because of this. Saving, however, is necessary because we need money for emergent situations, or expected retirement, so some currency is always idle. Some societies provide greater security in guaranteed medical care, assurance of a pension, and welfare when needed. In proportion to this security, money flows more readily and everyone has a better chance to get some of it.

Note: Need develops intellect; many born to poverty prevail to great profit. A surfeit of means can lead to indolence and ignorance. Just saw  a new book out by a teacher observing the brightest students are not the best; the best are the most driven – those with “Grit.”

Saving can contribute to an economy when placed as loans. It can sequester wealth when invested in speculations in intangible enterprises such as stock markets.

Think of money as a tool – not useful physically (washers?) but valued for what it can do.  And as a tool it can do both harm and good.  A necessary evil, becoming less necessary (other means of exchange replacing) and being used for more evil. Most crime is a cash economy. Theft of goods is usually for their exchange cash value. Theft of food eaten by the thief may be pardonable.