What is money? A Medium of Exchange? A Social Institution? A Language? Belief? Faith? Trust?

Chris Lindstrom of the Berkshares local currency responds to the question "What is money?" asked by Aaron Wissner of Local Future during the 2009 American Monetary Institute's Monetary Reform Conference.

Chris Lindstrom: Well, thats a very big philosophical debate. My personal belief is that, if you were to see money as an onion, containing, sort of, different levels or layers of its existence, you start taking away, kind of, the outer layer, which might be, you know, seeing it as kind of a medium of exchange, or like in all these scientific definitions, and then you kind of, you go inside, and you say, oh, its more of an agreement, its more of a social contract, and you might dig in a little deeper What I would my personal belief is, really, when you go to the core of what money is, its just trust. Its belief. To give it a more abstract definition, I would say that its, you could almost say that its unitized trust, or unitized faith, because thats really all that makes money money, is our faith in it, or our faith in the a in our belief in it as a medium of exchange. So thats, I feel like thats kind of its essence, because theres no tangible, or so called intrinsic value in it. Its just, its something that we believe in, and thats what makes it valuable.

So, um, Stephen [Zarlenga] would say that its a social institution, or something that comes into existence through the law, but still, people have to believe in it, in order for it to be real. I mean, just because the government says it is valuable, does not mean that the people will believe that it has value.

So, thats sort of my basic, my personal belief. I would also say that money has a certain, theres something linguistic about it, like it almost has a, is derived from, its a kind of language almost, so thats Its interesting that money, actually, or perhaps you could say it is more of a writing system, or its derived from, or comes out of this same, um, parent, as writing cause actually, when you do your homework, and you look into the anthropological origins of money, you see that writing, that like, the characters that were the, kind of the original form of writing were also used for money, and that they were interchangeable, and so thats kind of revealing in my mind.

So, to break it down, Id say that its kind of a language, its almost a language of trust, its the language of acknowledgement that goes hand in hand with trust, so, I mean, you kind of have to play around with all, all of these different dimensions. I dont know if you can say that, like, money is this one thing, but it kind of comprises all of these different qualities, that make up its essence.

Category:

Education

Tags:

• money
• currency
• local currency
• complementary currency
• scrip
• Berkshare
• economics
• trust
• exchange
• trade
• debt
• credit
• crisis
• economy
• unemployment

[alttab7890]

@syok92 I know! lolol!

[zthustra]

OMG are you ever going to get it? When people stop using one thing and start using another, the first thing stops being money and the second thing starts being money. It is the fact of their usage of a thing as a medium of exchange that makes it money. Money is whatever people are using as a medium of exchange. You can't observe the invisible faith or belief of the people, but you can observe what they are using as a medium of exchange. What they actuall use is what we label money.

[panstriato2]

If everyone stops beliving a rock will fall when droped it will drop anyway. If everyone (or many people) stops beliving they will get something for their money (or start thinking they will get less and less) they in fact will not get anything for it becouse others will not take it. This is not just teory it has happened before and will happen again. Guess we will have to wait and see, I think it will happen to us both (unless we die soon).

Good luck and good bye

[zthustra]

Amen! The actual exchange of goods and services for money is observable in the material and real world. It is this exchange of goods and services for a medium of exchange that makes that medium into what we call money. Whether the medium is coin, paper or electronic makes no difference, the medium of exchange is called money and it is money because it is exchangable and the value of goods and services is measured in units of the medium.

[panstriato2]

ophical, but in certain cases people do loose faith in its value and the price of a currency gets lower or people even stop using it

The reasons we use it materially are not physical but abstract

If a rock falls we presume others will not only becouse we have seen it physically happen before but cause we (some of us) have some understanding of gravity workings (a physical explanation). When we see people exchanging goods for money the only physical thing we see is goods being changed for paper.

[zthustra]

The observation and experience of buying and selling with coins, notes, checks and credit cards is a "physical" observation because it all happens in the material world. It isn't something imaginary that happens in the mind and stays there. Money changes hands and people walk off with a happy meal. Most of us have the common core experience of using money.

It is money because we materially, physically use it as such, not because we imagine it to be money.

[panstriato2]

And people actually accept it, hold it and spend it becouse they belive others will do the same.

Gold and silver are the same, there are people who would throw away gold which means nothing to them, but (unless we use it ourselves for practical purpouses) we accept it (if we do) becouse we belive others will.

Now, you may say that we have evidence that it will be accepted becouse we saw it accepted in the past, but that is not physical evidence, it is circumstancial. This may sound to phylos

[zthustra]

This is a war of words.

It isn't money when you believe it is money. It is money when you and I and others use it to buy or sell goods or services.

We can say that it is money NOT because we believe it with all our hearts or have faith in it, but because people acutally accept it, hold it and spend it.

I know these people that believe only gold and silver are money, but they never spend them at the grocery store. Their fath and thier belief do not make the gold and silver money.

[panstriato2]

Me and others accept it becouse we have faith yet others will accept it for the same. We have some ``evidence`` others will accept it becouse we see it happening, but it is only circumstancial evidence and not conclusive.

Something does not become money if I firmly belive it has value, but something does become money if I and many others start beliving it has value.

[zthustra]

Faith is what you have in the absence of evidence. Something doesn't become money because you firmly believe it is, it becomes money because you accept it from others inexchange for good or services and others accept it from you for the same. It has nothing to do with faith.