MONEY OR YOUR LIFE

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Chapter Four

THE TROUBLE WITH MONEY

You may well ask why money has become such a problem to us when I have made it look so simple.

And make no mistake there is terrible trouble with money.

Money loses its value, it floats, it inflates, it becomes terribly scarce or gets wheeled around in barrow loads to buy a loaf of bread. I am sure that you personally have experienced all sorts of problems with money or problems caused by money. Money is a great source of anguish.

The basic reason that money is trouble is because it is used as a commodity. Money comes to be regarded as having a value of its own unrelated to its use as a means of exchange.

This is quite obvious when you observe the existence of money markets and a whole world of commerce that trades in money as opposed to trading with money.

Here will be my greatest difficulty in getting you to understand money.

How can I explain the full significance of the difference between trading with money and trading in money.

It would be very nice if trading in goods and services could occur without the use of money and then we could scrap money and get out of trouble.

But this doesn't seem possible. No one has come up with a better idea for advancing beyond a barter system than to introduce the idea we call money.

And in that simple statement, if you can see the truth of it, lies the answer to the whole riddle. Because we have agreed that money is an idea introduced to facilitate trade as a means of exchange.

Money is actually an idea. It is something we imagine will represent the value of that for which it stands proxy.

Say that sentence again over and over again to yourself until it really, really makes sense.

You see we have to imagine that money represents the value of a commodity before we agree to a trade with that commodity.

We look in our wallet for a ten pound note and we know, or we agree to imagine, that it represents the value of about five gallons of petrol.

We also realise that this concept of £10 equals 5 gallons of petrol is a bit iffy. The price tends to be a bit slippery and changes from place to place and from time to time.

A very great deal of trust has to enter into the arrangement for it is no good putting the £10 note into the petrol tank, because as a substitute for that for which it stands proxy it is useless.

If only we could grasp the fact that money is actually an idea taken on trust, we could walk away from all of our difficulties over money.

A horribly difficult concept to grasp for all sorts of reasons. We talk about ideas and imagination as the same thing.

We can imagine ourselves having lots of money and at the same time be broke and have none of this stuff which I am calling an idea.

As you can see I am trying to get you to look at a very slippery concept. It is not easy and we solve the problem by introducing a symbol to stand proxy for the idea. And then we are in trouble, because we immediately forget that money is an idea and we use the symbol of the idea as a commodity.

You have the idea of watching the Cup Final. You find the twenty two pounds needed to purchase a ticket and then discover all the tickets are sold. But you are also told that you can get a ticket for £200on the black market.

You perhaps feel a bit sick and cheated and realise if you think about it that someone is trading in Cup Final tickets.

That which was intended to give you and other dedicated fans a chance to see a good game has become a means of making someone rich, who has nothing to do with the game of football.

If you did but know it you are looking at the unacceptable face of capitalism. The making of money by manipulating the means of exchange. Somebody making a killing without any contribution whatever to the creation of a great game.

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