Money

What is money?

 

Money is faith. Money is persuasion. Money is rhetorical.

 

Money is not a physical object. It does not exist innately in the physical world. The physical object we call “money” may be gold or silver but, really, the object could be anything we collectively agree has value. That is faith. That is persuasion.

 

When we consider objects like paper money or base metals, things get more interesting. Gold and silver are somewhat rare. Until Mansa Musa passes through town or we figure out how to mine asteroids, there is a limited supply. The rarity of gold and silver gives them value – at least we agree they have value, plus they are pretty. But paper money? Coins made from zinc? What are those backed by? Formerly, these were backed by gold and silver stored away – somewhere. Now, not so much.

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Untethered to precious metals we agree have value, paper and zinc have evolved to blips on a screen. What are the blips backed by?

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Gold, silver, paper, zinc, blips – something else backs all of these and that something is faith, persuasion, rhetoric. What’s more, this process requires at least two people. Money is a social act. I guess a single person could call something “money” – but why? Money is a medium of exchange. Exchange requires two people. So, money exists not for itself but for the action of exchange, to mediate and make possible an exchange. That requires faith. That requires persuasion.

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Money is rhetorical.