Essay number two: by The Midnight Writer
What is Money?
We use money almost every day and yet few people can tell you what it really is. As long as it functions for us properly we don’t question what it actually represents. To understand money we need to start at the very beginning.
Assume that you are Adam and Eve in a whole new world. You live in what is for all practical purposes a wilderness. For your family, money would have no meaning or purpose. You would have to produce all of your needs by your own labor. You would have to build your own home, grow your own garden, make your own clothes and raise domesticated animals or hunt for meat.
As your family grows you bond with the neighbors that are closest to you. You quickly discover the advantage of bartering. You are a better builder and your neighbor is a better hunter. You begin trading your labor with each other. You build a barn for your neighbor and he provides you with meat. Money still has no meaning or purpose because bartering supplies you with all of the needs that you cannot fulfill for yourself.
Eventually your numbers multiply and the wilderness becomes a thriving community. People begin developing specific skills that fit their different talents. You have farmers, hunters, carpenters, tailors, cooks and more talents being developed with each new generation. Bartering begins to become complicated. With so many skills available, you discover that there aren’t enough hours in the day to travel all over trading your skills for the skills of other people. People start looking for an easier way to trade their labor.
The elders of the community gather and discuss how to make it easier to trade their labor with each other. The concept of money is born and people create the market place to exchange their labor. By setting up a system of coins that represent your labor and a common market place where you could exchange your coins for the labor of others you would no longer have to travel all over the place trading what you are able to produce.
The biggest problem becomes deciding how to place a value on the coins. If the coins represent man’s labor, then whose labor should be used to establish its value? Does a coin represent the value of a day’s worth of labor of a farmer or a carpenter? Should manual labor be valued at the same rate as a well-educated doctor? How do you solve the problem of each man’s labor producing different values?
The answer was found in setting the value of the coins to something everyone can measure their labor against. The elders decide to set up a bank to create the coins and distribute them according to the value of a precious commodity everyone could accept. They choose gold and made one hundred of the base coins worth one ounce of gold.
With the coins being worth a set amount of gold the people could decide for themselves what they should charge for their labor. This helped avoid the pitfalls and bickering that would ensue if the elders formed a committee to arbitrarily set values on the people’s labor. By allowing the free market to work, if someone charged too many coins for their labor the other laborers would refuse to purchase their product. If they charged too little they would fail to obtain enough coins for their needs. The free market place allows the people to determine the value of their work in a way that is fair to all.
If a person worked hard and earned more coins than he needed he could place the extra coins in a savings account at the bank and earn interest on the account. This would allow the bank to loan coins to the people who needed extra coins to purchase land or equipment to expand their ability to earn more coins.
The savings accounts would also allow people to save enough coins to purchase expense items that they could not afford with their routine income. The more they expand their ability to purchase things the more the entire community would prosper.
One important thing to remember is that there is no such thing as a free lunch. EVER! If you didn’t earn the right to something you have acquired, then you have taken it from someone who did.
Money is neither good nor evil. It is a tool. How we choose to use this tool determines whether the outcome is good or evil. If you chose to use money for a fair trade of labor, it becomes a powerful tool for good. If you seek the advantages of money without offering a fair trade of labor in return, it becomes a powerful tool for evil. Respect for money and its intended use should be remembered in all of our dealings with each other whether it is as individuals, as corporations or as a government.
You have no right to steal from another no matter what the circumstances. That is also true for a government. The government is stealing labor from you if they take money from you and give it to another who has produced nothing to earn the money. Robbing from Peter to pay Paul must never be looked upon as charity. It must never be looked upon as acceptable behavior.
There will always be the poor and needy among us and we should seek ways to help them. The free market economy of the United States created the most generous and compassionate society the world has ever known. That compassion came from a freedom loving people and not from greedy politicians peddling compassion for votes.
Our politicians have removed respect for labor from the value of money. In doing so they have turned money into something viewed as evil. Let’s reestablish the gold standard and take back our respect for money.