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A New Look at Money


Memo from Chris March/April 1999 Zenair News #111

Contrary to the most generally accepted belief, money is not a commodity or a valuable, but only a convenient means of exchange.  The dollar (which comes from  "daller" and "thaler" the abbreviation from Joachimthal mines, 1520 silver coin used in Germany), is the unit of exchange.  But unlike other units such as the meter, which is one ten-thousandths part of one quarter of the earth's circumference, the dollar is a unit which is variable: it's value depends on the trust we have in the authority which issues the money.

We receive money through our work, and we have to understand,  again contrary to very strongly rooted belief, work is not a commodity.  We  do not exchange work against money, but we earn money because our work adds value to a given commodity. Example: in the service industry I pay the window cleaner because clean windows raise the value of my business or house).

Another way of getting money is through a gift (inheritance, etc.) And a third way of getting money is to borrow it.  I enter a contract with the lender by which a trust relationship is established.  The lender trust me that I use the money for what I say and that I will pay it back as promised, adding the rent of the money as interest.

And vice versa, I get rid of my money in the following ways: 

1) By exchanging it against a commodity to satisfy my needs (food, clothes...) or desires (vacation, airplane, flowers for my partner, etc.) And it is noteworthy to be aware that both parties (buyer and seller) are in full agreement when the goods or services are exchanged. Both think they make a good deal; otherwise the transaction would simple not take place!

2) By making a gift (and note that when I give, I leave the other completely free to do with my gift what he/she wants to achieve with it.)

3) And finally, by lending it either to another person (and I trust that he/she will do with it what was promised and pay me back as agreed) - or to legal entity such as a company where I usually have very little personal contact but still trust they will do their best to prosper - or to a financial institution where I have no contact at all anymore and lose complete control of the use of my money.  They may invest in military equipment or in renewable energy.  In this case my own greed ("the higher the return the better") dictates my loss of freedom attached to the further use of my money.

Most things we do we do out of well established habits.  Sometimes it is rewarding to look at what we do and ask questions:  Is it right; am I conscious of what I do and why?  This helps us to do a better job and live a more rewarding life because we are more conscious and have started answering those thorny questions: "Who am I?" and "What is the purpose of life?"



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