Some Thoughts on Money

‘Bread’ (cockney rhyming slang 'bread & honey', money) ‘dough’, ‘dosh’, ‘loot’, ‘moola/moolah’ ‘spondoolies’ and ‘wonga’ are all slang terms for the thing we know as ‘money’. Quid (singular and plural) is also used for pound sterling in British slang, thought to derive from the Latin phrase ‘quid pro quo’ ‘this for that’. Economists have a language all their own when it comes to money, defining it as something that serves as a medium of exchange, a unit of accounting, a store of value. We all agree to accept it in making transactions, taking money in exchange for goods; employees agree to accept money in exchange for their work. As a unit of accounting, money is a device for identifying and communicating value, working out ‘how much’ something is. It’s convenient, readily understood and gets us out of complicated comparisons in order to establish value, just like numbers themselves helps to think abstractedly in certain ways.

Money serves as a ‘store of value’ in conventional economic terms in that it allows us to keep the rewards of our labour or business conveniently - we store the value of a long, hard week of work in a bank account. Without money, how else could we hold onto something like that for later use? We could be paid in any number of things, items, objects - but we’ve worked out that paper notes, or numbers representing them, will do a better job instead. Paper is light, easy to carry, and can be broken into smaller units for ease of use. But what is money really?

There are people.

And there are needs.

In How Businesses Really Work, we discover that vacuum is a better word than ‘need’. A vacuum generates an actual pulling force which is what brings a person into contact with whatever is needed.

Customers tend to hold onto money, and tend to hold onto it more the less they have. They have needs and desires, and look for the products and services that match those needs and desires. They hold onto money in their pockets and purses until they feel confident enough that their vacuums can be filled in other ways by actual products and services. They judge carefully, usually, whether or not the promise of a vacuum or need filled is worth the ‘vacuum power’ that they have in hand.

At any given moment, a customer with money in his or her hands considers that they have a range of needs potentially and temporarily 'filled' with money, which is an all-round, all-purpose potential medium.

There’s a lot of confusion about money.

That’s because it isn’t a 'thing' at all.

The pound coin in your pocket actually represents a vacuum. The coin in your pocket has a certain 'face value' - if you melted it down, you would get a certain amount of metal from it, which would have a certain worth. But it is what it represents that matters. The more you have of it, the more ‘vacuum power’ you possess: vacuum power that can pull towards you actual things, items, goods and services which will fill the vacuum.

Coins and notes and electronic figures on screens are symbols representing vacuums. Right now, the symbol of a pound is in your pocket. Later, when you go to the shop to get groceries, that symbol will move from your pocket into the till of the shop. From there it could be given as change to another customer, or it could be banked. It might sit in a bank drawer for a while before moving on to somewhere else. It has no real significance in itself. It is the vacuum that it represents that has significance. It’s what it can pull towards the possessor.

People who don’t understand money want to acquire lots of it and desperately hold onto it. This has advantages. It seems as though they are wealthy, that they can survive better. But a pile of metal coins or bunches of paper sitting in a bank drawer do not help anyone to survive better in themselves - they need to be spent in order to have worth. They need to be exchanged for food, shelter, care, material items, comforts, entertainments, property, items, work and so on, to possess any real value.

Once it has been acquired, it can be ‘spent’ in order to fill the vacuum: we spend money to assuage our hunger, to buy shelter for our bodies, entertainment for our minds, succour, perhaps, for our spirit. It’s true that we need it: but getting it is only half the equation. We have to exhaust or use up the vacuum power in exchange for the real things we actually need.

Of course, people with lots of money have rigged things so that it is easier for them to acquire things without even having to spend the money. Someone who has a fortune in the bank will find it easier to get a mortgage on a house, for example; and money in the Western world gathers the interesting thing called ‘interest’ the longer it stays in banks.

Why is that?

Because money is a vacuum. It gradually increases in power as it sits still, like a growing black hole in space.

That vacuum power creates the confidence that enables a house to be purchased. It’s the innate potential of all that vacuum sitting in the bank to exert its force and be exchanged for real things that gives the mortgage lender the confidence to lend the mortgage. And it’s all carefully sewn up contractually so that, if there is any default in paying the mortgage, the actual real, physical property comes back to the lender who can, if he wishes, convert it back to the vacuum called money.

If one fails to see that money is a vacuum, if one regards money as a thing simply to be acquired, then of course one sets out simply to acquire it and sit on it. And if it is never spent or used to acquire other things - if it is, in other words, held completely still and out of ‘circulation' - then it slowly grows and grows, increasing in power.

When more money is pumped into an economy - as with the practice of ‘quantitative easing’ by governments and financial institutions - what is actually happening is that the economy is being filled with more vacuum power. The problem is that, if the production of actual things - goods and services - fails to match this increased vacuum power, there will be a breakdown.

A society gets a craving for real products and services as though it is on some kind of appetite-enhancing drug.

What is wanted is more products and services that match customer needs. Then a society’s real vacuums get satisfied. That means more money changes hands and improves the society’s ‘circulation’.

If we equate the exchange of money between people to the flow of blood, then accumulated profit sitting in a bank becomes a heart attack waiting to happen. Like blood, money must move to be healthy for the people acquiring it. They must exchange it for real things that they need or want.

If instead it is simply amassed, then the resultant inequalities - social classes of 'haves' and 'have nots' that we take for granted - take shape and become solid until they are eventually broken down in violent social revolutions. To get more and more money, people resort to lies, trickery, deception. The more money is valued as a thing, the more injustice arises as a consequence. Injustice magnifying eventually results in social unrest and collapse in the same way that accumulated blood creates strokes and all kinds of other health problems.

An ideal situation would be a society in which vacuums were being found and filled, creating and exhausting money which flowed around, being acquired and spent, so that everyone could have what they needed. While money is considered as a thing, rather than the things money enables one to have, then its creation is a mystery much like the magical, alchemical transformation of lead into gold.

However, if one considers money to be a vacuum, there is no real need to resort to trickery or deception. The 'haves' can grow in number and the 'have nots' begin to disappear; social classes based on amounts of money start to evaporate and injustice melts away.

That doesn’t mean that society becomes one vast egalitarian commune as Marx and Engels imagined - it means that human beings can create as much as they want by finding and filling vacuums.

How exactly can that happen?

In the same way that everyone is a potential customer for something, everyone can be a provider for someone. In other words, just as customers are motivated by vacuums, so are clever providers equipped with the ability to seek, create and fill vacuums of various kinds. Everyone has a skill or talent or characteristic that can fill someone else’s vacuum.

So everyone can generate whatever they need or want.

Isn’t there a finite supply of money in the economy? Eventually, surely, an individual runs out of the funds needed to fill all his or her vacuums?

That’s like saying that there is a finite number of vacuums in any given economy. Of course there isn’t. There are an almost infinite number of potential vacuums, large or small. It may take a little skill to find them, but vacuums are everywhere. And if you can’t find any, they can be created or stirred into life from nothing.