Money — to be or not be?

3 mins read

By Matthew Gibson

Money seems indispensable. It is almost impossible to imagine going through a day without using money, or something that we have already bought with money. When we talk about money in a colloquial manner we normally refer to three things: something that allows us to engage in exchange without bartering one good for another; a means of tracking value; and a store of economic value over time. Money’s ubiquity in much of contemporary human experience does not make it by definition a necessary part of our lives, however.

Two broad approaches can be taken to arguing against the necessity of money in everyday life: either that it should not be essential or that it is actually not that important. The first of these, and the more traditional approach of being “against money”, is to see the functions of money as leading to a normative wrong. The second approach argues that in some sense what we would colloquially call money cannot be found as a phenomenon within the real world. This amounts to an ontological critique of money.

The field of Marxian economics offers the most well-known normative critique of money. Broadly, the Marxian account focuses on the ability of money to represent an abstracted value of a commodity. If we are to exchange goods for money rather than for other goods which we see as of equal value — a monetary rather than barter economy — then money acts as a standardised value for all goods. Modern economies use fiat money, where the value of money is not tied to the value of another good such as gold. As such, the value of money is essentially arbitrary. This creates a divide between the objective value of money and the subjective value that we place upon objects and the products of our own labour. A dislocation between these values contributes to the broader sense of estrangement within our lives. This leaves us unsure of both the real value of our own work and the material products around us. For those who accept estrangement as a normative bad, the Marxian account justifies not using money as a solution to this.

An ontological critique of money leads us in a different direction, focusing on the properties we attribute to money. When thinking about the ontology of money, we first need to look at whether money itself has the properties that we attribute to it, or whether it brings together a range of separate properties that we can find in other, more basic phenomena. This is an important distinction as, if the latter is true, then money is reducible to other social phenomena, and could in practice and discourse be replaced by direct attention to the underlying phenomenon. A useful starting point here is to look at whether it is possible to imagine goods which perform one of the functions of money, but not all. If it is possible, then money could simply bring together a range of different economic phenomenon, rather than being a distinctly novel phenomena. So, for example, fine wine is a store of value over time but does not help us develop a system of abstract value and could therefore not function as money.

A problem that seems to arise from this account is that fiat money is treated as though it has value in and of itself. This would seem to suggest that money has distinct properties in itself. In the case of wine, or any other store of value, we generally hold that it is valuable because it is desirable, whether that is because, for example, we find it useful or aesthetically pleasing. However, with fiat money what replaces gold or silver is trust in government and a belief in the continuation of the current economic system. The value of money is therefore not intrinsic but rather emerges out of a promise by the state. Money, while thought of as belonging to economic life is also part of a wider web of social and political life. As such we need to cast a broad net when thinking about the phenomenon of which money is composed.

Money therefore seems to be composed of a range of phenomenon and does not have special properties in and of itself, meaning that we could in theory directly talk about the more basic phenomena which underlie it. Money does not, in a sense, distinctly exist other than as a placeholder for a range of phenomena. This does not rule out normative critiques of money, however. If anything, this approach helps to clarify which constituent parts of money are subject to critique. The apparent necessity of money in our everyday life therefore needs to be questioned.

By Matthew Gibson

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