Wait a minute – What is money?
This post is inspired by a reason debate on the Mises Scholars list about ‘is money a consumer or producer good? Or does it fall into a third category?’ which has gotten me thinning about: What IS money?
This is not a question that allows an easy answer, and probably something I need to address again in following posts. But for now, we can look at money in two basic ways: Money is either a physical object produced either by man or by nature. Or money is an immaterial object that serves specific objective in human society. If we first contemplate money as an immaterial object then the question is: What specific objective does money serve in human society? – I would argue; and so would Marshal McLuhan, Murray Rothbard, and Ludwig von Mises, that money is the medium in which human communicates value. In this view money is, despite its physical representation, a form of language in which human society coordinate the individual consideration of value and what is valuable. Then, the answer to the opening question then would be that money is neither a consumer nor producer good, since it is a medium for human communication.
But, what happens when money takes a physical form; for example, as a gold coin? First, we get an elucidate distancing between what is and what isn’t money. Secondly, when money takes a physical form, then whatever material chosen would have alternative uses and therefor there will be a trade of between that uses as money and endless alternatives, in it self is this an economical determination. But since the physical characteristics of money do not change the role that money plays in the economy, the physical form becomes irrelevant for our examination of what money is.
What is important though is what role money plays within the economy and the production of goods? William Barnett II and Walter Block Argue in their paper ‘Money: Capital Good, Consumers’ Good, or (Media of) Exchange Good?’ that since money provides value to the production process itself, but starting it, we should consider money to be a producers’ good. If that were true then would it not also be equally true that language then also is a producers’ good, since one individual would use language to communicate the desirer of transfer value, as money, to another in exchange of a good? Without knowing it I am sure that both Mr Barnett II and Mr Block would Concord with me in the considering that to be absurd.
If the conclusion that money is the signal that the market sends to the producer that it requires more goods produced and therefor is money not connected directly to the production process, is not satisfying then I am sorry, but it is the best I can do right now, but I am sure that I will advert to the question of what money is, later.
This is not a question that allows an easy answer, and probably something I need to address again in following posts. But for now, we can look at money in two basic ways: Money is either a physical object produced either by man or by nature. Or money is an immaterial object that serves specific objective in human society. If we first contemplate money as an immaterial object then the question is: What specific objective does money serve in human society? – I would argue; and so would Marshal McLuhan, Murray Rothbard, and Ludwig von Mises, that money is the medium in which human communicates value. In this view money is, despite its physical representation, a form of language in which human society coordinate the individual consideration of value and what is valuable. Then, the answer to the opening question then would be that money is neither a consumer nor producer good, since it is a medium for human communication.
But, what happens when money takes a physical form; for example, as a gold coin? First, we get an elucidate distancing between what is and what isn’t money. Secondly, when money takes a physical form, then whatever material chosen would have alternative uses and therefor there will be a trade of between that uses as money and endless alternatives, in it self is this an economical determination. But since the physical characteristics of money do not change the role that money plays in the economy, the physical form becomes irrelevant for our examination of what money is.
What is important though is what role money plays within the economy and the production of goods? William Barnett II and Walter Block Argue in their paper ‘Money: Capital Good, Consumers’ Good, or (Media of) Exchange Good?’ that since money provides value to the production process itself, but starting it, we should consider money to be a producers’ good. If that were true then would it not also be equally true that language then also is a producers’ good, since one individual would use language to communicate the desirer of transfer value, as money, to another in exchange of a good? Without knowing it I am sure that both Mr Barnett II and Mr Block would Concord with me in the considering that to be absurd.
If the conclusion that money is the signal that the market sends to the producer that it requires more goods produced and therefor is money not connected directly to the production process, is not satisfying then I am sorry, but it is the best I can do right now, but I am sure that I will advert to the question of what money is, later.
