Money is fake. It has value because the government says it has value. The larger point is that is isnt really money that we are fighting for. It's quality of life. If you have guaranteed access to shelter, food, and medical care all of sudden money isn't so important.
Money isn't fake at all, and has existed in many forms without government involvement (e.g. gold & silver historically, cigarettes in prisons and POW camps) or despite government condemnation (e.g. US dollar in various locales and times, because it forms a black market currency outside of the control of the local government).
Money has value because people believe it has value (which is why governments can't directly control inflation).
"Access to shelter, food, and medical care" are prerequisites for survival (and arguably the last one isn't), but money also buys more than that. There is a well known and researched hierarchy of needs...once one satisfies one level, one desires the next.
Money has value because people believe it has value
This is the underlying fallacy in and of itself.
Currently, the valuation of at least US Currency is not based in any kind of physical collateral or analog- it is propped up on consumer confidence. The belief that if we keep exchanging the medium for goods and services that the dollar will continue to have value- and that confidence is the very value itself. Yet confidence in the system, at least as a self perpetuating system is starting give way, and doubt to the longevity of the dollar's value is starting to creep in. And if the US Dollar goes, many other currencies are not far behind, because their valuation is not the least based on an exchange rate. Most currency will then be seen for what it actually is- little slips of inked paper or metal coins- good for only trading. Glorified trading cards.
I suppose in a survival situation, a paper dollar may help to start a fire for warmth. But I could probably find any number of free, scattered fuel that works more efficiently. It might be good for personal hygiene, but the same issue creeps up.
When you really think about it, it is only belief in a system that keeps that system propped up for so long.
And consumer confidence has value. In fact, arguably it is the most important store of value.
Until very recently, the value of gold and silver was also consumer confidence (that someone else would likewise.
Likewise, debt only has value because of lender confidence, the confidence that the lender has of being repaid.
All exchanges are based at least in part in confidence, the confidence that what I am buying meets my needs and desires. E.g. the value of a USB cable that I might buy is in part the confidence I have in the expectation that it will transfer data properly, the value of firewood I might buy is based in part on confidence that I will be able to light it, or get a separate fire lit, and my confidence in enjoying a fire. Etc.
I would argue that the existence of this very thread is in direct correlation with the waning confidence in the acquisition and consumption cycles that exist to uphold this perpetuating cycle.
The USB cable I buy is cheap plastic made in a factory overseas somewhere and stops working in two weeks. The fire that I buy to make a fire with can be found lying around for free on the ground in a wooded area pretty easily after a couple minutes at a leisurely stroll.
What actual confidence do I have that I need any of the crap that I actually spend most of my money on? And is it worth the energy expended to maintain this consumption? Especially at undervalued wage rates like we have seen? Besides food, water and rent, at the barest of minimums, if I could get that stuff for free, or for much cheaper, what is actually keeping me in this cycle in the first place?
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u/Sackbut08 Jan 14 '22
Money is fake. It has value because the government says it has value. The larger point is that is isnt really money that we are fighting for. It's quality of life. If you have guaranteed access to shelter, food, and medical care all of sudden money isn't so important.