What is money (in reality)? What is value (in reality)? These concepts are key to understanding today's system of commerce.
Our economic system is a state of chaos today as the old model of DEBT has created markets which will collapse in a few months. We now need a NEW MODEL and new thinking (especially for our young). We now have the technology to produce ABUNDANCE for this planet. The old situation of SCARCITY (which created our money/value ideas) can be updated as we are entering a time of ABUNDANCE. But we need to THINK differently for this new time period which is emerging for our planet. What do I mean?
We can eliminate two economic 'illusions' (going forward) as we rethink our situation for economics and commerce. Under 'scarcity' we needed these two 'illusions' to survive. Today, however, we can eliminate these 'illusions' and create prosperity and abundance for everyone on this planet (without thinking about these illusions). Let's think on this idea that we live with TWO illusions that deceive and confuse the markets. What are these 'illusions'? Why can they now be 'eliminated'!
1. VALUE (the core illusion): economics started out with scarcity, private ownership of goods, and then barter (exchange). This subjective concept called 'value' emerged within our thinking so I (you) could exchange goods in the marketplace. I could exchange my bread for your eggs (let's say). This concept of 'value' emerges as we think about this exchange from me to you. What is the 'value' of my bread when compared to the 'value' of your eggs? We need to exchange 'value for value' so both of us a happy with the outcome. Exchange produces this subjective idea called VALUE.
This inner (subjective) concept of 'value' is what is core to all economic exchange. This 'illusion' of my mind (your mind) gives us an exchange that we can accept as objective (fair). But how can I exchange my COW for your eggs? It gets complicated when I have a product which you may not desire. I might know what the 'value' of my COW is (subjectively) but you would need to accept this 'value' and then create an exchange for your eggs if the transaction is to happen. This means we need a better tool for measuring 'value'.
So what might we INVENT to serve as a 'proxy' (substitute) for 'value'? Let's say we both view a SILVER coin as a viable proxy. If this coin is (say) precisely one ounce of pure silver, then we can exchange my COW for your EGGS in terms of silver coins. If I further define this one ounce of pure silver (the coin) as equal to a DOLLAR (a paper currency note) then we can make a transaction easily with paper notes (and avoid the process of barter). It's all a 'numbers' game at the core (when based upon logic, trust, and confidence).
America actually started the $ (dollar) with a definition in terms of pure silver (back at our founding). Our government then created a MINT which could produce silver coins for the people to use in their marketplace of exchange. Silver became the proxy for VALUE (after our American Revolution). The Coinage Act of 1792 established definitions of our money units and this produced a LOGIC for valuing goods and services in the marketplace. Confidence emerged when consumers bought and sold goods and services in the marketplace. Thomas Jefferson was the key founding Father for these ideas!
The U.S. government enforced the definitions so that everyone could view the system as JUST and LOGICAL. All worked fine for a time period (decades) until leaders and people found ways to distort and subvert the system. Money then evolved with new definitions and eventually with NO definition (as today). Today, we monetize a good/service with mere 'imaginary' fiat numbers created by a computer (operating behind closed doors). Value is meaningless and our money units are mostly meaningless (long term).
Today, our monetary authorities want to create DIGITAL units of money to serve as units of VALUE. This mindset corrupts the entire exchange system and favors the FEW who have connections with the MONETARY AUTHORITY (today this is our Central Bank). Monetary wealth gets distributed unfairly to a select group and the masses get enslaved by the system (now computer identification codes/numbers). It's become a corrupt and unjust system which our YOUNG need to change (if they want market freedom).
2. MONEY: this idea called money was invented (historically) to solve the issue of VALUE in exchange (under a system of scarcity). Value was a concept which was invented in a marketplace of SCARCITY where goods/products needed to be exchanged in a private marketplace. Barter was a problem as the double coincidence of wants was difficult to arrange. A COW for eggs does not work easily and this means that MONEY units (if invented) can be more logical, fair, just, and efficient. America's Congress recognized this issue back at our founding and this produced the Coinage Act of 1792 to solve this problem.
Scarcity and a private market needed money units which people recognized as having VALUE. Silver and gold were chosen as having intrinsic value (at that time). This allowed our government to create DEFINITIONS for a currency unit (the dollar) so that our DOLLAR was viewed as having VALUE in exchange. All this worked (with many distortions and corruptions) and today the entire monetary system has become corrupt, illogical, and unfair. Few understand the history. Is it now time for the YOUNG (say everyone under 30) to get educated on issues of money/value and a NEW MODEL for our marketplace?
My sense is that the YOUNG must get educated if they desire to live a free, just, and happy life. Our money system is totally corrupt and we now need a NEW MODEL for our economic system of commerce. There are new technologies which can help us going forward. Our Smart Phone (for example) can produce APPS which could replace money/value when distributing goods/services. Yes, Smart Phone Apps could replace money for our entire planet. Real freedom in commerce could emerge if our resources were also viewed as GOD given and God owned. New thinking is required if a NEW MODEL is to evolve!
Start to THINK about these concepts of money which emerged from the prior INVENTION of people. Solving a problem of exchange is the issue. Freedom is an important issue. Honesty is another important issue. We now need a NEW MODEL which our YOUNG can buy into. Our existing model is DEAD and CORRUPT. We need to THINK anew and develop a NEW MODEL for the entire planet. We have the technology to do this for the entire planet. Automated production, robots, artificial intelligence, and our internet system can assist with our PROBLEM. It all boils down to new CRITICAL THINKING!
Have a great day as you put on your thinking cap and then develop emotions for action. I am: Donald B. Swenson, Economist/Philosopher, donaldswenson.blogspot.com.
http://kingdomecon.wordpress.com
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