What is Money?
A question with an evasive answer
One of my favorite podcasts over the last couple of years has been the What is Money Show with Robert Breedlove. Breedlove questions the essence of money in order to lead his listeners down interesting rabbit holes with diverse destinations. His guests are often incredible thinkers with unique outlooks on economics, physics, psychology, anthropology, and much more.
At the end of each episode, Breedlove asks his guests to describe what money means to them. It’s a simple question that has produced a fascinating set of answers. Many of those answers have inspired me to think about economics and value from a wholly different vantage point. I have gone back to many of the ideas I learned in these episodes as I continue to make sense of modern economics and technologies.
In this blog, I have compiled several of the answers to the question ‘What is money?’ I’m certain that not one of these answers completely captures the full essence of modern money, but I found each perspective to be interesting, and I hope you do too.
Michael Saylor - Money is power
‘Money is power’ is a cliche that many of us have heard frequently throughout our lifetimes, and it is often how money is portrayed in the media. From Saylor’s viewpoint, there exists a good amount of truth to this phrase from a technical perspective. To him, money is the highest form of power, or what he calls the superset of power. For example, wars convert kinetic energy through force into power. Atomic energy, harnessed in the right way, can be converted to extraordinary amounts of power. If you dam a river, you can convert gravitational energy into power. Ultimately, all of this power is distilled and converted into money where it can be optioned more efficiently. Money gives the holder the right to recycle that asset into power or any other object that can be purchased. Therefore, money represents the amalgam of all of the collected power harvested by humankind to date.
Jeff Booth - Money is the agreed upon concept of our time
For Jeff Booth, we store our time in money. When we sacrifice our energy for the pursuit of money, we are giving up the present in hopes that our future will be brighter. Our time is erased when the money is degraded through inflation or by other means. Additionally, time is compressed for those who are not in the top 10% of earners who seem to accumulate more and more money, and therefore more time. The paper money that is in our pockets or the digital money that is our bank accounts is in itself worthless. The value of the money you own lies in what it can buy you. The true value of your money is only realized when it is converted into the good or service that you want.
Preston Pysh - Money is an extension of our mind
In Pysh’s view, money is a distributed model used to value things including our time and the many goods and services available to us. When this model is broken by way of manipulation from central planners or governments, then many other mental models are also broken. Pysh calls money a reflexive tool for the mind. In that, the quality of today’s money is a window through which we can examine our state of affairs and grade our monetary models. Money also represents an economic neurotransmitter meaning that money is equivalent to the set of chemicals that a human body cannot function without. That analogy points out the inter-connectedness of the web of human thoughts, decisions, and investments that are all connected by money.
John Vervaeke - Money as a psychotechnology and physical technology
To Vervaeke, money is what he terms psychotechnology, and by that he means it is a way in which we process information in a standardized fashion that improves the cognition and functionality of a group of people. The invention of coinage gives us a sense for what Vervaeke means. Coinage is a psychotechnology in that its invention represented a step change in our ability to exit the barter system and enter into a new world of standardized commerce. The many knock on effects of coinage were not immediately realized by society at large when it was implemented. Coinage forced the general population to improve their arithmetic as prices in a common currency were established and accepted. As a result, the language of accounting was created to organize trading activity. The world became more more financialized after coinage was invented.
Vervaeke goes on to explain that money is like literacy as it links us all together though we may be from different places and have vastly different lived experiences. There is a highly distributed nature to money because it does not retain value without discrete agreement in a population of people. You cannot create money on your own in a vacuum.
Interestingly, Vervaeke sees money as a mediating force between the individual and this distributed cognition of value. As a tool, money helps us fit better to the world around us. As you expend time in pursuit of money, you expect others to agree to the same rules when you enter the marketplace of goods and services. Money helps us to relate to one another when we come together to exchange the fruits of our labor.
George Gammon - Money is a way to store your excess productivity
Gammon doesn’t see money as equivalent to wealth. Gammon sees monies like fiat currency, gold, silver, and bitcoin as ways to store an individual’s excess productivity through time. Each of those assets has a different shelf life based on the supply and demand dynamics and government influence on those types of money. Wealth, to Gammon, is the society’s ability to produce goods and services and not the unit of measurement that we use to value that productive output. We can grade the health and wellness of the economy and population based on assessment of the quantity and quality of those goods and services through time.
Lester - Money is a counterweight to all things with value
Pseudonymous guest, Lester, sees money as a counterweight or the opposite of value. He sometimes calls money the antivalue. To Lester, money is merely a reflection of the economy that the money serves. Like a stock, money units represent a share in the economy. When you dilute the money; you dilute those shares to the detriment of the shareholders. Lester also believes that the concept of store of value is not an inherent property in the known universe. There is no law of physics that maintains that gold should be the ultimate store of value over time. But, now that we have money, we will never not have money. That toothpaste cannot be placed back into the tube.
What is money?
There is no narrow and universal answer. It may be that each individual decides how to perceive money and how to value all of the goods and services at our disposal. I think the mental models constructed by the individuals above are incredibly useful in helping define the essence of money. If we strengthen our individual senses for the concept of money, then it follows that the distributed sense for money will also be strengthened. It’s important to improve the tools at our disposal so that we may be propelled forward as we face novel and diverse problem sets.
If you want to learn more, follow this link to Breedlove’s website: https://www.moneyshow.com/expert/876e9c31bbab40d094f9a34c31639f0f/.