Money is a Conversation

There’s a lot of talk about this bitcoin stuff - digital money, that’s supposedly configured and distributed in a way that makes it difficult if not impossible to fake it or alter it. The folks who are raving about bitcoin have become fond of the term “fiat” currency, to distinguish bitcoin from “conventional” currency, which is only based on the say so of the country that issues it.

 

Thinking about it for a minute, though: ALL currency - indeed, all cash, coin or any other token of exchange - is “fiat”. Gold is often mentioned as a superior alternative to the conventional “money” - dollars, euros, pounds, rubles or yen. But why is gold worth anything? What is gold even actually WORTH?

Gold is just another thing people exchange in return for something they want: goods, services, commodities, whatever. Consider this, though - you can’t really spend gold. Try walking into your local diner, put a brick of gold on the counter and order some breakfast. Good luck with that. At the end of the day, you’re still going to have to convert it into that tired old “fiat currency” in order to get what you want.

 

Because money is not the thing we exchange - money is the act of the exchange. Ultimately, some kind of trade takes place, like I give you a certain amount of my time as labor, and you give me stuff I can use. Back in the day, it was a direct trade: you have a farm, I help you raise your barn, you give me some milk, eggs, a slab of beef, whatever. Over time, the trade grew beyond direct bartering because you didn’t always have something I wanted in exchange for my time, effort or bartered item. Thus, money was born.

 

It’s just a substitute. Substitute for what, you may ask? Why thank you for asking, kind reader - it’s a substitute for the conversation about trading values. These days, we call these conversations “negotiations”, but in essence, it’s all the same. At the end of the job interview, you negotiate the salary. A contractor stops by to give you a quote for building a deck in your backyard. You haggle with the car dealer to get the best price for that brand new car.

 

Conversations. We find ourselves now in the midst of a global pandemic that has put the brakes on the machine of the economy like never before. However, the conversation still continues. What is of value? Ironically, people who were scorned as a scourge to this country (and justification to “build the wall”) are now deemed “essential workers” because we realize we can’t belly up to the all-you-can-eat salad bar if nobody toils in the hot sun and picks the veggies.

 

This is, of course, an extreme example. Still... what is YOUR value? To whom are you most valuable... and what conversation is there for you to have? Conversations that will, eventually, become money??