Why money exists and how we should be thinking about it.

When people think about money they tend to think about greed and all that is wrong with the world. We have grossly mis-understood the meaning of money.

Firstly we must understand its origin. The original form of trading was barter trading. A good or service for a good or service. This was inefficient and limiting — productivity was dependent on the individual or at most a small group of people. There was no feasible way to organise a large number of people to produce vast quantities and frankly to try would be a logistical nightmare. If an individual for some reason could not produce a product or was unable to render a service they would not be able to obtain a good such as essential food for that day until they could be capable of contributing something valuable — essentially “starve until you can work.” Until the inception of money there was no sustainable and universally accepted way to store value. Money fundamentally is an “I owe you.” “I cannot barter with you at the moment but I would really like the cupcakes so I will give you a piece of paper with a number on it with equal value as the cupcake and later you can trade it for a good or service of equal value from me or anyone else.”

Money is fuel, a car needs fuel to get from point A to B and money is the medium we use to push human advancement forward. We use money to organise people people and incentivise their cooperation to produce goods and services at exponentially greater levels than we ever could as individuals. Money for the majority holds the hopes and dreams that tomorrow will be a better day than today. Money in the capitalistic sense makes sure that we can extract as much value as possible from the most knowledgeable or skilful members of society until they have nothing more to give. Their contributions benefit all of humanity thus they are rewarded disproportionately to others which inevitably results in inequality. The world is better of with those contributions than without them even if any inequality develops as a consequence.

How we should think about money is — “What can I do today to provide value to the world so that I could be compensated for my labour?” Or “What meaningful contribution do I posses that the world finds valuable enough to compensate me for.” Money is necessary for survival, its role is not to create greed but encourage meaningful contributions from every individual.

It has made what once was the dreams of our forefathers the reality of today. It’s a guide to show humanity where the most important issues to be worked on are. Do not chase the money, chase the biggest problems of your day and money will follow you.

Ambassador and Content Writer at Entre. At the cross section of previously unconnected ideas exists real creativity. https://entre.link/Ashley