Should we get rid of money?

What money in its essence really does for us

The other day when we took the kids to a tour of a heritage centre, the guide elaborated how the town’s medieval market was only accessible to the upper class as others were not allowed to own money. I asked whether barter was an option too and the guide not only confirmed it was – obviously – big at the time but even became quite common ten years ago when in the aftermath of the global financial crisis unemployment was very high.

Another visitor chimed in claiming that this was likely going to be the future again „with all the capitalism and greed“ where everybody was just trying to see how much money they could squeeze out of each other.

They went on and even agreed that whilst most things were worse in the middle ages, the prevailing of barter over the use of money was not.

Wow! I stood there, speechless and unsure how to react.

Well, this is how I do now, with a bit of time to reflect and realising this misconception about money and its role in everyday life is more prevalent than I thought it was.

Why do we need money, what is it even, really?

Money is really just a good that we trade in. Back in the days it may have been rare spices, stones, shells, or gold and silver. Nowadays it is just currency, i.e. state issued cash (bills and coins) but mostly bank issued credit, visible just as numbers on an account statement with no tangible existence. It has moved from a traded good to a traded service really but in essence it remains the same. A traded item used to facilitate an ever increasing division of labour, which in turn is the great enabler of progress and wealth. More important even, the use of money made trade as easy and common as anything could have. And trade is crucial for our lives, I‘d even say it is crucial for our survival.

Let‘s contemplate for a brief moment how a day in your life would look like if there was no trading at all. If everything you used and consumed would have to be produced by yourself.

You wake up in the morning. No bed. No house. Perhaps a cave of some sort. You feel hungry. If you‘re lucky, there are a few berries or fruit to be picked somewhere close. Prefer a piece of bread instead? Well, for that you would have had to plant (or find) wheat a while ago, you would have had to grind grains to flour and find water (I am not even considering yeast or salt here). You would have had to light a fire to bake the very basic bread. No matches available, just in case you needed a reminder. So baking bread alone might have taken you a day or so, and that was if you were lucky enough to have the grains, the water and the fire. Fancy a coffee? Or feeling chilly and want to put on a sweater?

Well you get the idea – no trade and it would have been a stone-age you, even worse actually as presumably even then some level of cooperation was required. And that is ultimately what trade is – cooperation. Mutual cooperation.

Now, as the guys in the museum understood quite well, there is no involvement of money required to cooperate and to trade. Barter can do. It‘s limits, however, are obvious. If you are, say, a baker then you can certainly trade with the farmer some bread for a bag or two of potatoes, or a bucket of milk. You can probably also agree to provide a year‘s supply of bread to the family of the mason for him to spend a few weeks building the walls of your new home. On the other hand, as a baker you need to procure plenty of flour. Where will you get it from? The miller, of course. What do you trade with him, though? Bread? Assuming he supplies to other bakers, too, he‘d get a lot more bread than he and his family could ever eat. Of course, the baker could instead pay with items that he traded for bread with others, such as pottery, flour seeds, horseshoes, a painting or even just plain paper.

But again, you get the idea – this is going to get complicated very quickly and before you know it everyone will have a stash of stuff they don‘t really need but hope to be able to trade for something they do.

It is going to be outright impossible if you ban money from and substitute it with barter in todays world. What do you do for a living? Do you maintain an important computer software, program it or provide support for IT systems? Do you write? Good luck with trading that service for your coffee, netflix subscription, or haircut. Perhaps you‘re a surgeon and need some plumbing done in your home. Or a cab driver in need of new tyres for your taxi. I don‘t know, this gets already way to complicated for me to even think of how this plays out. And I haven’t even started considering medical research, telecommunication or airtravel. Call me a simple mind but I say we need something that we can use as a more convenient medium of exchange, i.e. as money. Something to help us get remunerated for our services and in turn be able to procure what we need to do our job and to sustain a living.

Not sure what the guy taking the tour with us would have had to offer in return for admission to the heritage centre, but I am fairly certain that had he thoroughly considered the impact of ridding the world of money, he would have reconsidered his statement.

But, you may think, this hasn‘t been thought through all the way. Do we even need this high degree of division of labour? That alienation of the worker from the product of his toil?

I‘ll restate the question and ask: do we need this high degree of cooperation and specialisation?

I don‘t know. Do YOU need it? How much of what you have currently others do could you do yourself? And I don‘t just mean in terms of ability, but also in terms of resources, mostly time. If you‘re, say, a chef and own a restaurant – do you NEED someone to take calls for reservations, to prepare the tables, to take the orders from your guests, to serve the food, to clean the place and kitchen, to maintain your website, or to repair your oven? Maybe you COULD do it all yourself. But if you did, you wouldn‘t find the time to cook anymore. Especially when it comes to waiting the tables – that may work in a very small restaurant but chances are that you end up with a very dissatisfied clientele.

Long story short – with no money, there would be no modern live as we know it. I‘m inclined to claim, there would be no civilisation. Me back in the middle ages – no, thank you. And that is apart from the fact that most probably I‘d have never even gotten to my age but died some sort of gruesome death long ago.

Even with money being as flawed as it is today – a topic to elaborated some other time – I am grateful that our cooperation can make use of something much more useful than just barter.

Related posts:

This is a keyword simply use to set and retrieve values by index without the need to separate methods for setting and retrieval. It is a shortcut for accessing the member elements of a collection…