- Capitalism and Alternatives -

Re: Absurd value placed on money

In Reply to: Re: Absurd value placed on money posted by will on May 10, 1996 at 14:02:22:

: Its truly sickening- you can't eat money, can't make
: clothes with it, no good for building houses, it
: makes really bad entertainment (tried reading a
: bank note?) - and most importantly, the people
: who need it most (the poor and those excluded from
: society) have so little, and those who use it
: so irresponsably (McD, most governments, armys etc)
: have it all

: its not absurd - the bastrard just have us completly
: stiched up

.
Sorry to butt my economist's ass into this, but I would like to clarify what the value of money is, and what the original author of this topic was probably complaining about.
Money is merely an exchange medium. It is far easier to choose one commodity as the mediator of exchange ratios than to use a barter system. We happened to use gold (before fiat) instead of bread because it isn't perishable, is easily divided, is fungible, is scarce, and has remained costly to extract from the earth. The utility of money (the actual value of money versus non-money commodities) is measured by added efficiency in using one exchange ratio instead of a billion for each good. The ratio of a CPU to rice pudding would be more than the ratio of their current market prices if you bartered instead of using money. Similarly if bartering was cheaper (as often is the case because of the IRS) then we talk about the disutility of money.
What the original author probably was referring to was wealth, which is only valuable so long people value whatever goods the wealthy man owns. I personally don't know why McDonald is wealthy, I don't value the crap he sells. Keep in mind (other than using government coercion to his favour) he has gained all his wealth through voluntary trade and is completely subject to the taste of his customer base (and stockholders for that matter).
As for using wealth æirresponsablyÆ (irresponsibly?), if I traded my $1 bill for your McDonald's sandwich and I flushed it down the toilet, is that using my wealth irresponsibly? Now certainly taxes can be used irresponsibly given they are extorted assets to begin with. However I can't see the same standards being placed to wealth which rich people own, and gained through voluntary trade.

• Clarification on the value of money

Follow Ups:

None.