Thursday, March 22, 2007

Does money exist?

On rising from my slumbers this morning, I discovered, with gratification, that the day was much warmer than those experienced at the beginning of the week. Apparently, the jet stream is at its weakest in the Spring, meandering back and forth, and duly switching the prevailing wind direction from a Northerly to a Southerly at the slightest provocation.

Anyway, I bade good morning to the maid, strode down the wide marble staircase, and trotted out a light waltz upon the grand piano in the foyer, before I took some repast. As I ate, my thoughts turned to yesterday's Budget, and what it all means. There's something slightly elusive about economics, and I think it's rooted in the notion of money itself. Does money exist independently of the mind? Certainly, money shouldn't be identified with any of its physical tokens, such as treasury notes and coins. Money is a means of expressing the relative value of different goods and services, facilitating trade and investment without the direct exchange of goods and services. Eventually, we will move to an economy in which there will be no physical tokens of money at all. Financial 'accounts', containing specified quantities of 'money', and owned by specified agents, exist in the memories of computers; like a credit-card purchase today, the purchase of some product will merely require the identification of the purchaser (authentication), then authorisation that the purchaser has the right to make the purchase, and then for a transfer of money to take place between accounts, as a transaction between computers. Information flows between computers, and alters the information stored in their respective memories.

So, given that money once existed only as coins and notes, but will soon exist only in the memories of computers, does money exist independently of human minds? My initial thought is that it does, but only as an abstract structure. Money exists in the same sense that the state space of the electron exists. It has no substance, but things can exist independently of the mind without having substance; structures can exist objectively, independently of the mind.

Time for another waltz.

7 comments:

Duck said...

It is a brilliant concept for organizing economic activity within large scale social structures. American money says "in God we trust" but it's really about trusting the money itself. It's a score keeping mechanism to track the relative worth of personal contributions to society, and the brilliant thing about it, to the extent that it is not manipulated by governments, is that it works in a thoroughly decentralized manner. I think that money is underrepresented whenever the greatest inventions of history are ranked.

Gordon McCabe said...

I'm not sure about the idea of personal wealth representing personal contribution to society, but the point about money being under-represented as one of the greatest inventions in history is a brilliant point.

Neil Forsyth said...

We harbour the ridiculous notion that money is the means by which we can somehow postpone attending to what is important now with a view to making amends later on when we have accumulated enough of it to buy back the lost time. Not sure that makes sense, but it does in my head. Sorry, Gordon. Trying to be pithy. Not that easy, is it?

Gordon McCabe said...

We expend time now, in exchange for money, in the hope that we can reap a pleasure dividend in the future?

Neil Forsyth said...

There you go, got it in one. Why can't I do that? I suppose I'm too tired from earning a crust that my head is a tangle of half-formed thoughts and...I'm at it again, started a sentence and can't think where to go with it. Maybe I'll just leave the smart stuff to you, Gordon.

Brit said...

Very small change - the 1p, 2p and increasingly 5p coin - is getting the point of having a negative monetary value. People speak of 'getting rid' of their change. Some people throw coppers in the bin.

Sid said...

Money doesn't really exist in the true sense of the word. The world bank gives a country permission to print one billion dollars, which it then has to pay back with interest. With the likes of the Rockafellers and the Rothschilds controlling the world bank, one has to wonder how they can justify loaning money to the third world, money that doesn't exist, and making them pay it back with interest. Also how can a hugely important food producing nation like Brazil be so poor and in so much debt?

This is a subject that deserves a lot more thought! :(