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What is money? [Jan. 3rd, 2012|03:26 pm]
Aaron Wissner
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If you are looking for a better answer to the question, "What is money?", then you've come to the right place.

Rather than explaining what others say that money is, and then going into a back and forth about why it isn't really that, I'll just tell you what money actually is.

Money is a promise.

If you have some money, perhaps a dollar bill, then what you have is a promise from the people who live in your country to give you something in exchange for that promise.

Promises are pretty tough things to put a number on, and yet that is exactly what money is. For each different denomination, we have agreed to how big the promise is. A ten dollar bill is ten times the promise as a one dollar bill.

If we would like someone to give us something, then a ten dollar bill will get us ten times as much as a one dollar bill.

When you first received that dollar, it was a gift from someone. You may have received it for giving something to them; or perhaps because you will be giving something to them; or perhaps because they just wanted to give it without any apparent reason.

What we call work is when we give something to someone else, and then they give us a gift, and that gift is money, or more likely, credit. That credit is kept track of at a bank of some sort.

Promises. Money is promises. And, it has always been that way, even back thousands of years in ancient Egypt and Mesopotamia.

People like to get promises because, within a country, everyone agrees that when they are willing to give things, that they will accept promises (money or credit), in a certain amount, as a gift of equal value, which they can then give to someone else, in order to get something they would like.