You have heard it uttered over the years by mindless idealists of virtually every stripe that, “money is the root of all evil.” Alternatively, some will take a completely altruistic but similarly mindless stance by saying, flippantly, “it’s only money.” Personally, I make zero attempts to understand the irrational but, and although convoluted, there may be a “reason” some people say these things. What such an attitude or perspective reveals is utter confusion over not what money is, fundamentally, but rather what we have allowed money to become. To explain this, one needs to have a fundamental grasp of money.
To understand the state of money, one needs to have a basic understanding of its systematic implementation, known as a monetary regime. A monetary regime is any political jurisdiction’s (such as a sovereign nation) legal system of using some other means than barter to facilitate goods and services exchange. This definition also extends to goods and services exchanged between traders from other jurisdictions and those members of the subject jurisdiction. Given a division of labor premise where producers and consumers engage in specialization, yet need a variety of goods and services in order to survive, it makes zero sense, being a coffee bean roaster, to drive out to a farm with your beans (that you obtained by traveling to Costa Rica with a stock of sandals the plantation owner needed to trade locally for drying equipment) and trade for lamb parts so that you can take a leg of a lamb down to the grocery story and barter with the grocer for milk and eggs (who has all the beans he currently needs, but will trade for lamb). One can conjure up a myriad of illogical combinations and permutations of barter that would illustrate just how impossible life would be.
In fact, without some intermediary medium of exchange it should be rather obvious that the very division of labor we have come to rely upon, and which has allowed for light-year leaps in economic efficiency and productivity (and the resultant boom worldwide in standards of living), world-wide would grind to a halt tossing everyone into stark raving poverty and distress. There can be no doubt given the long view of history that is at our fingertips that even the factory worker, garbage collector, or postal mail carrier of today has at his or her disposal a realm of possibilities of action through this medium of exchange to live as a modern Renaissance man. The average worker today can afford both the time and the investment to live a life which the ancient Greeks thought only possible by a slave-owning aristocracy. This fact is due entirely to the economic efficiency brought to human existence by the theory of division of labor.
Therefore, instead of trading cattle parts for milk and eggs we use a device, money, which represents the specialized productivity embedded in the labor of the cattle rancher. When the cattle rancher goes to market, he exchanges his cattle for an amount of money (a medium of exchange) agreed upon either at the moment (on the spot), or a price guarantee agreed upon prior to delivery (futures). All others who, not raising cattle directly, desire it base the amount of money due the cattle rancher upon the current level of demand for beef. Moreover, all of those others in this simplified equation need to eat and consume many other goods and services in order to survive and to engage in similar other trades and transactions with others who themselves specialize in a myriad of goods and services. The sum total of all of this represents “the marketplace” of final goods, raw natural resources, commodities, and services. Very little would happen, as you can easily see, were it not for the ability for the division of labor specialists, in the face of the actual demand for the goods and services they provide, to produce anything unless they can quickly and easily exchange and keep this medium of exchange. Money and its equivalents is the oil in the crankcase of the division of labor engine. An engine which powers the vehicle of freedom and continuously increasing standards of living for humans – capitalism.
The cattle rancher, and the bean roaster, the butcher, baker and candlestick maker take that money only on the clear and unambiguous understanding that they will be able to exchange it for the product of the efforts and production of others who produce things they need and want. Money, then, is your claim upon the labor and work of the mind of others who also produce something, which is of value – of value to someone, somewhere. It is, by definition, the tool of exchange for the men and women of goodwill – it is, in fact, and profoundly, the root of all that is good. It allows for no fraud, and demands the best of our virtues particularly independence, productivity, and pride. In order for our virtues to be reflected in our trading, the mechanism used, the medium itself, must be virtuous. The medium of exchange must be backed by an object whose intrinsic value cannot be subject to the whims of politics, the irrational wishes of the hedonist or the altruist, or the dictates of tyrants. Indeed, a division of labor society enabled by such a medium of exchange is a truly capitalistic society; it is inherently moral and virtuous. It is not the tool of the preachers, the teachers, or the politicians who claim it by mystical revelation, perceived need, or governmental coercion at the point of a gun. It is the fundamental tool of men and women of good faith, good will, and honesty who understand that man can only survive by the productive use of his rational mind and through the honest labor of his hands. The money you acquire, use, and hold is a tacit statement of your conviction that there are others who will not default on that conviction.
The fundamental keys for any such virtuous medium of exchange are that it must be legally established and defended by the rule of law, reliable, relatively scarce, cannot be counterfeited, and must be divisible into logical portions without destroying its fundamental value (each of ten pieces of a single unit, must be worth precisely 1/10th of the original single unit). Moreover, it must also be able to be stored (saved), and when retrieved have a predictable ability to once again facilitate trading and exchange at a level roughly equivalent to the value at the time of saving, adjusted (increased) for any lost value were it to have been used for other, immediate, productive use. In addition, it must be acceptable as a payment for debts when they come due (and the lender who is repaid after the loan period must not be placed in a worse position, in effect, again, a reflection of the time value of the medium). Lastly, as regards the relative scarcity of the medium, the increase in the supply of the medium must be a by-product, or reflection, of the general increase in productivity. This is so because if the medium were not relatively scarce, and not highly valued in and of itself, there would be a distinct tendency for its supply to increase more rapidly than the supply of other commodities; leading to each additional unit being worth relatively less, and therefore take more of them over short periods of time to purchase a fixed basket of goods and services, i.e., inflation.
The basis of a free society, the concepts of individual liberty and freedom, as outlined by not just this country’s foundational principles and documents, but in fact the whole concept of man’s inherent rights is clearly understood to be optimized by one and only one social and economic system – capitalism. The hallmark of capitalism is the premise of personal (private) property and the inherent right to keep the fruits of ones labor (that in fact you own your own mind). The singular system which maximizes this historical and demonstrated truth is the division of labor enabled by a virtuous medium of exchange. Anything else, any movement away or apart from this enlightened view, I submit, becomes the root of all evil and a return to the primitive tribal mentality that characterized the dark ages. If you doubt this conclusion, please investigate its antithesis. I have; this conclusion stands the tests of logic and reason, as well as the demonstrated test over time.
In part II I will describe what our “money” has become and I will make it painfully obvious to all that what our money has become is evil incarnate, and that you and I are being duped and decieved into a state of affairs truly worthy of a revolution.