Why do we need money?

[FlyingTeaPot]

It is a simple question. Why do we need money? What is the inherent value of money? If a bag cost 1 dollar in 1950, and the same bag costs 400 dollars today, what has the extra 399 dollars contributed to adding value to that bag? Isn't perpetual inflation a reality of the economic system we follow? Aren't the banks continually devaluing money to print even more money? When is the interest from all the principal amount owed to banks ever going to be zero? It is impossible. Banks simply have to keep printing more money to cover the interest from the principal of the previous year and so on. The value of the dollar will forever decrease until it becomes meaningless. Suppose all the value of the money in the world were centralized to one single bank, and this bank loaned out money to people at 10% interest, then how on earth are we going to repay the 10% given that earth's resources are finite? Isn't this an inherently illogical model?
Thoughts?

Disclaimer:
I have never understood what money contributes to value of items. I recently watched the three Zeitgeist movies and they concretized my ideas in a succinct manner. I don't agree with the movies on everything, but as far as the economics of it are concerned, I see very little to disagree upon.

 

[elmarna]

money is a system put in place that left people obtain things with a form of understanding that while you had done work-you skill or labor may not nessessarily let you obtain something you NEEDED. So if you are a tile maker & you need food. It did not matter that someone with food had to barter with your service. You just obtained your food. I am no ecomimist. But I have lived long enough to say in the early 70's Gas was 42 cents a gallon and cigarettes were 45 cents a pack [give or take a couple of cents]
With saying that I can say the number amout for what you have to pay has changed but in proprtion to everything gas & cigarettes are still in the same area.
Why or who decided on the value & price is not known.
There are people who still barter & never need to put a price money wise on there work.
Do we NEED money--YES. Money is there for our needs.
It is not used in the ways we may like,but the system does have it's advantages

 

[FlyingTeaPot]

Your answer makes sense in the current economy. But why work for money at all? This is precisely my point. It was put in place for ancient people to obtain goods and services in exchange for other goods and services. But with automation, people dont have to work at all. Machines can produce goods and services for us.
In a resource based economy, 95% of today's work will be obsolete, including things like building construction etc. There is no need for humans to engage in these repetitive roles we call work.

 

[FlyingTeaPot]

money is a system put in place that left people obtain things with a form of understanding that while you had done work-you skill or labor may not nessessarily let you obtain something you NEEDED. So if you are a tile maker & you need food. It did not matter that someone with food had to barter with your service. You just obtained your food. I am no ecomimist. But I have lived long enough to say in the early 70's Gas was 42 cents a gallon and cigarettes were 45 cents a pack [give or take a couple of cents]
With saying that I can say the number amout for what you have to pay has changed but in proprtion to everything gas & cigarettes are still in the same area.
Why or who decided on the value & price is not known.
There are people who still barter & never need to put a price money wise on there work.
Do we NEED money--YES. Money is there for our needs.
It is not used in the ways we may like,but the system does have it's advantages

If you have the time, please watch the movie Zeitgeist: Addendum and Zeitgeist: Moving Forward and you will understand what I mean. They are available on youtube:

[youtube]1gKX9TWRyfs[/youtube]



and

[youtube]4Z9WVZddH9w[/youtube]
YouTube - ‪ZEITGEIST: MOVING FORWARD | OFFICIAL RELEASE | 2011‬‏

 

[Chisti]

Your answer makes sense in the current economy. But why work for money at all? This is precisely my point. It was put in place for ancient people to obtain goods and services in exchange for other goods and services. But with automation, people dont have to work at all. Machines can produce goods and services for us.
In a resource based economy, 95% of today's work will be obsolete, including things like building construction etc. There is no need for humans to engage in these repetitive roles we call work.

You're right, but read Marx to see why it is so. All production is about extracting as much surplus value as the capitalist can. Money fits into this scheme very well.

 

[Koldo]

Your answer makes sense in the current economy. But why work for money at all? This is precisely my point. It was put in place for ancient people to obtain goods and services in exchange for other goods and services. But with automation, people dont have to work at all. Machines can produce goods and services for us.
In a resource based economy, 95% of today's work will be obsolete, including things like building construction etc. There is no need for humans to engage in these repetitive roles we call work.

I got lost in the bolded part...
Are you talking about the future?

 

[FlyingTeaPot]

I got lost in the bolded part...
Are you talking about the future?

Yes, although I'd say 90% of the workforce can be replaced RIGHT NOW with machines.

 

[FlyingTeaPot]

You're right, but read Marx to see why it is so. All production is about extracting as much surplus value as the capitalist can. Money fits into this scheme very well.

You are right. I am advocating a collectively owned resource based economy in which there is no concept of money. Also, I will go ahead and read Marx on the subject. I have been meaning to do that anyway

 

[Koldo]

Yes, although I'd say 90% of the workforce can be replaced RIGHT NOW with machines.

90% of a specific state? of the usa? or of the whole world?

 

[elmarna]

while money may change as we know it-as in universal credits. At best even if it collapses we as people all run on a value system. Working for the post office &n seeing most of the work force replaced by mechines I understand your point of veiw. Populations with no birth control producing children that they can not feed & watching them starve has nothing to do with economics that is a social problem. What the value system will become I can not imagine. lets hope we figure out a way to improve on things!!!

 

[FlyingTeaPot]

90% of a specific state? of the usa? or of the whole world?

Its only a rough number, don't ask me to quote sources or anything. But I am talking about the world's workforce.

 

[FlyingTeaPot]

while money may change as we know it-as in universal credits.

What do you mean by universal credits? credits to whom?

At best even if it collapses we as people all run on a value system.

Value system? What do you mean when you say value system? Do you mean morality or value of money?

Populations with no birth control producing children that they can not feed & watching them starve has nothing to do with economics that is a social problem.

No, it has a lot to do with economics.
2011 World Hunger and Poverty Facts and Statistics by World Hunger Education Service

What the value system will become I can not imagine. lets hope we figure out a way to improve on things!!!

Yes, I think Jacque Fresco's approach is really on that path. If only more people knew about it. The Venus Project

 

[LuisDantas]

What I find more noteworthy about money are the sociological and psychological effects of having such a blanket merchandise available and valued above all. Being the intermediate step that symbolizes the right of acquisition of goods and services while at the same time distancing one from them, it has some rather weird effects.

People have come to expect to have more money simply because time passes, as if wealth were some sort of god-given inherent right. It is a curious and somewhat alienating effect.

Perhaps even more shocking is to notice that it has become the norm to have the acquisition money as a goal in and of itself. To a degree that is also alienating, and a factor in the lack of true purpose in some people.

Also, despite my general lack of interest in Marx's ideas, I must recognize that the money culture has had a thinly disguised effect of defining people's rights and quality of life while at the same time pretending that it has not done so.

 

[9-10ths_Penguin]

Your answer makes sense in the current economy. But why work for money at all? This is precisely my point. It was put in place for ancient people to obtain goods and services in exchange for other goods and services. But with automation, people dont have to work at all. Machines can produce goods and services for us.
In a resource based economy, 95% of today's work will be obsolete, including things like building construction etc. There is no need for humans to engage in these repetitive roles we call work.

If you had some of these hypothetical magic robots to do all sorts of work for you, what motivation would you have to share what they produce with the "obsolete" 95% of the population?

BTW - I think you're wrong about the basis of our economy. In the end, it's largely based on knowledge. If those 100 people no longer have to dig for coal with hand tools, this means they're free to be trained as geologists, surveyors, engineers and robot technicians to go find and extract even more coal. The value of the person to the company changes from how much a person can lift or carry to what they know.

There's no life of leisure in store for us, just different jobs.

 

[9-10ths_Penguin]

It is a simple question. Why do we need money? What is the inherent value of money? If a bag cost 1 dollar in 1950, and the same bag costs 400 dollars today, what has the extra 399 dollars contributed to adding value to that bag? Isn't perpetual inflation a reality of the economic system we follow? Aren't the banks continually devaluing money to print even more money? When is the interest from all the principal amount owed to banks ever going to be zero? It is impossible. Banks simply have to keep printing more money to cover the interest from the principal of the previous year and so on.

I think you're operating under some false assumptions.

Banks have lots of money in, well, the bank. If they devalue currency by "printing more money", then they devalue their own wealth as well.

The system you describe is predicated on banks both being motivated by wealth and also undermining their own wealth. This seems contradictory to me.

The value of the dollar will forever decrease until it becomes meaningless. Suppose all the value of the money in the world were centralized to one single bank, and this bank loaned out money to people at 10% interest, then how on earth are we going to repay the 10% given that earth's resources are finite? Isn't this an inherently illogical model?

One thing to consider: there's more value in the world than the value of the Earth's raw resources.

Plenty of things we produce are value-added: an ingot of steel is worth more than the coal and iron that went into it. When that ingot is rolled into sheet steel, it's worth even more again. And even more when that sheet steel is stamped into car parts, and more when those parts are assembled into a new car.

Our resources might be limited, but the economic value we can create only depends on our creativity about what we can do with those resources.

I have never understood what money contributes to value of items. I recently watched the three Zeitgeist movies and they concretized my ideas in a succinct manner. I don't agree with the movies on everything, but as far as the economics of it are concerned, I see very little to disagree upon.

Money doesn't contribute to value; it is an expression of value.

... although the convenience of not having to hold an inventory of barter items probably does have some value itself.

 

[Panda]

Its only a rough number, don't ask me to quote sources or anything. But I am talking about the world's workforce.

And you would then need to re-employ them to service the machines.

 

[angellous_evangellous]

It is a simple question. Why do we need money?

Simple answer: to buy stuff.

 

[Dr. Nosophoros]

I prefer to use cash from my knot

 

[FlyingTeaPot]

If you had some of these hypothetical magic robots to do all sorts of work for you,

Contour Crafting - Global Prospects Behrokh "Berok" Khoshnevis

what motivation would you have to share what they produce with the "obsolete" 95% of the population?

This is precisely the point. The machines are not for profit. They are owned by everyone, not just a corporation for profit.

BTW - I think you're wrong about the basis of our economy. In the end, it's largely based on knowledge. If those 100 people no longer have to dig for coal with hand tools, this means they're free to be trained as geologists, surveyors, engineers and robot technicians to go find and extract even more coal. The value of the person to the company changes from how much a person can lift or carry to what they know.

There's no life of leisure in store for us, just different jobs.

I recommend you watch Zeitgeist : Addendum and Zeitgeist: Moving Forward,
found here:
[youtube]EewGMBOB4Gg[/youtube]
YouTube - ‪Zeitgeist Addendum‬‏


and here:


[youtube]4Z9WVZddH9w[/youtube]
YouTube - ‪ZEITGEIST: MOVING FORWARD | OFFICIAL RELEASE | 2011‬‏

to know what I mean. I don't know much about these things, but the two movies have certainly raised an interesting question about money and sustainability, at least in my opinion.

 

[Jacksnyte]

It is a simple question. Why do we need money? What is the inherent value of money? If a bag cost 1 dollar in 1950, and the same bag costs 400 dollars today, what has the extra 399 dollars contributed to adding value to that bag? Isn't perpetual inflation a reality of the economic system we follow? Aren't the banks continually devaluing money to print even more money? When is the interest from all the principal amount owed to banks ever going to be zero? It is impossible. Banks simply have to keep printing more money to cover the interest from the principal of the previous year and so on. The value of the dollar will forever decrease until it becomes meaningless. Suppose all the value of the money in the world were centralized to one single bank, and this bank loaned out money to people at 10% interest, then how on earth are we going to repay the 10% given that earth's resources are finite? Isn't this an inherently illogical model?
Thoughts?

Disclaimer:
I have never understood what money contributes to value of items. I recently watched the three Zeitgeist movies and they concretized my ideas in a succinct manner. I don't agree with the movies on everything, but as far as the economics of it are concerned, I see very little to disagree upon.

Beware Zeitgeist: Those movies are full of bad research leading to incorrect information.