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I'm not sure if this question fits on this site, but I had this question the other day.

Why have we used money when it creates so much inequality in our lives? Money is nothing more than a concept but it literally changes the way we live. It is the only factor that separates someone from living luxuriously and someone living with struggle. Why did previous generations create this unjust system?

Example: Let's say a country is poor. The only way it can use energy is cheap sources, such as oil, instead of green energy. Even though the continued use of oil could wipe out humanity, money prevents the country from adopting green energy.

If animals can live successfully without money, then can't we?

Again, sorry if this is a trivial question or if it doesn't fit on this site, but I thought of this the other day and would like to know.

Sirswagger21
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  • Welcome to philosophy SE. This is more of an economics and/or history question. Both domains have dedicated SE communities where you can find quality answers. According to David Graeber money was invented to facilitate trade between people who couldn't trust each other enough to barter or keep track of who owes what to who. Traveling merchants, not being members of the communities they visited, needed a way to settle all accounts immediately. It is just that, a tool to facilitate exchange and accounting, and arguably since advanced civilizations require exchanges, we couldn't do without it. – armand Jan 06 '21 at 00:33
  • I doubt people would want to live like animals, hand to mouth with no security and constant danger of disease and starvation. Since people can not produce all the items they want themselves they need to exchange goods. The alternative to money is direct exchange, barter, which is rather inflexible. Money is simply a tool for facilitating the exchange. Like any tool, it is neither just nor unjust, only the way it is used can be that. Green energy is not unaffordable because of money, producing it just requires more resources. You might as well blame kitchen knives for stabbing people. – Conifold Jan 06 '21 at 00:36
  • @armand Thanks for the response. You're right that it does keep things orderly. But when looked at from society as a whole, our dependence on money has ramifications – Sirswagger21 Jan 06 '21 at 00:43
  • @armand: Graeber dismisses barter as being of any serious importance, and builds from reciprocal social obligations perceived as debts. – CriglCragl Jan 06 '21 at 00:50
  • @Conifold: The archeology & history of money does not bear out that picture, as Graeber observed. Coinage began for paying taxes, to cover the costs of armies. Building new on-shore wind power is already cheaper than running already built fossil stations. Solar cheaper still. Off-shore wind rapidly catching up. Baseload & storage are different issues, but steel making & cement require on-demand heat, at 10% of CO2 the only real option is hydrogen, requiring that at huge scale come-what-may. – CriglCragl Jan 06 '21 at 00:58
  • @CriglCragl: that's what I meant by "who owes what to who". "Give me a calf now, I will provide you eggs for the year" or other forms of intra community exchange of goods is a debt based system but it is barter nonetheless, just with a delay included. Of course for this to work you need to trust the egg provider is going to stay around. – armand Jan 06 '21 at 01:09
  • @armand: No. In his analysis of Native Americans he makes it clear they are not the important debts. Consider how military service has been linked to citizenship, eg being a 'brave'. It is social not economic bonds that matter. If people can't trust & rely on each other, their money is irrelevant. Witness what happens with a run on a bank. Violating 'your word is your bond' is a kind of loss of a crucial currency – CriglCragl Jan 06 '21 at 01:18
  • @CriglCragl: When you lend your car to a pal with the understanding that he will let you crash on his couch anytime, a personal trust bond is necessary that is clearly stronger than when you pick a bottle on a shelf in exchange for a few coins given to an employee. Of course trust is important in money, but trust in a system, not in people. The employee trusts the central bank, not you, so it does not matter that they never met you and never will anymore. Money shifts the trust relationship and allows for more fluid trade. Now, I admit it might not be Graeber's point, it's been a few years. – armand Jan 06 '21 at 02:11
  • @FruDe: only my opinion, but I think the problems you are referring to are deeper than just the issue of money. Would poor countries have better access to green energy if they bartered for it ? If we were to set up a worldwide sharing of resources, like native Americans did inside the tribe, how could we make sure nobody is taking advantage on such a wide, impersonal scale ? Aren't the ramifications you refer to more linked to political issues like capitalism, imperialism, and other stuff that can't be addressed in a small comment ? – armand Jan 06 '21 at 02:41
  • Money, actually, has a real value, if it is created properly -- by the local branch as borrower's personal IOUs. That way all money in circulation would be private IOUs -- either by an individual or by a corporation. No, you cannot write your own, because you can write a billion gazillions -- that's why it must be a local bank if it approves the loan.

    Your bank creates your money out of thin air. The bank also promptly and properly destroys it once you pay back your loan.

    And that's how it works, tho no one has figured it out

     – Yuri Zavorotny Jan 06 '21 at 12:33
  • @armand: Read him again. Barter is bullshit. It's never counted for more than very fringe economic activity. Economic blocks and accumulated resources represented as capital, depend crucially on building trust and capacity to cooperate, that IS what wealth is, not lumps of stuff. – CriglCragl Jan 10 '21 at 01:23
  • @YuriAlexandrovich: Money existed millennia before banks. If you think no one has figured it out you certainly haven't read David Graeber who covers exactly this. – CriglCragl Jan 10 '21 at 01:26
  • @CriglCragl ok, barter is not important, whatever it is you call this way. People exchanging stuff without the intermediation of money is and Graeber says so when he speaks abut the culture of gift/counter gift, for exemple. Debt first existed as "i owe you one cow, you owe me two chickens", and i call that "barter" because people exchange things, not money. As for the rest i dont understand what you mean or how it relates to our conversation so far. Have a nice day. – armand Jan 10 '21 at 01:36
  • Here is an article on The Myth Of The Barter Economy, quoting Graeber https://www.theatlantic.com/business/archive/2016/02/barter-society-myth/471051/ Here is an article titled How David Graeber Changed The Way We See Money detailing his shift in thinking around barter https://newrepublic.com/article/159227/david-graeber-changed-way-see-money It's literally his most famous contribution on economic thought. Your response seems to be to have your own quirky definition of barter. – CriglCragl Jan 11 '21 at 09:59
  • @CriglCragl -- I was talking specifically about fiat. On a side note, let me know if you are interested in learning how to understand.If you are a human, I can help. – Yuri Zavorotny Jan 18 '21 at 21:35

2 Answers2

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In his Debt: The First 5000 Years, anthropologist David Graeber argues currency emerged out of keeping track of reciprocal obligations. The book is available free of charge in the link footnotes, he makes a strong case.

In our current system, banks issue new currency by selling debt obligations, the true basis of our system. Joint stock companies & limiting liability by incorporation, ended the feudal system, liberating more than perhaps any previous change.

Look at The Needham Question: why were what Francis Bacon called the cornerstones of the modern age (that saw him help start the scientific revolution), gunpowder, magnetic compasses, & canals, all invented in China, but the modern age didn't start there? We would probably add paper & printing, also invented in China. The consensus is, war - the geography of Europe made it hard to unify & keep that way. And war gives new technology an edge.

Money is a technology. Look at the end of the usury prohibition in Christendom. It happened because ignoring it got the funds that won wars.

This 8s an anthropology question, not a philosophical one. As is, can we live without money. People have, with major limits on their lives by & large, that limit the appeal.

CriglCragl
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Money, actually, has a real value, if it is created properly -- by the local branch as borrower's personal IOUs. That way all money in circulation would be private IOUs -- either by an individual or by a corporation. No, you cannot write your own, because you can write a billion gazillions -- that's why it must be a local bank if it approves the loan.

Your bank creates your money out of thin air. The bank also promptly and properly destroys it once you pay back your loan.

And that's how it works, tho no one has figured it out

Yuri Zavorotny
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