Many claim that the money that our Federal Reserve issues has no value, is fake, and that the entire system is a huge con. They also claim that it no longer has gold backing. However, I contend that money is real because it symbolizes a notion—future work—which gives it value when it is borrowed into existence. Future work has value for the people who will perform it or for the business that will use it to produce goods.
That said, it doesn’t mean that it isn’t misused by governments, incestuous families, and unscrupulous individuals who try to hoard and control it. It doesn’t mean that the greedy, who obstruct the system and siphon off its flow without doing any work or adding value, are not a problem for the system, just as lawyers or the government obstruct business transactions through excessive fees, taxes, regulations, and laws. The overall performance of the system is negatively impacted by any corruption or inefficiencies, but the idea behind the money we use is real and stands in for something very significant. And the financial system is sound as long as we hold to that belief and have confidence in the worth of the things we create or the work we do.
There is a fantastic Hollywood film worth watching called In Time (2011) if you’d like to see the philosophical underbelly of greed and corruption in such a system. The IMDb website has the movie trailer you can check out, the synopsis there states:
“Having the money to escape a bad situation is a chance at eternal youth in a future where people stop aging at 25 but are only designed to live for one more year. A connection that becomes a crucial step in the fight against the system occurs when Will Salas finds himself in this situation accused of murder and fleeing with a hostage.”
It’s actually a real mind-twister that gets to the point of money having intrinsic value or being paid for labor, as I’m sure you’d agree. It’s a science fiction film that gets under your skin.
The majority of money in use today is digital, made up of ones and zeros, and is created by pressing a keyboard. Unfortunately, this means that it is just as easily susceptible to theft as it was when it was first created. Are you beginning to worry yet? I must admit that I am a little concerned about the future of quantum computing because it is undeniable that it will put our digital currency and banking system in danger of a catastrophic collapse. As you mentioned, trust is also important because if people don’t have that, civilization as we know it will collapse in 3-5 days, at most a few weeks.
The risk of getting rid of money just yet is not worth the loss of the current system in order to create a new one. This would be too much change too quickly for human civilizations to survive. Maybe in 50 to 100 years, and definitely not until a tried-and-true system is in place to replace it. I think it would be difficult to persuade anyone in a leadership position that now is the time to get rid of money.
We must first come up with a better method, test it in a small area, and then gradually scale it up; unless you start small and demonstrate that the model operates independently of outside influences, the risk isn’t worth it. Of course, after proving a concept, you continue. Does this imply that Bitcoin and the blockchain are our future? After reading this one, you’ve already got plenty to ponder, so I’ll save that for another article.