“Money now is the NOTHING you get for SOMETHING before you can get ANYTHING.”
- This book attempts to clear up the mystery of money in its social aspect. With the monetary system in the whole world in chaos, this mystery has never been so carefully fostered as it is today. And this is all the more curious in as much as there is not the slightest reason for this mystery. This book will show what money now is, what it does, and what it should do. From this will emerge the recognition of what has always been the role of money. The standpoint from which most books on money are written has been reversed. In this book the subject is not treated from the point of view of the bankers as those are called who create by far the greater proportion of money but from that of the PUBLIC, who at present have to give up valuable goods and services to the bankers in return for the money that they have so cleverly created and create. This, surely, is what the public really wants to know about money.
- In this book the mode of approach and the philosophy of money is expounded in the light of a group of new doctrines, to which the name ergosophy is collectively given, which regard economics, sociology, and history with the eye of the engineer rather than with that of the humanist.
- To this day we are in the grip of a mercantile system which fritters away in distribution most of the advantage gained in lightening the labour of producing wealth.
- Money now is the NOTHING you get for SOMETHING before you can get ANYTHING. As a matter of fact, this definition not only answers comprehensively what money now is but answers perfectly satisfactory all that money has always been, whether it has been coin or paper or any other form. From the point of view of the owner or possessor of it, money is the credit he has established in his favour with the community in which it passes current or is “legal tender”, by having given up in the past valuable goods and services for nothing, so as to obtain at his own convenience, in the future, equivalent value in turn for nothing. It is merely an ingenious device to secure payment in advance, and in a monetary civilization the owners of money are those who have paid in advance for definite market values if buyable goods and services, without as yet having received them.
- Money, of course, is an entirely peculiar form of credit-debt relation from which no one can escape. Its exchange value depends, in fact, simply on the amount of wealth people voluntarily prefer to go without rather than possess.
- The essential feature of money is that it is given in exchange of a wealth that currently does not exist, otherwise it would have been bartered. So, money is a legal claim to wealth over and above the wealth in existence. The owners of money possess claims to what they have given up, but what they have given up does not actually exist. Thus, the constant need to produce more and more goods. That is why money is virtual wealth.
- If we examine the history of progress, the direction it has taken appears so often a matter of intuition and conviction, rather than to depend on anything that at the time would have been accepted as convincing or logical proof. One, certainly, of these signs is how what appears nothing so much as a jig-saw puzzle of disconnected events and conundrums suddenly seems to fit together into a picture, to be lost again in a haze of uncertainty, but always returning, each time a little more orderly and definite.
- [N]ot one of the maladies afflicting the relations of men to-day are due to any real physical insufficiency, such as characterized the earlier epochs of history. They are due to the exact opposite,” over-production,”” glut,” competition for markets, and the like, which renders the continued existence of poverty and destitution a physical absurdity. Where Mr. Baldwin asked “What is the use of being able to make goods if you cannot sell them? ” the new economist would say at once ” Why don’t we sell them? What is money for? ” and so cut at once the Gordian knot of the whole tangle.
- In brief, we live in a scientific age, the purpose of which is frustrated by the survival of beliefs in money, as the practical mechanism of distribution, which are the exact opposite of those which have made that age possible. The symptoms and repercussions are of infinite obscurity and complexity, but the remedy is neither obscure nor complex. It is as devastatingly simple and effective as correcting an error of arithmetic.
Source: “The Role of Money: What It Should Be Contrasted With What It Has Become”, 1934