Money is Not What You Think It Is

A financial revolution is underway. It is going to change your life. Understand it. Embrace it. Change the world. That is the theme of my work here. At the core of the financial revolution is the reality that the very nature of money itself is changing, mainly due to advances in technology.

The very nature of money is changing.

What does that mean? Well, first of all we had better be clear on what money is. A popular definition of money is that it is a medium of exchange, a unit of account, and a store of value. That’s not accurate. Those are functions of money, but they do not define money what money is. Therefore, the definition of money must be broken down and clarified.

First, there is the item that is used as money. Throughout history, there have been many items used, from gold and silver, to tobacco, to cowry shells, and now electronic digits.  If so many items can be used as money, then there must be a secondary definition that transcends the item used. There is.

In Bernard Liatier’s book “New Money for A New World” we find what I believe is the most accurate definition of money:

“Money may be defined as an agreement, within a community, to use some standardized item as a medium of exchange. As an agreement, money inhabits the same space as other social constructs, like marriage or lease agreements. These constructs are real, even if they exist only in people's minds.

So there it is. Money is social construct that is a product of a creative mind. As such:

  1. The community chooses the item to perform the functions of money (gold, silver, dollars, shells, digits).
  2. The community designs the system within which the money is used (who creates it, the way it is exchanged).
  3. #1 and #2 being true, the system designed by the community will reflect the values of the community.

Most of us have been taught that money is value neutral. It is how we use and steward our money that determines its impact on the culture. That is only partially true. Social constructs are not value neutral. They promote a value system. Therefore, because money is a social construct it is not value neutral. This has profound implications and raises some important questions:

  • What are the values the community decides to promote via its money?
  • What worldview is the basis for those values?
  • Who has jurisdiction over defining the operative worldview?

Let’s examine our present monetary system in light of these questions.

  • The item that performs the functions of money is a debt instrument (debt therefore is a value the community promotes).
  • The worldview that has given birth to this system is secular/humanist (a Judeo/Christian worldview would not create such money).
  • The central government has jurisdiction over defining the system.

Throughout history, the jurisdiction that controls the money and monetary system becomes the primary beneficiary of that system because it structures it to support its values and priorities. Today, central governments are the primary jurisdiction that defines money and the monetary systems throughout the world:

  • They are increasingly secular in nature.
  • They are increasingly promoting a secular worldview.
  • They are increasingly in need of funds to support their secular programs.
  • They are using their debt based monetary system to support these activities.

Is this the way it should be? Is this the way it has to be?

No and no.

Because money is a social construct, it can be changed. And it is changing. The social construct defining our future money will be created by minds that hold a worldview. Will it be a Kingdom worldview or secular? That depends on you and me.

And that will be the subject of the next post.