Money and Currency
From the title, you could probably tell what this article is about. Therefore, I am going to cut right to the chase. It is something everyone wants. Not only do people want lots of it but many people actually need it. Whom am I kidding? Everybody needs money in some form or another. What many people do not realize is that money is a necessity now just like food and water. One can do nothing without it in a normal society. You won´t have a roof over your head, no electricity to power the devices you need to buy first and most importantly you won´t have access to basic necessities like food and water, etc… Without financial support, one is just left out on the street, for the lack of better words, to die.
I am currently finically dependent on my parents which can be a good thing, but I just have to make sure that they do not cut me off (which is harder to do than I was led to believe). However, being financially dependent can be burdening. Not only because one can literally die without it, but also because one is dependent on another. Has anyone wondered what it is like to suddenly have no income and have to live off scraps? Before you try to close this tab, no this article is not about people in poverty and how hard it is to get out of poverty for those people. Even though both of them are problems that need to be addressed. However, I will be quickly addressing poverty in this article and how it got me thinking about money in the first place. It is images of poverty that makes us wonder, what does a world without money look like? Will people still live in inequality? Probably (e.g. racial inequality and gender inequality). Will life be different from the lives we have now? No one can say for sure, but at least we can speculate.
I am fully aware that professional economist actually already painted that picture for us, but I wanted to try to imagine what a world will look like without money without their help. This may lead to inaccurate speculations, but that is the whole point. Not saying that one should ignore the advice of educated professionals even though their speculations are at the end of the day still speculations. What I am trying to encourage is to start thinking about these kinds of stuff. That is what motivated me to start this blog in the first place. To share thoughts, ideas and anything really even though I can have wrong thoughts or ideas and make certain things incorrectly.
History of money
If we take a step back and ask why money is worth something since money that we currently use are at the end of the day just scraps of metal and pieces of paper. To find out why money is worth something, we have to take a step further back and ask where does the money come from. I have been told that in the past money did not exist or did not hold any value. You may now ask why we have money if we did not have money in the past. First things first, many centuries have passed since and things change. Secondly, they did have a currency but just not the kind of currency you might expect. Since there are some interesting videos out there explaining the history of money in-depth, I am just going to suggest that you check out those videos.
Value of money
Then you may ask what determines the value of the money you have. To put it in simple terms, supply and demand determines the value of money. If you print too much money, the money you currently have may decrease in value. However, if money is scarce then the money in your pocket is worth a lot. Again, there are tons of videos out there that explain the value of money in more detail, so I suggest you check it out.
Financial dependency
Before I start speculating, I want to first present why we are all financially dependent in one form or another. One can be financially independent, but my point is that we all need money. Most of us live in a society where money is used in the exchange for goods and services. Some people are living in a hunter and gatherer society where money is worthless. Nevertheless, most of us are not. To survive nowadays one needs an income, which means getting a job or building a business.
I also felt the obligation that I needed to argue why financial dependency can be good and bad. I am using the words financially dependent/independent not in the sense of having a passive income but in a sense of a child becoming financially independent as in a child getting a job. As already mentioned above, I am currently financially dependent on my parents. Financial dependency gives you the freedom to do whatever you want with your time and not having to care about a job. However, the downside of being financially dependent is that you don´t have money. Unlike a regular adult, a child is not allowed to work which can be very burdening. There is so much one wants to do as a child but can´t because this financial limit is hanging over one´s head. Someone could just cut you off. Now you may be thinking whelp I am not a child anymore so I don´t quite care. Hate to the bearer of bad news but as long as you are an employee, you can be cut off. (Therefore, a passive income is very important.) What many people need to realize is that this cannot only happen to children but regular employees as well.
What would a world without money look like
Now that I have covered the important aspects of money, I can go onto speculate about a society without money. There are two scenarios that I could imagine. The first scenario would be where the concept of money was never introduced in the first place. Honestly, it is quite obvious what will happen if the concept of money was never introduced. Exchange of items for goods and services has always been around so if the concept of money were never introduced then something else similar to our current currency system would have been introduced. In a small community, the money-less concept may work since everyone knows everyone and sharing is a common practice. However, on the world stage sharing and knowing everyone can be difficult. Therefore, I do not believe that the concept of money would not have been introduced since it is somewhat efficient and serves its purpose. However, money also did cause many problems and difficulties. I am not sure if the gender wage gap and poverty can be prevented if there would be no money since the wage gap and poverty have deeper-rooted problems that need to be addressed. Either way, if money as we know it was never introduced, I believe that some other form of money would have been introduced. Otherwise, trade between individuals and or groups may not be that efficient and fast.
The second scenario would be if institutions that control the money decided to remove all the existing currencies in the world, which is for the record unlikely. I believe that people would rather decide on one currency than decide to get rid of all kinds of money. I guess I accidentally stumbled upon the concept of communism. Full disclosure, I did not realize that I would be talking about communism when I first started this article. Either way, let´s suspend disbelief for a moment and assume that no money does not mean communism. The reason for getting rid of money must be really convincing to get the whole world to agree since it would cause quite an imbalance in population distribution if only a few countries agreed to abolish money. However, that won´t be the case anytime soon since the world is already divided enough.
This is an interesting thought experiment though. My first question was why would people decide to get rid of something that is supposed to make our lives easier. The dictionary definition of money is literally “a current medium of exchange […]” If there would be no money does it also mean that there would be no exchange for goods and services? Does that mean we have to do everything ourselves? Do we have to be a smith, cook, baker, doctor, etc… at the same time?
I know that this may sound a bit childish but we could live like the Smurfs. According to an article on the Smurfs Fandom page “[…], the Smurfs generally do not use money because everything they do and create is usually for the benefit of the whole community and that they freely share whatever they have with each other, putting their value more in friendships and family rather than personal possessions. That does not mean that the Smurfs will not engage in trade when it comes to dealing in exchanging goods and valuables with other races.” Many people may say that it is communism but the Smurfs fandom page also have a response saying that “[…] their choice of a communal system of sharing over a capitalist system of money makes the Smurfs be seen by certain readers and watchers of Smurf stories as promoters of communism, though their society is more family-based than nation-based.”
You may ask why I thought of the Smurfs of all things. Here is a little bit of backstory. When I was younger, I loved to read comics like Garfield, Snoopy, Mickey Mouse franchise, Smurfs and Asterix & Obelix. Now I am a bit sad that I missed the whole Marvel and DC comic franchises but that is a regret for another day. Either way, I just remember reading a Smurfs comic once where the main theme of the storyline revolved around the concept of money as an item for exchange. In other words, one of the Smurfs tried to introduce money into the Smurf society because he saw money in a nearby human village. The Smurfs fandom page wrote *spoiler alert* “[…] In the comic book story "The Finance Smurf", the title character is enamoured with the idea of money and introduces a capitalist monetary system into the Smurf community through the use of coins […] that Miner had dug up. [The concept of money was received with a bit of doubt at first but was accepted soon after.] Unfortunately, the monetary system proved to be a destructive force as the Smurfs found themselves no longer acting in the spirit of cooperation, [and the Smurfs quickly turned on the concept of money leaving the title character alone with all the money]. […] ultimately they rejected the whole system and went back to their communal ways, […].” Sidenote: It is just amazing what one can learn from reading comic books.
That trip down memory lane brought up some interesting topics that I want to talk about. What that trip down memory lane did not bring up is why human society should get rid of money. The Smurfs got rid of money since they were overwhelmed by greed and lost themselves on the road to wealth. For the Smurfs money was a momentary introduction that never lasted but the money did last for centuries in our society, which sadly means we won´t give up our wealth because we won´t put our community before our possessions. I also believe that the argument of communism is also a reason that we won´t remove money from our lives. However, the reason is irrelevant since I wanted to discuss the ramification of the removal of all forms of money.
Whether we diminish money for social inequality or to makes life easier, one thing is obvious. It is going to be a huge change. We lived with money for centuries, it would be quite an adjustment to live without it. There would need to be new laws and agreements to adjust to the changes. The question is now, how are we going to live? Are we going to share everything like the Smurfs? Or will we have to break society into smaller isolated groups to make trade amongst the members easier? Truth is that no one can say for sure. As mentioned above all we can do is speculate.
I have to admit it would be nice to see a human community that works like the Smurfs community where everyone shares everything. However, after seeing how separated and greedy human society is, I should not get my hopes up. Either way, it is nice to speculate about something, it´s fun. As mentioned above people have speculated what could happen if we get rid of money. I found a very informative video that I would suggest. The video lays out how the change will change people and our behaviour.
To answer my question that started this whole journey, I will say that money does get rid of poverty if our money-less path led to a communal system. If we get rid of money to only replace it with some other kind of money then some people will still be in poverty and we are back at square one. In this interconnected world where everything is more complicated than a simple Smurf society and money is here to stay, I can only say that poverty will still exist but it is at least not as severe as it used to be. It would be nice if there is a way we can diminish poverty but unless we all put our heads together and find a solution, I sincerely doubt that we can diminish poverty anytime soon. Spoiler alert, throwing money at that problem does not help. I know that it would be easier to teach people to fish rather than fish for them but one also needs to consider the environmental, economic, social, etc… factors. There are so many things behind a thing we use every day, maybe we should start thinking about the things related to money.