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money
March 2009 
The nature of money
Posted on Jan 24th, 2009
by 
Itlandm
Itlandm
Actually, money is a unit of measurement, much like inches or gallons. But instead of measuring length or volume or weight, it measures value. Long ago it did so by comparing the value of things to the value of gold or other rare metals, but it has grown steadily more abstract. Today it is mostly just numbers. How much is something worth to one person or another? In practice, money gives the answer to that.
This explains why the current financial crisis cannot be solved easily. Some of the value we took for granted was revealed to be an illusion. Just printing more money will not give us back that illusion. And if it did, it would still not be a good thing. What we need to do is to re-appraise. There are people who have traded real values for those fantasy values. How do we help them? How do they help themselves? Those are worthwhile questions. "How do we get the illusion back" is the bad question, which no one would ask out loud, but which is still taken for granted by most.
There will be more such disillusionments. And almost certainly some good surprises too, where things turn out to be more valuable than we imagined.
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