Money is the root of all evil, or so we are told. What exactly does money do that makes it so nefarious? Should we simply understand this as being a reference to wealth or to money in particular?
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\nMoney provides liquidity. It provides a way of easily storing, transporting, and conveying wealth. We know that one doesn\u2019t need a government in order to create a currency. All that is needed is what Adam Smith called mankind’s natural inclination to “truck and barter.” In markets, people tend to naturally gravitate toward holding their wealth in some form that is easy to move and is widely traded. Suppose that I have apples and Kaimi has oranages. I want oranges, but Kaimi does not want apples. In order to get Kaimi\u2019s oranges (provided I don\u2019t bop him on the head) I need to trade my apples for something that Kaimi wants. When lots and lots of people in the market face this sort of bargaining problem, they will tend to all trade toward some commodity that is fairly widely demanded and easily moved. (Also, you want to trade toward something where the supply of the item in the market as a whole is fairly stable.) This is why cigarettes frequently ended up serving as a form of money in POW camps during World War II. If you traded toward cigarettes, you could be reasonably confident that you could trade from cigarettes to something that you actually wanted later on.<\/p>\n
Liquidity is a dangerous thing. Wealth that can not be easily transformed or transferred tends to reinforce fairly static social orders. Land, for example, is the classic example of an illiquid form of wealth. Money is the ultimately liquid form of wealth. In a society where most of the wealth is in money, assets will flow quickly and easily to their most valued use. Markets will tend to respond quickly to changes in consumer preferences and it will be much easier for entrepreneurs to start new businesses and amass wealth (and with it social status and the like) in new and disruptive ways. In a society where most of the wealth is tied up in land and where there is not much in the way of money, markets will respond to changes in consumer preferences much more slowly, and entrepreneurs will have a difficult time starting disruptive new businesses. The 18th and 19th century South was a cash starved economy based on illiquid assets, mainly land and slaves. Early 20th century America was a cash rich economy that lived on the liquidity of trade and credit. Not surprisingly, the antebellum South was stable and socially rigid. The America of Theodore Roosevelt was being constantly convulsed by transformation, dislocation, and the crumbling of previous social hierarchies.<\/p>\n
Now in all likelihood, attacks on money are simply attacks on concentrations of wealth rather than on liquidity and social disruption. I can\u2019t help but thinking, however, that lurking behind some prophetic denouncements of wealth their lies an uneasiness with the change that liquidity hath wrought. I am not sure what to make of this. One answer (the one that Russell, for example, seems to have endorsed) is to embrace this implicit message and retreat into comfortable anti-commericialism a al Wendell Berry or Hugh Nibley. My problem is that I find dynamic, fluid, market driven societies very appealing. The scriptures, however, don\u2019t seem to share my enthusiasm.<\/p>\n","protected":false},"excerpt":{"rendered":"
Money is the root of all evil, or so we are told. What exactly does money do that makes it so nefarious? Should we simply understand this as being a reference to wealth or to money in particular?<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[34],"tags":[],"class_list":["post-1216","post","type-post","status-publish","format-standard","hentry","category-social-sciences-and-economics"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/posts\/1216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/comments?post=1216"}],"version-history":[{"count":1,"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/posts\/1216\/revisions"}],"predecessor-version":[{"id":5478,"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/posts\/1216\/revisions\/5478"}],"wp:attachment":[{"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/media?parent=1216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/categories?post=1216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timesandseasons.org\/index.php\/wp-json\/wp\/v2\/tags?post=1216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}