What is money really? Have we lost it?

(The following are excerpts from Atlas Shrugged, © Copyright, 1957, by Ayn Rand. )

“…Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value…

When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others… Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow.

Those pieces of paper, which should have been gold, are a token of honor–your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money…

…Wealth is the product of man’s capacity to think…Money is made – before it can be looted or mooched – made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.

To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return.

Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss…that the common bond among men is not the exchange of suffering, but the exchange of goods.

Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they offer, but the best that your money can find. And when men live by trade – with reason, not force, as their final arbiter – it is the best product that wins, the best performance, the man of best judgment and highest ability – and the degree of a man’s productiveness is the degree of his reward. This is the code of existence whose tool and symbol is money…

But money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires…

Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values, if he’s evaded the knowledge of what to value, and it will not provide him with a purpose, if he’s evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent…

Money is your means of survival. The verdict you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men’s vices or men’s stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment’s or a penny’s worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you’ll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity?…

Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and it will not redeem your vices. Money will not give you the unearned, neither in matter nor in spirit…

…Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed…

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’

When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, ‘Who is destroying the world? You are.

You stand in the midst of the greatest achievements of the greatest productive civilization, and you wonder why it’s crumbling around you, while you’re damning its life-blood – money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men’s history, money was always seized by looters of one brand or another, whose names changed, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor…

So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer, yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers – as industrialists.” – Ayn Rand

These are very powerful words – though they were written in support of industrialism and capitalism, which stand at odds, to some degree, with the Core Economy philosophy – but these words are something that should be read and re-read many times by everyone.

We really must come to an understanding of what money is and what value is. As Ayn Rand referenced, if not outright stated; money is a representation of a person’s labor, whether direct through hands-on work or indirect through education and skill development.

When we use money to “purchase” the goods and services that we need in our daily lives to survive, what we are really doing is recognizing the labors and efforts of the person providing us with those things.

The problem is that “money” has become something more conceptual than actual. It has become a thing in itself rather than the measure of labor and effort that it should be. And once money took on a life of its own, it has stopped serving the average person as a means of meeting one’s needs and started serving the schemers who turned it into a perversion of what it should have been all along – an indirect barter instrument that allows laborers and producers of goods and services a convenient way to trade those goods and services.

The schemers have coopted the representation of the producer’s labor and turned it into a means of controlling production and those that do the producing. They have taken a good thing and made it bad. I think that this is what Ayn Rand was saying. I think that she certainly had interesting insight into what the peoples of the world were, and are, up against.

Maybe we can’t live without money but we can make changes in our individual lives to move towards a more core economy centered approach to living and, in doing so, return “money” to the people that produce – where it belongs.