What Is Money And How Can We Better Understand It?

Money

One of the most enjoyable books I read last year was Money by David Mc Williams. In his introduction to the book he describes money as a “wondrous technology” that “resides in our heads, representing value”, which “humans invented to help us negotiate an increasingly complex and interrelated world.” Money is a constantly evolving idea which affects all of us every day and yet we don’t really talk that much about it as a concept. So to explore this topic here are a couple of campaigners who have very forthright ideas on what money is and why we need to understand it.

Firstly Gary Stephenson: https://youtu.be/_gcNMu40jqs

Stephenson campaigns for a wealth tax on people like himself, proposing a 2% tax on wealth over £10 million. Wealth inequality has increased significantly more rapidly than income inequality in the past few decades. The top 10% of households hold around 50% of the wealth, in the UK while the bottom 50% own just 9%. Income inequality has remained fairly stable since the 1990s, with the top 10% of earners receiving 30-35% of total income. However, the top 10 per cent aren’t the real target for Stephenson. The top 1% have done a lot better than the top 10% and have seen their wealth increase by around a trillion pounds since 2010, largely by doing nothing but watching their assets increase in value. They are generally not entrepreneurs, but passive investors who own a lot of shares, property and land. These assets increased in value after the financial crash and Covid, essentially because central banks kept interest rates historically low for a long time.

Secondly Richard Murphy https://youtu.be/ZL8SMeV2VyY

Murphy's key ideas centre on Modern Monetary Theory (MMT), advocating that sovereign governments can create money, so spending isn't limited by tax revenue but by real resources; He stresses focusing on needs (health, education, and housing as public goods) over financial balances

Questions

1. What is our own understanding of what money is and where does this understanding come from?
2. How has money influenced our progress as a species?
3. If money is essentially debt what does this mean for our understanding of wealth and poverty?
4. How do we decide what has value in an economy - is it purely market-driven or should there be other considerations?
5. For Stephenson the creation of government debt during Covid is a key to understanding the cost of living crisis. Does he have a point and if so what might be done?
6. Is extreme wealth concentration an inevitable feature of our monetary system, or a correctable flaw?
7. How does money function as a mechanism of power rather than just a medium of exchange?
8. If governments can create money during emergencies, what does this say about austerity during “normal” times?
9. Has money become the purpose rather than the tool of economic policy?
10. Why do we have an increasing level of inequality and what are the consequences across generations?
11. Murphy argues that economics has been constructed to serve power. What are the strengths and weaknesses in his argument?
12. Is our current monetary system reformable or does it need fundamental reimagining?
13. What would a more just monetary system look like? Is such a thing even possible?
14. How might cryptocurrencies or digital currencies change the philosophical questions around money ?
15. Is money the root of all evil?