The Meaning of Money

What gives money (or any "moneylike" form of currency) its value? What makes us willing to accept it in exchange for concrete items of value? Cory Doctorow dissects this conundrum in his latest LOCUS column:

Moneylike

After an attempt to define money, he explores its origin. He rejects the familiar hypothesis of its having been invented to solve the cumbersome difficulties of barter, labeling this a "folk-tale." Instead of a "bottom-up" model of the creation of media of exchange, he describes money as a "top-down" system imposed by governments, which required the existence of currency to collect taxes in order to provision their armies. Where, then, does the money itself come from? It's generated by governments, and problems can occur if the state issues either too much or too little of it. Doctorow illustrates and analyzes this model at length in an extended parable. Items other than official currency can be "moneylike," such as gift certificates. Elaborating on the concept of "moneylike" media of exchange, he goes into detail about how cryptocurrency works, especially with reference to internet ransomware.

Robert Heinlein includes a discussion of what constitutes value in STARSHIP TROOPERS, where the narrator's high-school teacher refutes the claim that labor alone creates value. Heinlein's TIME ENOUGH FOR LOVE contains an amusing scene in which Lazarus Long, acting as the banker for a frontier planet colony, destroys a batch of paper money, to the horror of the man he's dealing with. Lazarus has to explain that money doesn't consist of a physical thing with objective value, but a consensus reality people agree on. As long as Lazarus keeps a record of the serial numbers from the bills he gets rid of, there's no need to preserve the bills themselves (which pose a theft risk).

In one of Terry Pratchett's Discworld novels, the capital city adopts the Golem Standard. What could serve as a better backing for currency than objects that are almost impossible to steal, counterfeit, or destroy (especially since they're sapient and can defend themselves)?

In the Star Trek universe, conflicting information about the future economy appears in the various series. In the original series, Starfleet personnel must get paid somehow, as shown by Uhura's purchase of a tribble in "The Trouble with Tribbles." Outside of Starfleet, the existence of money is confirmed in "Mudd's Women" and the episode in which Spock poses as a Vulcan merchant. Supposedly by the time of STAR TREK: THE NEXT GENERATION the ubiquity of replicators has made the Federation a post-scarcity society with no need for money. Yet on the fringes (as in DEEP SPACE NINE) and outside the Federation's borders, as made clear by the Ferengi veneration of profit, money exists. Gold-pressed latinum as a medium of exchange is explained on the premise that it's one of the few substances incapable of being replicated. (We have to assume dilithium crystals must fall into the same category, or else obtaining them wouldn't be such a vital preoccupation in the original series.) It seems reasonable that luxury goods in the form of items not produced by replicators, such as the Picard family's wines, would require a medium of exchange for their sale. Or are we to assume creators of such products make them for the sheer joy of the process and give them away? Regardless of post-scarcity abundance, widespread actions like that would imply a radical change in human nature that we don't witness among the Terrans of the Star Trek universe in any other behavioral category.

Margaret L. Carter

Carter's Crypt