Argument: why money can’t be a commodity

The notion that money is an object of intrinsic value is a scientific and mathematic absurdity. Money is a logical entity not a physical one, it is nothing more than a record of value and therefore is not in and of itself a precursor to the creation of wealth nor is it subject to being scarce.

Marc Gauvin of BIBO proposes an argumentation on why money can’t be a commodity. We excerpt the beginning and the summary and conclusions:

Simple Circular Architecture of the False Science of money:

Step 1. Create a belief system whereby people accept that the value of goods and services, can be “carried” in units of an arbitrary object or even symbol, by emphasising the buyer “giving up” units of cash (or subtracting positive entries on account) while the seller receives the units as if these were a prize. The intention is to make money seem like the reward by downplaying the fact that in the past, ALL buyers must relinquish wealth in order to obtain units in the first place. A reward is something given above and beyond what was received. Money at best is a promise to redeem what was already forsaken.

Step 2. Establish a money market. As people become conditioned to accept the fallacy of money “being” of intrinsic value, then they will accept the notion of borrowing, renting, buying selling of it, as well as the notion of the need for money to “circulate” independently of any commensurate circulation of wealth. That is people will establish money markets.

Step 3. Rationalise the practice of paying interest as it creates a perpetual demand for units that is independent of a demand for wealth, as well as establishing a mechanism of concentration of the debt of many owed to the few.

Step 4. Make the state endorse the unit as the commodity of commodities. Have the state endorse the unit as legal tender i.e. legally decree it as payment for all and any debts particularly public debt.

Summary and Conclusion:

Let us summarise our findings:

1) The ONLY logical function money has is as a record of a value to be redeemed in the future and by this very definition cannot simultaneously “BE” the value it represents otherwise there would be no requirement to redeem value.
2) Interim mobile supports such as bank notes are NOT required for the realisation of this function. However banknotes do require the prior existence of accounts.
3) And accounts require the previous transaction or relinquishing of wealth in order to have any useful meaning.
4) The keeping of accounts and issuance of banknotes etc. provides none of the value forfeited to create the annotation nor the value required to redeem the annotation.

The notion that money is an object of intrinsic value is a scientific and mathematic absurdity. Money is a logical entity not a physical one, it is nothing more than a record of value and therefore is not in and of itself a precursor to the creation of wealth nor is it subject to being scarce.

Once one focuses on the fact that money only represents the possibility of replenishing wealth forsaken in past transactions, does it become clear that in this context it cannot be a prize, but rather such recording of units represents a risk only made necessary by the need to measure divisions of value of otherwise indivisible wealth.
Money not being a physical thing, but rather just an abstract construct to record value debunks the idea that money needs to circulate, be bought, sold, or rented.

When we undo the Money PSYOP and discover money’s only possible function, then it becomes trivial to implement a mathematically and scientifically valid, universally accessible, open standard protocol for measuring divisions of value (unit of account/measure). This is what the Passive BIBO Currency specification here is all about and as it turns out, the theory of Passive BIBO Currency i.e. the math of measure and stability, also provides the irrefutable proof here that not only is mutual credit doable on any scale and for any size of community, it is the only mathematically and scientifically sound means by which a stable unit of account can be established.”

8 Comments Argument: why money can’t be a commodity

  1. AvatarMatthew Slater

    Your definition of money assumes that money is only a medium of exchange. In which case you are right, money need only be an accounting unit, with no intrinsic, or commodity value.
    However modern money also serves an important function as a store of value. Storage of value media ideally will increase in value over time, and hence should be backed by investments. Modern money increases in value over time because of interest, and is backed by the ability of the government to bail out the banks.
    Historically these functions are usually kept separate, but money is particularly exploitative because, as a commodity, it forces us to pay interest on our units of account. This is, of course, impossible!

  2. AvatarJehu

    “Step 1. Create a belief system whereby people accept that the value of goods and services, can be “carried” in units of an arbitrary object…”

    Ha! Well, obviously you are immune to this belief system, so everyone else on the planet must just be stupid. 🙂

  3. AvatarMarc Gauvin

    Jehu, Matthew,

    I just saw your posts now a little late.

    The problem is not “immunity to ideas” it is that money cannot logically be both a measure a store of value nor a medium of exchange see this:

    http://bibocurrency.com/index.php/downloads-2/19-english-root/learn/196-money-commodity-or-measure

    The store of value idea and medium of exchange are nothing more than allegories of the function of measure which is the only plausible option. Think about it, in order to increment your money balance you must lose value and when you recuperate that value you lose balance at no time is any value being stored but rather money only acts a record of what you don’t have while you don’t have it, that hardly can be considered a a store of value, right? Likewise with the notion of money being a medium, it isn’t because money is not physically necessary for trade, but as a record (measure) of value it can perform an auxiliary role.

  4. AvatarMarc Gauvin

    Matthew wrote:

    “Storage of value media ideally will increase in value over time, and hence should be backed by investments. Modern money increases in value over time because of interest, and is backed by the ability of the government to bail out the banks.”

    This statement is really wrong and very confused.

    1) Assuming you are talking of money as a “Storage of value media”, such a proposition is simply impossible. Anyone who claims otherwise has to provide the math to support their assertion. This statement confused record of value with “store” of value. The former a representation the latter an object of value. A worker creating a product “stores” his value in that product, money may quantify and represent that value but never does have value “stored” in it.

    2) Money does not increase in value through interest. Interest only inflates costs, reducing the ratio of goods to money. What money redeems in real value is thus reduced.

    3) Money is not backed by the government bailing out the banks, it is backed by all collateral pledged to obtain money in loans, which includes the ability for the state to tax the people to service public debt.

  5. AvatarJoseph Shirk

    Current president of the Minneapolis Federal Reserve, Narayana R. Kocherlakota concludes in his seminal work, Money is Memory:

    – money itself is useless, monetary allocations are merely large interlocking networks of gifts.
    – any technological advantages offered by money are also offered by an alternative technology: memory… memory may technologically dominate money.
    – “Why does money exist?” Often, economists answer this question by saying that money is a store of value, money is a medium of exchange, and/or money is a unit of account…
    – the only thing that money adds to society is a (limited) ability to keep track of the past.
    money may only be in imperfect substitute for high quality information storage and access.

    I cite ample proof that money is not a “store of value” in The Psycho-Linguistics of Sustainable Economy

  6. Avatarpaul

    Money should not “store” any value, they have no value by definition. Once we accept that we realize why usury is atrocious, and why you should be able to just get money when you need them for free at any time, and as much as you need it (provided you are able to repay) – in this case the idea of saving money becomes obsolete.
    But that will lead us straight to class less society, which is something current “elite” would never want – they want you to work for them all your life, paying usury fees, enriching them and supporting their “elite” status.

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