The Emperor Has No Money

I’ve been thinking lately about money. What is money? Is it real? If not, what is it?

Let us consider what money is for most of us – figures on a screen. Figures on a computer screen, a cashpoint screen, a bank screen, a website screen. Figures that go up on one site and down on another. It’s a see-saw – the less you have, the more I have, and vice versa. Money is just figures on a screen.

Before that – and sometimes alongside it – we have something that seems more ‘real’. Cash.  We call it ‘hard’ cash: the Spanish call it effectivo.  We call it currency. We talk as though it’s like rock; the bedrock of life, something that underpins everything and cannot be altered. You can hack away at little bits and sometimes strike a rich vein – if you’re lucky enough to own a mine you can dig up lots of the stuff and be rich – but most people have to orient their entire lives around earning and spending.

Money is mostly paper. The hard coins are worth less, though they seem more durable. Money is pieces of paper passed to and fro. They have value only in the moment of spending; until then they are only potential. To keep money is meaningless in itself, though saving for a ‘rainy day’ may be sensible. But suppose you save too much and it never rains – what then? You are missing out on the sunshine.

But what is paper money? Is it something real or only a conspiracy? I suspect the Emperor has no clothes. Observe the paper. It has symbols written on it and the head of the monarch. But what actually is it? Read the writing: it says ‘I promise to pay the bearer on demand the sum of —- pounds.’ What the hell does that mean?

It means, my dear friends, that the piece of paper stands for something. It is not, in itself, a thing but it represents something – namely, gold. So that the figures on the screen, though hard to fake, are mere representations at not one but two removes; a representation of a representation. The only real thing is gold.

Gold has some intrinsic value. It is not a mere conspiracy: gold never tarnishes or rusts; it doesn’t wear away. And it is rare. Therefore there is some sense in valuing it.

But suppose the figures on your screen are very low or in negative numbers. The consequences of this, thanks to the general conspiracy that everything must be powered by these figures, can be dire. You can lose your home, your amenities and your ability to buy any of life’s necessities, from food and clothing to transport and entertainment. The consequences of not having a high enough figure on your little screen can be severe.

Although they seem contingent and meaningless, the figures are very hard to manipulate. Just as it’s very difficult to forge currency, so it’s hard to alter these figures on a screen without the proper authority. Most of us have security on our accounts – pin numbers, security codes, memorable names etc – to prevent fraud. And yet when you stand back and look at it, the whole thing seems utterly pointless and stupid. That people can live or die for the want of this stuff; that some can afford huge houses and flash cars and others sleep on the pavement, all for the want of these figures, these bits of paper and metal, seems utterly insane. We’re too used to it; we take it too much for granted, for this to strike us on a daily basis – but if you take a step back and think about it, the whole thing’s mad.

The Emperor has no clothes at all.

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Filed under philosophy, politics

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