MoneyMuseum’s 12 Theses
1 Today’s money is about 500 years old
Modern money emerged in Europe at the end of the Middle Ages as feudal economies collapsed and were replaced by a market economy. The word money derives from the Latin moneta, an epithet of Juno, the Roman goddess in whose temple coins were minted. Of course, coins were used in antiquity and the Middle Ages but they were never the exclusive medium of exchange. Payment of a debt or settlement of an obligation could be made with other things. While there were some markets in the Middle Ages where goods could be purchased
with coins, they were never universal. And business enterprises focussed on profit were unknown. A winlose view of trade prevailed: one person’s gain must be another’s loss. The change to a win-win view, as we regard the dissemination of information today, evolved only slowly and when it arrived it ushered in a new way of thinking. The nation state was essential for the development of modern money. Only a central authority could enforce a monopoly on money and without such a monopoly, money in the modern sense could not exist.
2 Money didn’t arise from barter From antiquity to the Middle Ages barter played a subordinate role in traditional society. It was widely used but never was decisive for society as a whole. And a distinction was made between bartering with friends and with strangers. Exchanges with friends were strictly nonliquidating. That is, the exchange did not aim to settle a fixed price. Instead,
a slight imbalance always remained between the two parties. One could say a ”friendship price“ was agreed. And small traders who used cash in liquidating transactions were disparagingly called hawkers. They had to make more coins out of the coins they started with, which in the Middle Ages was regarded as a sin. Such traders were disdained until around 1500.
3 Money is an economic and a social medium
Money is more than a medium of exchange. It has become a medium with profound social and cultural implications. The market economy is money-based. The analogy of a fish in water serves to explain. The fish only notices water when
there is none left. So it is with modern society in the money-based market system. Money guides us and forces us to act according to its own logic, the logic of money, without our being aware of it.
4 A new understanding of
money is urgently needed
As a society, we urgently need an interdisciplinary understanding of money that takes a wide range of views into account. It should not only explain how money works but also identify the properties, methods and effects of our money-based system, with its inherent constraints, advantages and disadvantages. Regrettably, academic economics has evolved in the opposite
direction, growing ever more specialized and ever less open to interdisciplinary collaboration. Today’s professional economist is all too often a mathematically trained specialist who only accepts what can be measured and modeled and bears little resemblance to the philosopher Adam Smith, the founder of modern economics.
5 Money’s future involves the
future of private property and the state’s monopoly on money
The three issues are interconnected. Today’s money extends from the nation state’s money monopoly and the unconditional status of private property. Private property and the monopoly on money are mutually dependent, because today
we expect to be able to buy anything, but only with state-sponsored money. Without clearly defined, scrupulously enforced property rights, the capitalist world breaks down, as we have seen in many places around the world.
6 The growth imperative of our economy comes neither from interest rates nor greed
The modern economy’s constraint to grow comes from the fact that after a transaction goods are consumed but money is not. After visiting a restaurant, for example, the plates are empty and the bottle has been drunk, but the money we paid for our meal? It continues to exist and the restaurant’s proprietor will spend it to buy products and services. Money changes hands, always
becoming the property of another, and every owner must strive to make more money out of the money he or she acquires. This is how money accumulates exponentially. Economists speak of the “velocity of money,” the number of times a sum of money is spent over a given period of time, but then measures only the original sum and not how that money has grown with each transaction.
7 Money must always make more money
Money as capital has to grow. This is the big difference today to antiquity and the Middle Ages. Back then, coins were not seen as capital that itself had to make a profit.
In the “new era,� however, money suddenly became capital, for which profit (growth) is essential, giving a name to an entire epoch of history: Capitalism.
8 Modern money has taken the form of credit
In the early 16th century, the volume of credit exceeded the coin volume. As economic activities increased, the coins in circulation often could not keep up with demand. So records of transactions were kept in ledgers and the credit volume surged. But with the rise of credit-money, an ever-expanding financial economy was needed, since the real economy has no need for so much money all
at the same time. Financial exchanges were created in the 17th century. In the financial world, money is not actually money. Rather, it is called financing. Only for a brief moment, when financing is exchanged for money to effect an exchange in the real world, is financing once again money, which immediately seeks out new profit opportunities in the financial world.
9 Money commands
the labor of others
Some people have property that can be sold to get the money they need. Most, however, only have themselves and the value of their labor to earn money. And most feel they are forced to make their labor
available to others, for the money they need. Because without money, survival in modern society is out of the question. In this way, money exerts power over the labor of others.
10
Money produces social exclusion
Whatever people can acquire with money, and that’s almost everything, they first have to be barred from getting it until they have money. However, due to its unequal distribution, some people will be excluded from money’s privileges and rewards. And because people strive to integrate into a larger community, the social schisms created by
money constitute a profound problem that is increasingly evident today. Goethe recognized this problem as a priority for the 19th century. He described money as the great unknown but only wanted his thoughts on this subject to be published posthumously. Today the explosiveness that he had recognized is painfully apparent.
11 Money begets competition
Money creates competition among people because everyone has to get their money from someone else. Thus, anyone who provides a similar product
or service is a potential competitor. It is easy to imagine what kind of society tends to develop from this view of the world.
12 Money controls how we think
Modern man thinks in money, that is, he reduces most aspects of life to fit one scale. This scale, money, is simply a number. The greater the interaction with money, the stronger this reflex is to see everything in terms of money — quantifiable, but devoid of content. We
call this way of thinking, in which the content is interchangeable, “functional.” This mindset is applied well beyond moneybased transactions. Eske Bockelmann explains it best and he does it in just seven minutes, at the link: snips.ly/thoughtform