It has been said to make the world go around. It has been maligned as the root of all evil. It breeds litigation. It spurs negotiations onward. It serves as commercial and political lubricant. Alexander Hamilton once called it the “darling [object] of human avarice and enterprise”.
We fill our wallets and our bank accounts with it, we spend it or save it, we go to work each day to earn it. But do we really understand it, this thing we call money? What is its fundamental nature? What is money anyway?
Legal scholar John J. Chung, Associate Professor of Law at Roger Williams University School of Law, has some surprising and provocative answers in a recently published paper, “Money as Simulacrum”. From the abstract:
This paper explores the meaning and nature of money, and the form in which money exists today. It begins by asking such basic questions as what is money and explores the history and development of money. We live in a world of increasing and stunning wealth, a world where billionaires are as common as millionaires once were, and a world of increasing wealth inequality. This paper contends that such a world exists because money is a pure simulacrum that has taken on a reality of its own, a reality that is now untethered to the fact that money’s significance used to be limited by its role as a symbol of an underlying thing of value. But money is now a pure thing in and of itself, with value, existence and purpose that is independent of any signified thing. When money became released from its role as symbol, the foundation was laid for the world we live in today…The purpose of this paper is to discuss money in its original conception, money as it exists now, and where the meaning and nature of money may be headed.
Money is now a pure abstraction with its own self-referential value and reality, whose creation is no longer constrained by a reference to anything else. It is no longer a symbol; it is its own reality.
To understand the history of the dollar or the euro in your pocket as well as its deeper meaning in the early 21st century, read “Money as Simulacrum“. Your time will be well spent.
(Thanks to Steve Hicks for the link.)