Is there not something peculiar about most descriptions of money and how it works? They seem to derive the problem from its solution. They look at a specific solution (money) then ‘find’ a more general problem to suit it. It is all backwards. This is deceptive, and a way of being trapped inside a particular view.
Before money humans seem to have a problem of ‘value-measurement’ and ‘exchange’. And then, magically, money appears and solves exactly that. Money creates a way to buy and sell things, and then its defense is: ‘If we did not have money, how could we buy and sell things?’. No: money induces certain behavioural structures and that has led us think in those terms. When you think in terms of money, everything looks like value-measurement and exchange etc..
Saying ‘money works as a medium of exchange’ is a kind of fallacy. It looks like it is explaining something, but it actually mostly says nothing: because, what is a ‘medium of exchange’? What does it mean? Search for ‘medium of exchange’, look for a definition: everything found is about money; it does not have any other meaning. All those standard gnomic phrases: ‘medium of exchange’, ‘store of value’, ‘unit of account’: they all add either nothing or little – they mainly act as elaborate generalised synomyms for money. The statement ‘money works as a medium of exchange’ is really saying ‘money works as money’. Of course it does.
This is malfunctional thinking most importantly because it leads nowhere new. Before any question might be posed the language and concepts have foregone that the only/best answer is money – a mechanism we already have. This confirms old ideas and makes it harder to think new thoughts.
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Thinking about money ought to rest on some independent body of knowledge.
Explanations of money seem like explanations but are not. Real explanations are different. If you explained a radiator, you would describe metal containers and moving water and heat. The subject is broken into lower-level physical phenomena, that can themselves be understood by further analysis and knowledge.
But explanations of money – those three gnomic phrases – are not like that. What they break down into seems either not independent or not known. Instead they mostly only propose to justify the concept by restating it in different words. It is more teleology and tautology than explanation.
A proper explanation of money would be based on information and computation, because what we are really talking about here are abstract structures of activity. Information and computation may not be as refined and rigorous as physics, but they still offer something solid, systematic, and useful. From there it seems much more possible to build a good understanding and a basis for any invention.
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