What is Money?

So, I've been wondering exactly what money is, or perhaps what it represents. I've come up with "stored work" as a start. It represents work done and future work that could be done - it buys future work. I know that it acts like a contract of value but really that value is ultimately work. So you buy products but the work done to collate, create, design, assemble, etc make up the product. Services are more straight forward of course. They are money for work.

I guess that, based on this idea, profit is where the money your given buys more of someone else's work than the amount of work you had to do to get the money in the first place.

For me the best type of work, value, wealth and profit occurs when someone does work and the outcome of the work lasts for a long long time. It actually helps someone else do their work more efficiently. It is not easily destroyed or consumed. It maintains its value. For me the perfect scenario is if I create something that someone else wants, it takes me a minute to make it and it lasts for a million years. Nobody needs buy another one. Of course that's not possible but just showing the greatest outcome possible. Making wealth is when the works done, well to a degree.

Loss, the destruction of value, of money, comes when time, or disaster or poor workmanship destroys the thing that has been worked on - or that type of work isn't needed or valuable to society anymore. The work is gone and no longer worth money. Poverty is when there is a lot of work to do and not enough capacity to do it.

If there is a problem with our system then it seems to me that all 'work' is not properly valued. Money is the only measure. I don't have a problem with work, but not all work is good. Yet the system likes it when people work, any type of work, all work. The system seems to rejoice when something breaks and it has to be made again. When something is unnecessarily super seeded. Just as long as work is done.

Humanity wants work to be long lasting but the system we has doesn't always reward it for being so.

Sharing wealth - the outcome of work

Unemployment annoys me.

I'm prepared to accept that there needs to be a degree of unemployment in the system. Things change and I guess that is the main thing I'm thinking about. People move, businesses close, industries are no longer needed, restructuring and the idea that new people are coming in to the system while old ones retire. That's all fine and makes sense. Thats unemployment of a short term nature. People moving from one Job to another.

It's entrenched unemployment that bothers me. While there seems to be all sorts of complicated laws and expectations that make employing someone difficult, when the system fails in its duty to employ it seems to me that the economy is saying "there is nothing of value that can be contributed" by the unemployed person - that all the work is done. Worlds perfect, job finished. No more jobs need to be done. It seems to me that some work , any work , is valuable - and that all can contribute in this way, I some way.

While the economic system distributes wealth (the bi products of work) it also distributes work, who does it and what that work will be. Is there a limit to the work that can be done? Is there a limit to the wealth that can be created? The unemployment rate suggests that maybe there is.

(I've avoided the laziness argument here, it might be relevant but I think most people want to contribute)

Weird demand

Supply and demand. When you purchase something you create a demand for it and supply is increased to meet that demand. Buying something causes someone else to do something with their life on earth, to create more of the thing you bought. You created a job. Is it a good job? Is it a good thing? Is your need or want fulfilled? If it is then the system is working, but I have my doubts that all 'demand' is a well considered purchase. 

First things first. Im reliably informed that two important drivers of the economy are supply and demand. It's the second part I want to talk about. Demand. What is it? Where does it come from? So, I gather, when I buy something, that is me indicating that I want it  - creating demand in the system. Im not sure how else I indicate my 'demand'. (I understand that we do surveys of businesses that ask them to predict their future demand and this might be a measure, but its really like me saying I might want to buy a hamburger next month, I know Ill need food and that it might make up a part of my diet and if it is usually a part of it then that might be a good measure, but I understand the purchase to be the demand). There are of course a number of things I would buy but cant afford so I assume that lots of other people want them too, so their demand (as well as mine) is pushing up the cost as the supply cant meet the demand. Thats my feeble understanding. So, I imagine we are all in a line. On a teachers wages in my country Im probably about half way down that list, not bad. I can afford all the things I need (demand) and some of the things I want (demand) but I imagine there are other people in front of me with more money that are prepared to pay more than I am to have the thing we both want, and perhaps Im doing the same to someone else. Like the demand for a nicer house. So demand comes from wants and needs.

Here comes my question. Can't we all agree that there are just some things not worth having. I realised this while seeing the 'fake spew' in the Showbag section of my local easter show. Its fake spew! A plastic, gelatinous spew like sculpture that you can buy. I guess you put it somewhere in the hope that you can fake them out. Im assuming someone is buying it, they create a demand, and so it is supplied. Someone, somewhere, is in a factory and is using their human potential to create it and that makes me angry. That person, it would seem to me, could make any number of products I really need, cheaper and more accessible for me and the rest of the system! This demand shouldn't exist. Then it occurred to me. Maybe nobody actually wants it. It comes with other things in the Showbag. Many of which are infinitely more desirable like lollies. It made me realise that not all demand is the same. I went to a conference earlier in the year and received, upon signing in, a stupid bag with a pen and a few other things in it. Only one of the things I wanted - the program, much more useful digitally provided  to me later anyway. Nobody I knew wanted these 'free goodies'. There was little to no demand from the end user. It felt rude and needlessly complicated to reject the bag upon signing in. To make things worse I brought them home, on a flight, that demand created further demand for fuel. Then I threw it all in the bin, creating demand for waste services.

This is economic success as I understand it. Increased consumption. Yet it doesn't meet our needs or wants. The demand doesn't exist at all. Someone, somewhere is employed doing something NOBODY WANTS. I think carefully when I purchase things in this regard. the economic assumption that people will be careful with their money and only use it to buy things they want or need seems to be a flawed assumption and one way our system fails.         

Have you been part of creating a demand without wanting or needing the item in question?

Questionomics - Rules of the system

Questionomics

Firstly, I don't know anything about economics (except that I seem to be a small part of the larger system) and as for Capitalism, well, it seems to me to drive the more important aspects of our society but I am certainly no expert. I expect that I probably have a lot of questions because I am ignorant of certain aspects of the system. Never the less, it seems to me lately, that the system is in some respects broken - or perhaps the system works but we don't.

At any rate it seems to be important.Certainly it seems to have, at this stage, a more profound effect on Australian's than their democratically elected representatives do. That's not a crack at them, truly its not - it seems as much as anything that they themselves are fixated on the economy as the means by which they provide their good governance. Discussion of balanced budgets, the official interest rate, GDP, GNI, taxes and government handouts are most of what they discuss. Direct government interventions are second and I guess if you read the more detailed 'opinion' sections of your state paper you'll find discussion of trade barriers, unions, corporate governance and the other aspects of our complicated economic system.

I wanted to write a blog that asks the simple questions. It began as a thought experiment while I tried to casually explain to my three year old what money was. I said it was how we did sharing. (Which I thought was a pretty good explanation for a three year old really) He is now almost six and the questions have kept coming, especially since he worked out what it does. I've called it 'Questionomics' because it will probably raise more questions than answers. I guess that's the point. It seems to me that the whole thing would run a lot better if we just thought more about it, and thats it. The goal. Think about the system that is so much a part of us.