What is Money? - Sep 2, 2025

[Sherman]

What is Money?

2010 Rerun:
Definition of Money: In the 1990s here at Bob Enyart Live, I wrongly claimed that justice required a return to the gold standard, whereby currency was formerly backed by reserves of precious metals. Years ago you could return a $10 bill, also called a gold certificate, to a bank and receive a certain amount of gold. After studying and thinking about money for years, reading economic texts and reflecting on the Bible, asking questions of internationally renowned economists, I now know that the definition of money is not gold or silver (although they can be used as money). But money is more like a transferable IOU. Most accurately, money is the accounting of transferable incomplete transactions. That is what money actually is. You can see the rest of this at KGOV.com/money...

* Post-show Note: You're invited to also see our KGOV Political Spectrums chart and program.

Today’s Resource: You can enjoy one or two of Bob Enyart’s entertaining and insightful videos each month, mailed to you automatically, simply by subscribing to the BEL Monthly Topical Videos service! Also, you can check out the other great BEL subscription services!

 

[Ps82]

My thoughts ... I'm no expert ... and admit I haven't taken the time to check out the above links. They're probably over my head anyway. But, my family and I do think about money and how to manage it.

Gold has been a good back up for money for 1,000s of years. It was and is still desired for all sorts of things: jewelry, idols, beautification projects. Even coins. Jesus used coins out of a fishes mouth to pay taxes owed because it was the accepted way.

However, in our time gold is probably more rare and even more difficult to mine. Then our money was turned into a government promissory note. Our government and economy has been one of the most secure and has worked in our favor, but now...??? Not so sure.

All our savings, which we intend to leave to our children, seems so risky to me. It has become just numbers in computers managed by people we don't know well. I think: One day some entity with power and authority can just hit a delete key. Scripture says that the Anti-christ just might do things like that to persecute believers. China, I've heard, already does!

So, I have a suggestion for our younger generation.
Learn where their real security lies. Skilled workers are always needed; so, whether you become a big executive or a pencil pusher or a computer operator in an office your best back up plan for security is to have knowledge of multiple basic skills. The more the better. Jobs are not guaranteed these days. Certainly ones with retirement plans are more rare. You and your family will be decimated if you loose any job. Sure, skilled jobs do not lead to fat salaries, but they will put food on your table and maybe more when you need it. In fact farming skills would be a blessing and I know an electrician who do very well even now.

With multiple skills you can even barter for things you need. Everyone should have a skill to trade for things they need. Bartering would not be buying and selling; so, it might become a survival loop-hole if needed in our life-time if the anti-christ comes before we are raptured. I think this is the new money in times to come.

 

[Right Divider]

Gold has been a good back up for money for 1,000s of years.

If gold has been a "good back up for money"... what is "real money"?

However, in our time gold is probably more rare and even more difficult to mine.

Its rarity is one of the things that make it good money.

Then our money was turned into a government promissory note.

Which is a complete disaster.

Our government and economy has been one of the most secure and has worked in our favor, but now...??? Not so sure.

You are misinformed. The printing of money out of thin air benefits the wealthy and connected that get the "new money" first. Everyone else gets the value of their money reduced (i.e., stolen).

 

[7djengo7]

What is Money?

Hmmm, good question. As answering it is obviously best left to the experts, if anyone would like to hand me some, I'll be glad to take your samples back to the lab for some well-funded research and analysis! Better accuracy of results with larger sample set, so larger bills preferred!

 

[ok doser]

I remember getting in a debate many years ago here with somebody who was arguing for a return to the gold standard and he was denigrating fiat currency by referring it to it as "pretty scraps of paper".
I reminded him that what he was proposing was changing it to a system based on shiny rocks

 

[Delmar]

Money is a representation of how hard you have to work to.gwy what you need.

 

[Right Divider]

Money is a representation of how hard you have to work to.gwy what you need.

Not quite true.
Money is a store of value. It has nothing to do with how hard you work for it.

 

[Clete]

Not quite true.
Money is a store of value. It has nothing to do with how hard you work for it.

“Nothing to do with it? Are you sure?”

Money is your time and energy, transformed into something that can be exchanged. It is precisely your time, your hard work, your effort, your productivity that give anything value. Money is your life transformed into something exchangeable. It is life itself that gives things value. This is why theft is immoral. It is anti-life.

Why is gold valuable? Why do people want it more than they want dirt, sand, or sea shells? Why is silver worth more than aluminum, or helium, or granite?

The answer is scarcity, yes, but scarcity alone means nothing unless it takes work to acquire it. Gold is valuable because it is rare, AND because it requires real labor to extract. The harder it is to get, the more it is worth. That is not arbitrary; it is rational.

And that principle should apply to all money. The medium of exchange should be as hard to acquire as the goods and services it can buy. When governments and banks create money out of thin air, they sever that connection. They use the newly created money, which cost them effectively nothing, to buy real commodities like oil, land, or metals, pushing that money into circulation while capturing the value for themselves in the form of real property.

They benefit from inflation because they spend the money before the inflation takes effect. The Federal Reserve's so-called two percent inflation target is a mechanism of wealth transfer. It slowly drains the value of everyone else's money and channels that value into the hands of those who created and spent the money first.

So yes, money has everything to do with work. When money no longer represents effort, it no longer reflects value. It becomes a tool of theft rather than a means of honest trade.

 

[Clete]

Money is a representation of how hard you have to work to.gwy what you need.

....or want.

 

[Clete]

I remember getting in a debate many years ago here with somebody who was arguing for a return to the gold standard and he was denigrating fiat currency by referring it to it as "pretty scraps of paper".
I reminded him that what he was proposing was changing it to a system based on shiny rocks

That is a clever jab and probably earned a few laughs, but it is a hollow win. Comparing gold to paper money by calling it “shiny rocks” ignores the fact that those shiny rocks are incredibly hard to dig out of the ground. In actual fact, "paper money" isn't the problem at all. It's the fact that the current version of paper money isn't backed by any real property (e.g. gold, silver, even real estate would work). The problem is that it's a fiat currency.

The saying goes, "Money doesn't grow on trees.", but fiat currency is even worse than if it did. If money grew on trees, at least someone would have to plant the trees, tend to them while waiting for them to grow, harvest the money, bundle it, and bring it to market. That would take time, effort, and cost.

With fiat, you don’t even get that. All it takes to increase the money supply is to make an entry in a banker’s ledger. A customer deposits one dollar, and the bank is suddenly allowed to lend ten, nine of which never existed to begin with and none of which belongs to the bank. On top of that, the bank gets to charge interest on all ten dollars AND collect fees from the guy who made the original deposit.

And that's just the fractional banking aspect of our fiat currency system and doesn't touch the inflation created by the government printing money into existence on demand and their incessant spending of money into the economy that doesn't exist at all except as national debt that it owes to itself.

Fiat currencies are a scam from start to finish. It's a fancy, government sponsored, ponzi scheme and will have the same ending that it's always had throughout history.

 

[Right Divider]

“Nothing to do with it? Are you sure?”

Yes.

Money is your time and energy, transformed into something that can be exchanged.

You seem to be confusing WHAT money is with HOW people typically obtain it.

It is precisely your time, your hard work, your effort, your productivity that give anything value.

That is FALSE. Value is subjective. That is why a canvas with a little paint and a little effort can be "worth" 10's or even 100's of millions of dollars. That's why a little piece of cardboard and some ink (baseball cards) can be worth 1000's of dollars or more many years later. etc. etc.

Money is your life transformed into something exchangeable.

That is HOW people typically get money. That is NOT WHAT money is.

It is life itself that gives things value.

Value is SUBJECTIVE. Different people can value the exact same thing quite differently.

This is why theft is immoral. It is anti-life.

Theft of any possession is immoral. Money is just one of those things.

Why is gold valuable? Why do people want it more than they want dirt, sand, or sea shells? Why is silver worth more than aluminum, or helium, or granite?

The answer is scarcity, yes, but scarcity alone means nothing unless it takes work to acquire it.

Value is SUBJECTIVE.

Gold is valuable because it is rare, AND because it requires real labor to extract. The harder it is to get, the more it is worth. That is not arbitrary; it is rational.

Gold has intrinsic value. Gold is useful for many things. Rarity or effort to obtain does NOT make something intrinsically valuable.

And that principle should apply to all money. The medium of exchange should be as hard to acquire as the goods and services it can buy. When governments and banks create money out of thin air, they sever that connection. They use the newly created money, which cost them effectively nothing, to buy real commodities like oil, land, or metals, pushing that money into circulation while capturing the value for themselves in the form of real property.

On this we agree. The problem with printing money is that it's too easy to create more. And the people get the "new money" are the ones that benefit while everyone else gets screwed.

They benefit from inflation because they spend the money before the inflation takes effect. The Federal Reserve's so-called two percent inflation target is a mechanism of wealth transfer. It slowly drains the value of everyone else's money and channels that value into the hands of those who created and spent the money first.

Yep.

So yes, money has everything to do with work.

No, it doesn't. That is NOT WHAT money is... that is HOW people typically OBTAIN it.

When money no longer represents effort, it no longer reflects value. It becomes a tool of theft rather than a means of honest trade.

That is the difference between what I would call "real money" VS the fiat currencies of today.

 

[Clete]

Yes.

You seem to be confusing WHAT money is with HOW people typically obtain it.

That is FALSE. Value is subjective. That is why a canvas with a little paint and a little effort can be "worth" 10's or even 100's of millions of dollars. That's why a little piece of cardboard and some ink (baseball cards) can be worth 1000's of dollars or more many years later. etc. etc.

That is HOW people typically get money. That is NOT WHAT money is.

Value is SUBJECTIVE. Different people can value the exact same thing quite differently.

Theft of any possession is immoral. Money is just one of those things.

Value is SUBJECTIVE.

Gold has intrinsic value. Gold is useful for many things. Rarity or effort to obtain does NOT make something intrinsically valuable.

On this we agree. The problem with printing money is that it's too easy to create more. And the people get the "new money" are the ones that benefit while everyone else gets screwed.

Yep.

No, it doesn't. That is NOT WHAT money is... that is HOW people typically OBTAIN it.

That is the difference between what I would call "real money" VS the fiat currencies of today.

You’re making a distinction between what money is and how people obtain it, but that’s not a meaningful distinction in the context of this discussion. If real money had nothing to do with how it is obtained then stolen money would be just as valid as any other. You are attempting, though unintentionally, to define money in terms of its negation.

The very reason money exists as a medium of exchange is because of what it represents: labor, time, effort, production (i.e. expended life). It is not just a random token, it is a claim on value created. The point being that money derives its value precisely because of labor. Without work (i.e. both mental and physical) and production, there is no value to be represented or exchanged.

You keep saying that "value is subjective," but you're only applying that in the narrowest way possible. Yes, different people can subjectively prefer different things, but subjective preference does not explain why people are willing to trade real resources for one thing and not another. A painting may be "worth millions" because of subjective demand, but that value only becomes real when someone parts with hard-earned money to obtain it. That transaction is grounded in the expertise it took to earn the money. Otherwise, it’s just a made up number. In other words, a painting or other form of luxury does not have innate value. It's value is derived. Derived from what? Not merely someone's desire to have it but their willingness to part with money in exchange for it. How much money depends on two factors - the degree of their desire for the luxury and the effort it took to acquire the money. If the money is earned, the price for the painting will be one thing, if it is stolen money, it will be another.

Why is that? If effort had nothing to do with the value of money, then why are thieves consistently forced to settle for a fraction of the retail value of what they steal? When they sell a stolen item, why does it bring far less than market price? The answer is simple. Because it did not cost them anything to obtain it, and because the buyer knows that. And so while the value of a product or service might be subjective, the value of the money spent to buy it ought not be.


Scarcity alone is not enough either. Scarcity only matters when something is desirable and hard to produce. Sand is abundant. Diamonds and gold are not. And even if they were equally rare, it is still the cost and difficulty of extraction, refinement, and use that determines their market price. This is why fiat currencies are dangerous. They break the link between money and the work it represents. When someone can simply create money with no effort, it is no longer a store of value, it is a tool of manipulation and theft used against those who have no honest means other than their effort to obtain it.

So, no, I am not confusing what money is with how it is obtained. On the contrary, I am saying they are inseparable. Money exists because human beings spend their lives to produce things other people want. That work is what real money represents and it is what gives it meaning. If money could not represent past effort or future claims on value, it would be no more useful than Monopoly money.

You agree with me when we get to inflation and fiat distortion. What I am pointing out is that the very reason fiat currencies are unjust is because they decouple money from labor. Indeed, fiat money systems are, in fact, in the process of turning real money that stores real value, into the equivalent of Monopoly money.

 

[Right Divider]

You’re making a distinction between what money is and how people obtain it, but that’s not a meaningful distinction in the context of this discussion. If real money had nothing to do with how it is obtained then stolen money would be just as valid as any other.

Not sure what you even mean by this. Someone accepting money for a transaction cannot tell the difference between stolen money and non-stolen money.

You are attempting, though unintentionally, to define money in terms of its negation.

Again, I have no clue what you mean.

The very reason money exists as a medium of exchange is because of what it represents: labor, time, effort, production (i.e. expended life).

No, it does NOT "represent labor, time and effort" ... it represents value.

It is not just a random token, it is a claim on value created. The point being that money derives its value precisely because of labor. Without work (i.e. both mental and physical) and production, there is no value to be represented or exchanged.

Even money has subjective value. When people use money to buy something... they value the something more than the money. Otherwise, they would keep the money (i.e. value it more).

You keep saying that "value is subjective," but you're only applying that in the narrowest way possible. Yes, different people can subjectively prefer different things, but subjective preference does not explain why people are willing to trade real resources for one thing and not another. A painting may be "worth millions" because of subjective demand, but that value only becomes real when someone parts with hard-earned money to obtain it.

Again, THEY valued the thing at that level. Until then it was worth very little (to others). Value is subjective.

That transaction is grounded in the expertise it took to earn the money.

No, it's not.

Otherwise, it’s just a made up number.

The "value" of the artwork is a made up number. It is whatever value that the individual places on it.

In other words, a painting or other form of luxury does not have innate value.

That's what I keep saying.

It's value is derived. Derived from what? Not merely someone's desire to have it but their willingness to part with money in exchange for it.

BINGO... subjective value.

How much money depends on two factors - the degree of their desire for the luxury and the effort it took to acquire the money. If the money is earned, the price for the painting will be one thing, if it is stolen money, it will be another.

Not following. Does the seller know if the money is stolen or not?

Why is that? If effort had nothing to do with the value of money, then why are thieves consistently forced to settle for a fraction of the retail value of what they steal?

Because the value of the stolen merchandise is less to one that the stole it than to the one that it was stolen from. Value is subjective.

When they sell a stolen item, why does it bring far less than market price? The answer is simple. Because it did not cost them anything to obtain it, and because the buyer knows that.

The buyer may or may not know that. But the seller values it less that the original owner. Value is subjective.

 

[Clete]

Not sure what you even mean by this. Someone accepting money for a transaction cannot tell the difference between stolen money and non-stolen money.

The person spending it can and to a large degree so can the person accepting the money. People have a sense of what something is worth. That's the reason the saying "If it's too good to be true, it probably is." works.

If someone is willing to spend far more for something than it's worth then there's a good chance the money their spending isn't theirs. Money that isn't earned falls through your fingers like water precisely because you don't know (or care) what it's value actually is. This is why people who win the lottery are broke in a decade. This is why the thief is never satisfied with his last heist. This is why the "welfare" recipient remains poor, no matter how much free stuff is handed to him.

Again, I have no clue what you mean.

Read the whole post before starting to reply and you'll have an easier time.

If money is money whether you earn it or not, then thieves would get full price for their stolen goods. THE reason they accept less than the stuff is actually worth is precisely because they didn't have to earn it.

No, it does NOT "represent labor, time and effort" ... it represents value.

It is literally the EXACT same thing. Nothing has value that doesn't cost someone their time and effort (i.e. talent) to acquire. The less talent, the less value. There are no exceptions.

Even money has subjective value. When people use money to buy something... they value the something more than the money. Otherwise, they would keep the money (i.e. value it more).

Well, this disregards the concept of equal exchange, which is what happens most of the time. That is, most of the time - in an actually free society that uses money with real value. Such distortions as you suggest can only happen in a wide spread, macro sense, in a system built on theft and dishonesty. Otherwise, money would have never gotten started in the first place.

Again, THEY valued the thing at that level. Until then it was worth very little (to others). Value is subjective.

I've already responded to this.

Various things are of varying value to various people for various reasons which is why you do not want a monetary system that is just as subjective.

If it were as fast and loose as you are implying, economies wouldn't work at all because there'd be no way to know whether you were being swindled.

No, it's not.

It absolutely is. Any exception you care to name with be an example of one form or another of theft.

The "value" of the artwork is a made up number. It is whatever value that the individual places on it.

No it flat out it not!

There might be one lunatic that pays an exorbitant price for a particular piece of art but that would be the exception, not the rule. The rule is that there is a market for a particular item. The buyer doesn't set the price by himself and neither does the seller. The seller doesn't want to take less than what someone is willing to pay and the buyer doesn't desire to pay more than the seller is willing to take. In a functioning economy these two forces find an equilibrium and does so with nearly perfect efficiency. The bigger and more liquid the market, the more efficient the prices for the products, services and commodities available in that market.

And it isn't an illusion! The real value of things are determined in such markets. You are trying to define the value of not only money but of the things money is used to buy in terms of the negation of the very thing that make money work in the first place.

That's what I keep saying.

BINGO... subjective value.

You are defeating your own argument. I know you can't see it but if what you are saying were true, money wouldn't work at all. It would be bartering or nothing at all.

Not following. Does the seller know if the money is stolen or not?

That isn't relevant.

If you were given all the money in the world, would you care how much it cost to buy an apple?

In place of "apple" but ANYTHING you care to buy.

If I have a million dollars that I stole, I might be willing to spend half of it to buy a piece of property that I'd only spend a quarter of it on had I earned that same million dollars. WHY? It's precisely because I had to earn it! I cost me more to get it and so I'm not willing to part with it quite so easily.

Because the value of the stolen merchandise is less to one that the stole it than to the one that it was stolen from. Value is subjective.

You seem to be intentionally ignoring the point.

WHY is it that the value of the stolen merchandise is less to one that the stole it than to the one that it was stolen from?

Why? It is not mere baseless personal opinion or fanciful whim. Just because something is subjective doesn't mean it that its pretend or delusion or irrational.

The buyer may or may not know that. But the seller values it less that the original owner. Value is subjective.

The statement was made with the assumption that the buyer does know that. When a thief fences his stolen merchandise, the buyer always knows that he's receiving stolen goods. That's why its a crime to receive stolen goods. Honest people who don't want to receive stolen goods take measures to ensure that the things they are buying aren't stolen, not the least of which is to pay a fair price for it.
Honest people know intuitively that a running car is worth more than the $500 the thief is trying to sell it to them for. The pawn shop owner keeps detailed records of when he bought what and from whom and keeps everything he buys for weeks or months before making any attempt to sell it to someone else precisely because he knows that what he's bought might turn out to be stolen.

And guess what he, the honest shop owner, doesn't ever sell ANYTHING for?

Less than what it actually worth!

He might want to sell it for one price but he doesn't get to decide that. If he insists on charging three times what something is worth, it'll sit on his shelf until the cows come home or until a sucker comes through the door but then that's just another form of theft. I'm telling you, there are no exceptions that aren't one form or another of theft.

To buy something for less than you know its worth is theft (presuming it isn't a form of gift being given to you) and to sell something for more than you know its worth is also theft. Generally speaking, to intentionally gain something you didn't earn is theft (obvious exceptions are gifts, as well as things of value that are found).