"Hey wait a minute!" I can hear you saying. "What a question! What is money? The green stuff! Moola! Revenue, profit, costs, taxes. It's all about money! What are you thinking?"
Well, not so fast. What about frequent flier miles, or any other kind of loyalty points? What about coupons? What about those crazy Bitcoins? Or euros, yen, RMB, pesos? Well, yeah, there are all kinds of money. And be warned if you start down this path, because, trust me - once you start thinking about it, you will see different forms of money everywhere you look.
So, here's the thing. Anyone can create money. The only question is, will anyone else accept it? Say you declare tomorrow, "I have just created BarbaraBucks, and you can earn them by ..." So someone comes and does ..., and you hand them a fistful of BarbaraBucks for their trouble. Awesome! So they go off happy as a lark and spend all those BarbaraBucks, hmmm, where? That's the point. The only, simple key. Your money, any money, is only as good as the agreement with some other people that they will accept it. That they will let you spend it.
So that's the definition of money. Don't let anyone tell you different. This is incredibly important. The definition of money is that there is an agreement that someone will accept it for payment. That someone will let you spend it. That someone else really wants it, and will exchange it for something you really want. That's it. Simple. But, of course, not so simple at all, really. Because who really wants to accept it, and can they turn around and find someone else who wants to accept it, and can they turn around and find someone else who ... You get the picture.
In the context of this expansive view of what money is, we can always talk about the two core functions of money as being:
- A store of value
- A medium of exchange
From a technical perspective there is one other key factor that defines forms of money. This is the difference between value that is derived from the use of something, and value derived from the exchange of something for something else. There are some forms of money that have both use value and exchange value. Coins, for example, may be made from metals that have value simply as the metallic substance. Silver is a great example. Apart from its use in decorative artifacts, such as jewelry and home ornamentation, silver is also in great demand as an industrial material. Of course, this is basically true of gold, as well. But the more interesting cases involve things such as the gangland practice of using bottles of liquid detergent as money. This kind of thing has become so common that law enforcement has a term for the practice - organized retail crime, or ORC.
There is a lot to be said about different forms of money, including many forms of alternative or complementary currencies. For instance, there's the practice of forcing a currency to devalue over time, to keep it constantly in circulation and avoid hoarding. This practice is known as demurrage, one of the more esoteric aspects of moneys! The point here is that your healthy business can benefit from a creative approach to funding and money itself. In order to help you with this, here is a link to a site where you can find a number of barter networks, each one using some form of alternative currency to encourage different forms of trade: http://www.irta.com/
At a later time I intend to say more about some forms of money that I am excited about as a major boost to business and the economy. When I do, I plan to come back here and make a link. Help me remember to do that, please? Thanks!
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