Sunday, July 20, 2008

Why I LOVE Money


Reporter: But I thought you were a "Bible-believing Christian." Doesn't the Bible say "Money is the root of all evil?"

Actually, the Bible says "The love of money is the root of all evil" (1 Timothy 6:10, KJV).

Reporter: OK . . . still . . . aren't you in flagrant opposition to the Bible by saying you "Love Money?"

Actually, when the Bible condemns those who are "lovers of money," it uses a Greek word which literally means "lovers of silver," "because," as St. Augustine says, "among the ancients, coins were made of silver."

Reporter: Yeah, but aren't coins money?

Of course!

Reporter: Then aren't you still in opposition to the Bible by saying you love silver coins that function as money?

I honestly don't think so. When I say "I Y Money!," I'm not saying I'm like Scrooge McDuck, who likes to accumulate coins made out of gold and silver, just to have more coins:

I'm saying I think "money" is the greatest invention of the human race.

Reporter: You mean, a greater invention than the wheel, or fire?

Absolutely! You can have a wheel and make a little wheelbarrow for around the house, but money makes it possible to have an industrial economy that produces huge tractors that can move tons more than your little wheelbarrow. And you can have fire and burn some wood in your fireplace, but you can't have central heating, or all the other things we enjoy in an industrial civilization without an effective money. Money makes civilization possible.

Reporter: So aren't you saying you want more money to get more stuff? And doesn't this put you at odds with the Bible?

Actually, I've never earned enough money in any given year to put me over the federal poverty level. But I've enjoyed hospitality in the homes of many wealthy people, and I appreciate what this invention called "money" makes possible. I've been to the dentist several times, and I appreciate high-speed drills and anesthesia. These wouldn't be possible without money. I really love the idea of money.

Reporter: I'm confused. How does this "appreciation" for the "idea" of money make you different from the people condemned in the Bible for their "love of money?"

The people who "love silver" love money for the things they can exchange it for. They are only concerned about things for themselves. If you told them you could give them more things by destroying their money, for example, by taking the silver out of their money, they wouldn't care; they are stupid people who just want more stuff. But if you destroy the money this way (the way governments always do), you destroy the possibility of all this stuff ever coming into existence. You condemn millions of people into poverty.

Reporter: Are you saying that if you don't have a large quantity of money, you can't build a factory to make stuff? That seems like a pretty obvious point.

No, I'm not saying we need more money. What we need is honest money. Years ago, writes James E. McAdoo,

a special kind of advertisement appeared regularly in many magazines. It pictured an attractive, gray-haired couple, attired in sports clothes, and smiling happily. The caption said, in effect, “I retired with $250 a month, for life.” The clear implication was that, with the proper plan for prudence and thrift, the reader could provide for a comfortable lifetime income.

Today these elderly people need more money, but not because they covet more stuff. They need more money just to get food and clothing. It's a very bad situation when people need more money to get the same amount of stuff. When you have honest money, the price of stuff is always going down, and the same amount of money will buy more stuff.

Reporter: I'm lost.

That's my point. Money is the most important invention in the history of the human race, and government schools never explain what money is, or why it's so important. So let's start at the beginning.

Let's say I'm "self-sufficient." I don't need money because I don't do business with anyone else. I grow all my own crops and hammer out my own plows on my own anvil. Many environmentalists want us to be more "self-sufficient," "in harmony with nature." But in reality, people like me -- with no marketable talents -- would live in abysmal poverty if we had to be "self-sufficient." I don't know how to grow crops, butcher cattle, forge steel, build a central air conditioning unit, or drill my own cavities.

Reporter: So money makes it possible for you to buy other people's stuff. More money = more stuff, right?

That's not what I'm getting at.

Suppose I know how to grow wheat, but I want to have a computer. You know how to build computers, but you're on a wheat-free diet. I'm out of luck. Even if you wanted some of my wheat, the computers you make are all worth more than 500 lbs. of my wheat, and you don't want that much wheat. We can't trade. I'm forced to be "self-sufficient." My standard of living goes down.

If there are ten things I want, I don't have time to search around the country for the ten people who have those things and who also want my wheat. Or, if I find ten people who have the things I want, but who want things other than my wheat, I don't have the time to find ten more people who (1) have the things those first ten people want, and who are (2) willing to trade those things for my wheat, so I can trade those things with the ten people who have the things I want. By this time, my wheat has spoiled anyway.

Direct exchange ("barter") will always keep humanity "self-sufficient" and in poverty.

What I need is a medium of exchange, so I can engage in indirect exchange with many other people, and avoid being "self-sufficient." Something I can trade my wheat for -- like silver -- not because I want silver, but because I'm going to trade it for something I do want, with people who accept silver in trade for the goods or services they provide.

If all I wanted were computers, and all the computer-maker wanted was my wheat, I wouldn't need any "money" at all -- the computer-maker and I could make direct exchanges of wheat for computers all day long, never needing any "money." "Love of money" would be irrelevant.

But once we agree that living in "self-sufficiency" isn't as good as living in community with billions of other human beings, where all the labor that needs to be done to create The New Jerusalem is divided up among all the inhabitants, so we each work at what we do best, exchanging the fruits of our labor for the fruits of everyone else in the community, we need money.

Money isn't wealth, or at least that's not why people want it. Money makes exchanges possible. Money makes the division of labor possible.

Reporter: So isn't it a good thing we have the government to create money for us?

Money doesn't require "the government" at all. In fact, governments have always been the group that destroys money. The government is the only group that can make it a curse to have piles and piles of money:

Money is the most marketable commodity, the stuff that can be traded for everyone else's stuff, because everyone accepts the stuff, knowing that everyone else accepts the stuff.

Using gold and silver for exchanging indirectly is consistent with "The Laws of Nature and of Nature's God". Using aluminum electroplated with gold is fraud, a violation of many laws in the Bible about honest money. If the Bible really taught that money is evil, why so many laws protecting its purity and efficiency?

Using a common commodity also enables human beings to create "prices," so that if I need to trade with ten different people to get the stuff I want, I don't have to make ten different calculations about the value of the stuff based on ten different commodities that I'm trading for. Every day, trillions of exchanges are made around the world, and "prices" enable us to decide if an exchange is a good one.

A stable price means calculations can be relied upon into the future. That makes effective planning possible, and an honest price system integrates the plans of billions of individual people, each with individual wants, into a rational economic system.

By messing around with our money, governments always mess around with our prices, and people get cheated. The economic system breaks down, and people are thrust into lower standards of living.

When the government takes complete control of money and the freedom of individuals to trade everything they have for something else (a situation called "socialism"), the price system breaks down completely, economic calculation and planning become impossible, and poverty and death is the result. All those who hate God's laws on money love death.

With so much of our lives dependent upon money, and with the brutal alternative of socialism looming on the horizon, the reader would do well to become acquainted with the importance of money and prices. A good place to start is chapter 5 of George Reisman's wonderful book, Capitalism.

Or, open your Acrobat Reader and browse through the entire book now in pdf and see the wealth of original economic theories and irrefutable logical arguments it offers in defense of economic freedom and laissez-faire capitalism.

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