A penny for their thoughts

PUBLISHED : Monday, 27 February, 2012, 12:00am
UPDATED : Monday, 27 February, 2012, 12:00am


At its most basic level, money is the means to buy things, or the payment received in exchange for goods and services. But money is also highly conceptual.

A country's currency is no longer backed by gold held by its central bank. Instead, its value relies on a combination of government legislation, the economy it represents and trust - a concept known as fiat money.

Meanwhile, the value of money fluctuates constantly. It can be printed by the boatload. Money supply is manipulated constantly, sometimes massively.

But for all its flighty, ephemeral qualities, money wields some pretty potent symbolism, which is remarkable, given that it is just paper backed by a massive collective act of faith.

So, what is it? Money Post asked several people for their views, to see what they projected onto this deeply abstract concept.

The economist

Stephen Chiu Yiu-wah, associate professor of the faculty of business and economics at The University of Hong Kong, sees money as a tool for progress. For him it is the mechanism by which society has been able to develop from a system of bartering to one of more sophisticated trading.

He says money acts as a unit of account and a store of value, but its most important function is as a medium of exchange. Without money, all economic transactions would have to be in the form of barter,' he says.

But he warns that this is 'highly inefficient'.

He adds that, historically, a wide variety of objects have been used as money, ranging from gold and silver coins, to shells and beads, but today money can be 'virtually intangible'.

The Marxist

Vincent Kolo - a representative of Socialist Action, a left-wing political group - sees money as a measure of the labour of others and a form of oppression.

'Money is a measurement of value and wealth, created by labour,' he says. 'Those who have a lot of money control the wealth produced by others' labour. There is no such thing as a 'self-made' billionaire.'

He points out that although more money exists today than ever before, the gap between the wealthy and the poor has never been wider.

He adds that, given the current economic turmoil, it is no surprise that Karl Marx's ideas of replacing capitalism with a socialist society, in which money loses its 'magical power', are enjoying a resurgence.

The gold bug

Tom Paterson, chief economist at gold bullion dealer GoldMade-Simple.com, says that at its most basic level, money is basically just a commodity.

But it is a commodity in which he does not have much faith.

'These days, central banks apparently create money out of thin air,' he says.

'They print bank notes and then, through the authority of the government, force people to use them for their transactions. This is wrong.

'Painful experience has shown that whenever states rely on paper money that isn't backed by a real commodity, things can go spectacularly wrong.'

Paterson says truly free people in a free market would be able to choose what money they used. 'Several thousand years of history suggest that, when given the choice, most people pick an inherently valuable commodity like gold or silver,' he says.

The artist

Hong Kong animation artist Pam Hung Man-ting sees money as a complication of modern life, and she thinks we would be better off without it.

She says: 'Money is just a tool. I visited some villages in Hualien county in Taiwan last year, and people there do not have much income - they eat simple food and live simply - but they have a life.

'Back in the 1970s and '80s, my mother worked as a sewing lady in a factory. She earned a few bucks for each purse she sewed. Things could be as simple as that, and it's a Utopia that most people long for, I guess.'

The tai tai

For this spender, who asked to remain anonymous, money is meaningless, simply a way of getting what she wants.

'If I want something, I buy it. If I don't have the cash, I use my credit card,' she says. 'The bill doesn't scare me. To me money is meaningless. It is just numbers on a page.'