All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation.
— John Adams, in a letter to Thomas Jefferson
What is the difference between a hobby, a passion, and an obsession? What is it that makes a grown man weep or kill for a waving piece of colored cloth? Why would intelligent people line up in freezing weather for days and weeks, sleeping in tents, just to procure a tiny piece of paper that says they can get a seat at an event where young men in shorts chase and throw a ball around for forty minutes or so (official time)?
Krzyzewskiville, Duke University
The events and the things that they do this for may have small value or meaning in the bigger scheme of things. But they have enormous value because of the energy that we give them. That value comes from the stories we tell about these things, the rarity we believe (or create) about them, and the complexity of the structures and histories that are associated with them.
So it is with money. Money has value only because we believe it does. That belief energizes it. If you tore your dollar bill in half, as I suggested last week, you almost certainly felt the very real energy that money has.
We have seen how, up until not too long ago, money represented real goods — grain, cowrie shells, salt, cattle, and other items of worth. And, until recently, gold. For, although it was largely abandoned during WWII, it was not until 1971 that the gold standard was completely abolished. Until that time, most industrialized nations’ currency was backed up by physical bullion and its notes and coins could be literally exchanged for gold.
But now, money is much more abstract, and is only given value by the government which issues it. Its value is entirely based on faith. As long as enough of us believe in the future value of that money, the system will work.
In other words, just like the energy we give to basketball, flags, and apple pie, money is valuable only because we say so. And the more people that say it is, the more energy it collects from us. And, in turn, the more it becomes what we believe. It is a form of self-fulfilling prophecy.
So what do we believe? What does it reflect about who we are and what we imagine it to be?