What is good about money?

Fragment of a discussion from Talk:Money
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Morbius continues (private):

Calling on Wm. Stanley Jevons's properties of money:

  1. Inherent utility and value (an error IMO)
  2. Portability
  3. Indestructibility
  4. Homogeneity (addressed above)
  5. Divisibility
  6. Stability of value (addressed above)
  7. Cognizability


Jevons sees money as requiring an inherent value or utility. He was used to thinking of coin and bullion, though banknotes were starting to be widely established. My view is that this is actually a manifestation of trust in the exchange medium. Underlying value helps create a trust-value floor, though institutional trust (as in the Federal Reserve or European Central Bank) can do likewise. A false lead, but still a useful one.

Portability means that you can carry (or exchange) money with yourself or between others. Non-portable assets, say, real estate or your own inalienable characteristics (those which cannot be separated from you), are either fixed in place or cannot be transferred to another. Money most be at least notionally transferable, and often physically transferable. Conveniently if at all possible.

Indestructibility means that money is durable. Roses or morning dew make a poor choice of currency -- they decay or vanish too quickly. You want something that will endure.

Homogeneity is the property of all units having equivalent worth. Fine art or wines have value but that varies greatly from item to item. Grains of wheat, heads of cattle, or 1€ coins all have equal value (at least within a given grading regime).

Divisibility means that you can divide (or aggregate) units conveniently without affecting the overall value. Half a cow is less valuable than a whole one, half a teapot is less valuable than a whole one. See Solomon and the child....

Stability of value means that prices remain reasonably constant (in aggregate, relative to currency) over time.

Cognizability means that money is inherently recognizable and provable as money. You don't have to go through some complex set of tests or trials to determine worth, type, etc. Numerous digital currency proposals fail markedly under this requirement.

Woozle (talk)00:19, 19 July 2020