| That's not entirely it. Money is a generic and nigh-universally honored claim on future production. It is the "pay it forward" method of splitting full barter trades into two time-separated half-trades. Instead of giving you a chicken for a bag of milled chicken feed, I can buy the feed for money now, and you can spend that money on a chicken later. Or on something else. It presumes that there will be a chicken to buy later, and that other people won't end up wanting the chicken more than you. In order to accumulate value from individual work, that value has to be rolled into something durable, or it decays and is lost. When labor produces a consumable good or service, the value exists only until the good or service is consumed. Why would anyone work on consumables? Because we live on consumables. We eat; we drink; we drive; we set thermostats; we end-user-license IP. When labor produces a capital improvement, future labor output is multiplied. That's a permanent increase in value, provided that there is some useful purpose for that multiplied labor to work toward. The fisherman can trade fish for a net, or trolling motor, or ice-chest, and thus have more future fish to trade per unit of labor. The stream of consumables is created by labor, multiplied by capital, and then annihilated by consumption shortly thereafter. That value can be stored for some amount of time in stockpiles and warehouses, but then entropy eats some of it, rather than making it to the consumers. Money allows the holder to bid for some fraction of the stream of consumables. Divert a tiny stream toward your personal cup for a fraction of a second, and then drink it. When you hold money, its value is the flow rate of the consumption stream, divided across the quantity of all money. It's not a battery. It's a voucher for a quantity of grid power. As long as the grid operates reliably, it works the same in practice. But if you really want to store the value of your work, you need to buy goods that multiply the consumable output of your work, or stockpile consumables whose values decay more slowly over time than most. So it's not quite that simple, especially when some people start issuing themselves claims on future production when they are not actually producing anything now, or planning on producing anything in the future. |