{"id":11891,"date":"2015-09-06T07:53:30","date_gmt":"2015-09-06T12:53:30","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11891"},"modified":"2015-09-06T07:53:30","modified_gmt":"2015-09-06T12:53:30","slug":"the-concept-of-money-and-the-money-illusion","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11891","title":{"rendered":"The Concept Of Money And The Money Illusion"},"content":{"rendered":"<header class=\"entry-header\">\n<h3 class=\"entry-title\"><a href=\"https:\/\/www.bullionstar.com\/blogs\/koos-jansen\/the-concept-of-money-and-the-money-illusion\/\" target=\"_blank\">The Concept Of Money And The Money Illusion<\/a><\/h3>\n<\/header>\n<div class=\"content-middle-area-full\">\n<div class=\"entry-content\">Awareness about the concept of money is making a comeback. Gone are the decades in which the global citizenry was fooled to leave this subject to economists, governments and banks \u2013 a setup that has proven to end in disaster. The crisis in 2008 has spawned debate about what money is, where it comes from and where it should come from. These developments inspired me to write a post on the concept of money and the money illusion. (All examples in this post are simplified.)<strong>\u00a0<\/strong><strong>The Concept Of Money<\/strong><\/p>\n<p><em>Money is a collective human invention<\/em>First, let us have a look at the fundamentals of money. How did Money evolve? Thousand and thousands of years ago before any trade occurred\u00a0<a href=\"https:\/\/en.wikipedia.org\/wiki\/Homo_sapiens\">homo sapiens<\/a>\u00a0use to be self-sufficient; families or small communities grew that their own crops, fished the seas, raised cattle and made their own tools.When barter emerged the necessity to be self-sufficient ceased to exist. A farmer\u00a0that grew tomatoes and carrots could exchange some of his production output for bananas or oranges if he wished to do so. There was no necessity for the farmer to grow all crops he wished to consume, when there was an option to trade.Farmers participating in a barter economy were incentivized to specialize in production, because they could escalate their wealth (gain more\u00a0<em>goods<\/em>) by producing fewer crops on a greater scale. Through trade increased\u00a0<em>productivity<\/em>\u00a0(efficiency of production) could be converted into wealth, as the more efficient commodities were produced, the higher the exchange value of the labor put in to produce them. Consequently, barter economized production among its participants.<\/p>\n<blockquote><p>By exchanging, human beings discovered \u2018the division of labor\u2019, the specialization of efforts and talents for mutual gain\u2026 Exchange is to cultural evolution as sex is to biological evolution.<em>\u00a0\u00a0 \u00a0<\/em><\/p><\/blockquote>\n<p><em>From\u00a0<a href=\"http:\/\/www.rationaloptimist.com\/\">Matt Ridley<\/a>.<\/em><\/div>\n<\/div>\n<div class=\"entry-content\">\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Concept Of Money And The Money Illusion Awareness about the concept of money is making a comeback. Gone are the decades in which the global citizenry was fooled to leave this subject to economists, governments and banks \u2013 a setup that has proven to end in disaster. The crisis in 2008 has spawned debate [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[63,1582,8726,3677,309,312,536,8727,805],"class_list":["post-11891","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-barter","tag-bullionstar-com","tag-exchange","tag-fiat-currency","tag-financial-crisis","tag-money","tag-money-illusion","tag-trade"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11891","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11891"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11891\/revisions"}],"predecessor-version":[{"id":11892,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11891\/revisions\/11892"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}