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European Tribune - Ascent of Money

The defining property of money is credit assertion. Right from the Babylon times, transferable notes of credit claims were issued - and that is what money is to this day (most of the time). Collecting money means collecting credit claims. The fundamental unit of value appears to be a credit claim or expectation. The significance of precious metals (and real estate) in financial transactions is that usually these are accepted as most reliable collateral, merely.

Even if modern dollar bills are promised to be nothing more but "legal tender", all paper and electronic money originates (more or less exclusively) as credit in this world. ...

There is definite logic in the "money as credit" definition. It appeals to a certain will of cooperation, trust and common expectation of future between a creditor and a borrower. But there are caveats. ...

From Simon Critchley's post Sunday on The New York Times Happy Days Blog, Coin of Praise:

There is a theological core to money based on an act of faith, of belief. One can even speak of a sort of monetary civil religion or currency patriotism. This is particularly evident in attitudes in the U.S. to the dollar, particularly to the sheer material quality of the bill. It can also be found in the U.K.'s opposition to the Euro and to the strange cultural need for money marked with the Queen's head, underwritten by the power of the sovereign, who is also -- lest one forget -- the head of the established church.

Plato defines a "simulacrum" as something that materializes an absence, an image for something that doesn't exist in reality, for example the god Poseidon or Bob the Builder. Such is money, in my view. In the absence of any gold standard (but ask yourself, how real is the value of gold? Is it not simply yellowish metal?), money is only sustained through an act of faith, belief, promise and trust in sovereign power.

To push this a little further, we might say that in the seemingly godless world of global finance capitalism, money is the only thing in which we really must have faith. Money is the one, true God in which we all believe. ...

The West won the world not by the superiority of its ideas or values or religion, but rather by its superiority in applying organized violence.
by marco on Tue Sep 1st, 2009 at 10:24:49 AM EST

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