Money Conversion

Patrick Quanten

The concept of money as a "valuation" of goods and services within a population is not such a crazy idea. The great variety of available goods and services that one might need and has to, in some way, acquire invites a way of comparing the value of those things. Acquiring something can be done in two different ways, either one takes it away from somebody or something else, or one exchanges something for it, in which case the “value” of what you acquire needs to be established.

Simply taking whatever one requires is not a problem when we can be sure that we are stronger, more powerful, than the owner. This is certainly the case when we talk about human beings acquiring something a plant has or something we want from an animal. It is relatively easy for us to take whatever we want. We use the same method when we deal with powerless groups of human beings. As a government, we can simply steal part of their income. We can even acquire their land if we want to. In many respects you could argue the government actually owns the land and everything on it anyway. If I own it, then it is already mine and I am only taking what is mine. Hence, compensation or an exchange is not really necessary. I, as the owner, allow you to be here, on my property, and I allow you the use of the products of my land. That in itself is more than enough exchange for what I am taking from you, when I decide I need it. A perfectly reasonable attitude, don’t you think?

Nature, in contrast, is not owned by any creature that lives in it. Nature produces food and living conditions to serve everything that lives on its land. It does not require anything in return for what you take from it. Or so it seems! Because ultimately it does want something from the living creatures and that is the dead material after life has expired. Nature uses the leftovers to create new. It gives for free because the system sustains itself through a massive and effective recycling programme. Nothing gets lost, so nature is not afraid of losing something when it gives. Allowing others to use what it has does not devalue the whole. Nothing is missing!

On the other hand, humans grow up with the idea that if you give something away you no longer have it and therefore you have lost something. You have become poorer as a result. We struggle with the concept of interest free loans. We have lost sight of a much bigger picture, one that science has proven. No energy can be lost; no new energy can be found. The only thing that exists is an exchange of energy but the total available energy always remains the same. And since all matter is nothing more than energy, nothing can be lost. It will always be exchanged, even if we believe it has been lost. When we see matter gathering in one place, it is “missing” in another place. It simply has been moved. Hence, we feel that when we give something to someone we want something in return, although in reality you haven't lost anything when you give.

Starting from this short-sighted and anxious point of view of loss, the question arises how to value the exchange. It now stands to reason that what you give should be seen to have an equal value compared with what you receive. If it isn't of equal value, it means you still have lost something, have been short-changed, or the other person has been done wrong, has been conned. This means that everything in life now should be valued and the named value should be generally accepted as "the going rate".

It may already be obvious that it is impossible to come to a value consensus between all members of the entire population. We already know that when a region has plenty of something the value of the product diminishes compared to a region where there is scarcity for that product. Also, the demand for a product drives up its value. So, there will never be a consensus. The solution is that an authority decides on the value and imposes its decision on the entire population. Hence, we need a central power to control the value of goods and services.

Another problem is the fact that in the population an exchange may take place whereby both giver and receiver are happy with the exchange. How can that be a problem? Well, if today I offer you my time and skills and I receive a bag of potatoes for it and tomorrow I do the same for someone else and I receive a gold watch for my services, it highlights the problem of validation of the sack of potatoes against the gold watch for the same work. Do these have the same value?

The question is this: Is it important to match them? That depends on what you value the most. For instance, I might begin to think that if someone is willing to validate my work as being worth a gold watch then I want everybody to validate it as that. From that moment on I will not work for anyone, under no circumstances, for a sack of potatoes anymore. On the other hand, I could approach this with an attitude of adaptability. One day, one set of circumstances, I am willing to work for a sack of potatoes and another day, another set of circumstances, I will only work for a gold watch. The outside world as well as myself are validating my work in different ways when it is carried out under different circumstances. If and when we are willing to exchange and determine between us that the exchange is fair then the value of that exchange is directly linked to the time and place of the exchange and the value cannot and must not be projected into a different space-time continuum and be generalised. I am always well paid for the work I am doing.

If we choose to let the value of something be determined by a lot of variables, such as the giver, the taker, the time, the place, maybe even the weather or the light, then there is no need for an authority to overlook the interaction. In antiques and art we are quite happy to let that happen. You may have been told your old piece of furniture is worth five thousand pounds, but if people are only willing to give you five hundred pounds for it, then at that moment in time, right there and then, it is only worth five hundred. Take it or leave it.

But when there is no "right" price for goods or services, when there is no consensus needed, and all kinds of exchanges are possible, only depending on giver and taker, then no authority has any power over the transaction. No government then has a role to play in this transaction. It doesn't need to set the price and there is no need for a common exchange property, such as money.

However, when it is decided that goods and services should all have a specific comparable value then we require a common good through which we will translate the value of everything. This can be a material thing such as a bar of gold. The exchange now looks slightly different in that somebody is offering something and gets in return a piece of gold. This requires the taker to actually have that piece of gold on his person at the time of the exchange. When all exchanges throughout the day require gold pieces to be handed around we need to literally carry a heavy load. We can do it differently. We could value the bar of gold and print pieces of paper which carry a mark of a that value. That way everything is still valued against a bar of gold but we only have to carry on our person a piece of paper which has been given the equivalent value. My pockets are a lot lighter now. After some time, people loose the connection between the value on the paper and the bar of gold and they begin to relate to the piece of paper as having value in its own right. Now the exchanges look like this. I offer you something and I get in return a piece of paper. Later on in human evolution I may even consider the fact that we no longer need the piece of paper and that the exchange now happens between something offered and a number on a computer screen representing a bank account. Money, the piece of paper, rapidly becomes virtual, whether it is that number on the screen or it is a stag of crypto coins on the screen. The exchange has become one of giving a reality, goods or services, and receiving a virtuality, money transfer or virtual money. This is being called evolution but to me it looks like a con-trick. At first, I was in a position to directly evaluate what I was getting back in real terms, where now I am handing over something real, an action or some material goods, and I get nothing back except the promise of an equal value.

You may not feel the difference between having the gold in your pocket, or the money that represents the gold or the number on your computer screen that represents the money. But there definitely is a difference. First there is the difference between the material reality and the virtual reality: one has real properties, the other doesn't really exist. But, I hear you say, the figure on my bank account represents money and will be converted back into real money whenever I want it to. Incorrect. When the people of Cyprus and the people of Greece wanted their money the banks closed, the cash dispensing machines were out of order, or rather out of money. Why? Because there wasn't the money to turn the virtual figures into reality.

The second difference is even more important. It is the difference between buying something with money that is in your pocket and being able to buy it without having to know whether you have the money. You are being removed from the value of things by no longer experiencing the cost to your budget. Currently I can purchase something with a plastic card, which represents my financial status, without having to pay anything. At the end of the month the bank removes the money I have already spend from the figure on my account. I lose my awareness about the value exchange between what I buy and what I am receiving for it. I also lose the oversight of the total of money I am spending, as some of it will only be shown to me much later. Utility bills tell me how much I have used and consequently how much I need to pay. However, whilst I was using electricity, water, gas, I was not aware of how much it was going to cost me and I was not in a position to know if I could afford the purchase. That way I no longer directly feel my pocket getting lighter. I lose the ability to sense the real value of the virtual environment the exchange takes place in. I no longer know what the figure on the computer screen is worth, what it can buy me, and whether I can afford to buy it.

I think I know that the money taken in exchange for the goods or services I received is fair. However, even when it isn't, it is too late for me to do anything about it. The more virtual the exchanges become the more I lose sight of the value. This is demonstrated quite easily by purchasing something over the internet, which in itself is a virtual world where reality can easily become obscured. When I see a picture on the internet of a car for sale and I transfer the deposit to ensure the car won't be sold to anyone else because I really really want it, it is possible that two days later I receive the picture of the car in my letterbox and it turns out I have simply bought the picture, not the real car. It becomes more and more difficult to remain aware of what the exchange actually is about. This is also true for everything that is included in the price. Do you truthfully know, every time you make a purchase, what is included in the price of the product? Start to think about everything that needs to be covered by that one price. The cost of the product? VAT on the product? Rent of the shop premises? Salary of the sales person? Salary of the lorry driver who delivered the product to the shop? Petrol money for the lorry? Utility bills from the shop? Shop insurance policies? Just carry on, I am sure you can make a very long list of possibilities. All I am saying is that we have been far removed from two people agreeing on the value of goods or services and exchanging those right there and then.

We mentioned that by introducing a common value system to all exchanges we have given the power to make those decisions to a separate authority. This authority, independent of the people exchanging things, makes all decisions in respect of value. It is this authority that controls how you experience the exchange and how close or removed it becomes. By giving a value to something that in itself is valueless, such as a piece of paper or a figure on a screen, they take away the power of the individual to decide whether something is worth the exchange or not. You still live the illusion that you can decide something is too expensive for you to buy, but because everything is valued via this virtual system you have just lost control over your own valuation and what you can and can’t afford.

You believe that you know what the buying power is of the figure on your bank account. You are mistaken. You believe that you have enough money to buy a cup of coffee but the authority decides, without your knowledge or consent, that tomorrow everything will become 100x more expensive. Now you are in effect the equivalent of 99 cups short. It lies within the power of the authority to decide what the real exchange value is of the stuff, for instance money, they have placed in between the exchange itself. When you do a direct exchange - I work for you and I get a sack of potatoes - I actually know the reality of what I am getting in return. When I work for you and you give me enough money to buy a sack of potatoes then it may turn out that by the time I am buying the potatoes I am short. You may feel that this is not really an issue within your everyday life but think again.

Don't be blinded by regular discounts offered. Instead keep an eye on your pocket and the buying value of what is in it. The buying power of the citizen has dramatically fallen over the last thirty years. How is that possible when people earn so much more than thirty years ago? You pay tax to the government out of your salary every month. At the end of the year they calculate exactly what you have earned in that year and they adjust the figure. You may be entitled to a refund. During the course of the following year you receive that money, whilst at the beginning of that same year all prices have been adjusted upwards as a result of the index adjustment. You have just lost 2% in buying power of last year’s money that you are only able to spend this year. Although the figures on the screen are all correct, what they are worth has changed. On top of that, people experience price increases on all sorts of products and services every year in the region of 10% (check your utility bills) whilst their salaries rise not at all or in the best scenario by 1 to 1.5%. You lose buying power whilst the figures are all correct. Price increases and salaries are set by the authority that determines the value of the money we use in our exchanges.

Have a think about the reality of the index. They tell us that every year the price of products is increasing. However, on our behalf they are keeping an eye on those price increases and they assure us that we will be given an equal increase in pay. Who puts up the prices in the first place? They tell us it is a natural phenomenon. Really? We have already seen that when there are lots of the same products available, like tomatoes or apples, the price decreases. That is a natural phenomenon! But apparently prices go up every year. Luckily for us, they compensate us for that increase by increasing our salaries by exactly the same figure, the index. If that were effectively the case then that would be a nil-operation! It would be pointless. So there would be no need to increase the prices because nothing is gained, by nobody. However, this exercise is repeated every year. Not because nobody gains, but just because there is much to be gained. Every year you lose buying power and every ear you will have to work harder, give more, in order to survive. When you are losing buying power, somewhere it is gained, according to universal law. Nowadays both working parents are likely not to be able to make ends meet whilst sixty years ago my father was the only one in the family with an income, on which he raised two children, became the owner of a house and had more than enough money to last to the end of his life.

Authorities have the power to lower the value of the intermediate product, money, too. In fact they control everything about that, which also includes the power to decide that tomorrow the same cup of coffee only costs you half the figure you have on that piece of paper. You can get two for the price of one! The devaluation of goods and services never happens. Why? Because economy is all about increasing figures, not decreasing figures. The point here is that the individual has lost control over the value of the exchange and has been forced into losing value for his goods or services.

When in a certain set of circumstances two people agree on an exchange of real things they will both be happy and they can control and oversee exactly what is being exchanged right here, right now. The fact that maybe in a different set of circumstances I won't be able to get the same thing in return is irrelevant. It is irrelevant to me and it is irrelevant to the rest of the community. The only relevance of the value lies in the moment between the two people executing the exchange. It is perfectly acceptable that no two moments, no two sets of circumstances, are the same. Today my wife gives me a kiss simply because I look at her. Tomorrow I will have to do the dishes before I am entitled to a kiss. Is there something unfair about this? Has somebody been done wrong? I don't think so. We are both present at the exchange and accept it. If in the long run I don't like having to do the dishes before I receive a kiss, I am free to alter the previous agreement. In direct exchanges there is no real value in precedent. It may be a guide but it has no real contractual value.

People decide what something is worth at every moment. When I have worked for a sack of potatoes before, I may decide that right now I don't need a sack of potatoes and therefore I won't do the work. There is no obligation either side. The individual has the freedom of choice.

Allowing unification and equalisation in the transactions shifts that decision power away from the individual towards an outside authority. This is the beginning of an ever increasing problem for the individual as they no longer control the value of the exchanges they make. They no longer can evaluate what they are receiving in return of their contribution. They will be forced to hand over more in order to receive less as the authority increases the value of what people need all the time.

To all intents and purposes, creating a diversion on a direct road between two points gets one lost.

In the system we know so well, an authority, far removed from the lives of everyday people and their immediate needs, decides on the value of those needs. By taking back their power and bypassing the intermediate valuation system people can make exchanges directly, which allows them to relate it directly to the needs of both partners in the exchange. A win-win situation to both, rather than a win situation to the controlling force.

Furthermore, a direct exchange will encourage each individual to search for and display his or her talents as they are required to use them for trading. It will value each person, both from within the person and from the outside world, and bring them joy in life.

No living community will be entirely self-sufficient until it manages to properly value the principle of giving instead of that of taking. You only need your needs met. You don’t need anything more. And you have the skills and know-how to do it.

You have what you need. You can give others what they need. And nobody else should tell you what it is worth or what more you can exchange it for. There is nothing more than the pleasure of helping a fellow human being.

Self-Empowerment is you having the power to decide what you need back for what you give. It is about needs and sharing. And that doesn’t really involve any money at all.


Design & hosting by DV Webdesign.