The Gold Report – Stuart Goldsmith www.stuartgoldsmith.com
9
The Five Functions of Money
1.
It had to be a good
store of value
. A five-hour token shouldn't gradually become worth (say) three hours. After all, you put the five hours in, you deserve to get the five hours paid back to you. Furthermore, your five hour token shouldn't rot away, or corrode, or break. For this reason (and a few others) cabbages make lousy money.
2.
It had to be
freely exchangeable
. If I give you my five hour token, you must be prepared to accept it, and do five hours work for me. I don't mean you
have
to, but you must at least recognise it as a valid token.
3.
It must be
freely transportable
. No point in having fifty foot oak logs as your basic currency, sub-divided into one hundred six-inch-thick wagon wheels, which you couldn't spend anyway because (as Douglas Adams would say) the shops in those days didn't take fiddling small change.
4.
I think it should offer
privacy
. Nobody has the right to examine your affairs, to come barging in and demand to see how much wealth you have, to confiscate it, steal it or render it worthless.
5.
Finally, it must be
hard to forge
. In practice, this means it must be rare or hard to make/copy. Those cute ancestors of ours soon realised that if stones were used for currency, you didn't actually have to work the five hours. You could squander your time spearing a few bison, swimming in the lake and taking in the sunset before tooling-off home and scooping a pocket full of money from the gravel drive right outside your hut... The cads! As if anyone would. These were, and
still should be
the essential characteristics of money. The rest is history. They tried a few things, cowrie shells (too much wave noise), beads (too round - kept rolling under floorboards, getting stuck up small children's noses etc.) copper coins with Nero's head on (anyone with a hammer and a bit of nonce could knock out a dozen before tea time). Until... finally they hit on... gold.
Let's see if this 'gold' stuff fits the bill...