Total Pageviews

Tuesday, 17 March 2015

Belief systems - Money

For most people, money is quite essential in daily life. Yet during my research I didn't notice anyone regarding it to be a part of "belief systems". You wonder why given the following expressions:
- "For the love of money is a root of all kinds of evil." (New Testament, 1 Timothy 6:10a)
- Greed is one of the Christian capital sins (i.e., envy, gluttony, greed, lust, pride, sloth, wrath).

There is nothing wrong with money. It has been an excellent invention for prosperity. Before money was invented, people used the barter system which involves an exchange of goods or services as a means of payment. In fact the barter system still exist nowadays, sometimes without even realising it.

Coins used to be made of precious metals (e.g., gold, silver) and the value of the coin was more or less equal to the value of the metal. That is why people believed in coins as a payment method. Coins are also no longer made of precious metals since the underlying value of the metal was exceeding the value of the coin. It became more interesting melting the coins than using them. The introduction of paper bank notes was not easy. The solution was to include a written promise on the paper bank note that people could always exchange the paper bank note for its value in gold. Consequently, central banks stored huge amounts of gold in vaults. In most (if not all) countries the written promise on the paper bank notes has been deleted at present.

Nowadays the use of paper bank notes and metal coins has been largely replaced by digital or electronic money. That fundamental change required a fundamental belief in financial institutions. The guarantee of a substantial part of our savings at banks (NL: 100,000 euros) by governments (e.g., Europe and USA) has everything to do with the necessity of people believing in banks and in electronic money. People who lack that belief typically store cash at home "under a mattress".

While most people believe in money as just a tool for doing payments, some people believe in money as a goal in life. These people develop a love for money. Greed is the excessive love for money: