The language of money

Money is a social construct. There is no eternal, transcendent principle which makes money valuable.

Language is like that, as well. There is no particular reason why the words you're reading right now should mean what they mean to you, other than the force of tradition. English is the language most of us Americans speak to our children as they grow up. It is the language we learn in schools. It is the language by which we not only communicate, but also think.

Money is a language, as well. The incentive to make money drives our economy, and as it does so it sends signals throughout our whole society, to many people who know nothing about one another and have no understanding of each other's plans. Money is a medium of exchange, and as such it is somewhat arbitrary. We don't have to exchange sheets of paper or coins. We once exchanged gold and silver, but that's certainly not the only form of currency, either (at one time tobacco was a common currency in Virginia).

Money is both arbitrary and necessary, just as the English language is both arbitrary and necessary. It thus provokes two equal but opposite responses. One response is to want to get rid of it entirely, to throw off the shackles of arbitrary institutions and live according to a pattern of behavior which we ourselves determine. The other response is to cling tightly to tradition on the belief that whatever is necessary must be preserved in its present form. Both responses are foolish, as it is easy to see when we compare money and language.

Imagine if we gave a Central Grammar Institution (CGI) the power to regulate all words used in the English language. Maybe at times there would be a shortage of metaphors, so the CGI would stimulate the American culture by printing more poetry. Facebook and Google+ would be highly regulated to insure quality grammar, so that communication wouldn't be wasted. And if you began to use dialect or (gasp) a different language while residing in America, you would be fined. If it was determined that your slang was so heavy that it constituted a dialect, you would be fined.

Now imagine a counter-revolutionary movement that wanted to abolish language, because it was "merely a social construct." They would hand out blank tracts (or perhaps sheets of paper covered in modern art). They would have conventions in which no one would speak, but everyone would make whatever kind of noise came to mind (or none at all, if they preferred). Perhaps in America they would simply rebel against English and start speaking other languages, but the purists would object on the grounds that those languages, too, had merely been socially constructed elsewhere, and were also quite arbitrary.

You see the problem. However, it is the former comparison, rather than the latter, that I am more concerned about in the present time. We live in a world dominated by States, in which central banks control the money supply of each country. We do not need a central institution to control our language; why would we need one to control our money? Both are merely social conventions, which can be passed along through natural social forces--through tradition, through free exchange, and even through experimentation.

The irony is that all of this power has coincided with us throwing off the arbitrariness of the gold standard. Unfortunately, rather than creating a political system in which people are free to exchange whatever medium they wish, we have simply cemented the arbitrary power of an institution, the love of which, in the words of Christ, is the root of all evil.