Yes, Congress has the sole power to create coinage and emit bills of credit, right there in the constitution under section 5. Tell me, do you know what a bill of credit is? Printed paper money. Pull a one dollar bill ut from your pocket and read what it says on top over Washington's head. Federal Reserve Note. At one time the treasury, the executive department created by congress was given the power to mint coinage and bills of credit. At one time the treasury policy was to keep a reserve of gold and or of silver to back the issuance of bills of credit. Can you guess why? Coinage has a real value that is relative to the content of precious metals they contain and their value reflect those prices of the precious metals in the open market. But what value does a piece of paper contain? In 1974 we went off the gold standard. Prior to that event one would see that dollar bills were silver certificates, redeamable in silver. Currently our bills of credit are, along with most of the owrld's currencies, fiat money. Any idea what fiat means, and I am not speaking of a Italian automobile. It is money that has a declared value with no tangible assets other than the full faith and credit of the country who issues it. Fiat money is the issuance of debt, not credit. In a country that is experiencing hyper inflation the relative price of goods and services are not rapidly rising, the percieved worth or value of the currency is rapidly falling. The citizens have lost confidence in the value of the currency and will spend it as quickly as they can for tangible goods that can be bartered for other tangible goods. In Wiemar Germany, the country's economy was broken, WWI had exhausted industry and agriculture and the government had limited revenues from taxes and the like. To pay its bills the German government started to issue more currency without the backing of gold (it was on the gold standard at the time). Work was scarce, unemployment was high, trade with other countries was nil, production of goods and services was low, and agricultural production was low. When a country's economy is in a depression it can't spend its way out of the depression on its way to prosperity. FDR tried that n the 1930s and his programs only prolonged the depression that started in 1929. Germany tried to borrow its way out of debt by printing more currency and that policy actually destroyed the faith of its citizens in the value of its currency.

Your ideas of what in the meaning of wealth, money, economic transactions and the like are, to put it gently, wrong. You have a moral bias, that much is obvious. You really lack much in the way of knowledge of economics. Don't feel bad or indignant, many individuals who cal themselves economists have political bias that colors their thinking, their knowledge, and their assumption on how the world should be. Adam Smith, who wrote The Wealth of Nations, was a professor of Moral Philosophy (God based moral philosophy) and his observations of economic activity were biased in that manner. Those observations were not therefore worthless, quite the contrary, they provided a framework for understanding economic activity as human behavior, something most modern schools of economic theory fail to understand. It is almost humorous that we now have economists reexaming economic theory as a behavioral model, albeit secular in nature.

But more to the point, your opinions and assertions are based on a little knowledge and quite a bit of belief while my opinions and assertions are based on a large body of knowledge and a little bit of belief. Thus we differ and I shall leave it at that.

@Marta-Amance Interesting. You are the one who brought up morality when you asked if we were basing our practices on right principles! I asked how you defined "right", to which I received no answer. Your assumption of intelligence belies your ego. If you were wrong, would you want anyone to tell you, was also a question you did not care to answer. If you want to remain in your ignorance and your deceived state, what is that to me?

Methinks you do not understand the purpose of money. Don't feel bad, nor indignant. Many have been deceived by the very system you purport to champion. The duped leading the duped. That is what concerns me. People like you are dangerous, because they pretend to know what they are talking about as they lead other unsuspecting 'students' into the dark.

I am sorry. I do not usually assume such bluntness, but decided to try to use it on you to see if there is any hope for you at the present time. I would be happy to discuss these issues with you if I had any inclination that it would not be a waste of time.

@Marta-Amance you wrote: "At one time the treasury policy was to keep a reserve of gold and or of silver to back the issuance of bills of credit. Can you guess why? Coinage has a real value that is relative to the content of precious metals they contain and their value reflect those prices of the precious metals in the open market. But what value does a piece of paper contain?"

Trade began before money was invented. As a trade convenience, money was invented so that people didn't have to find a willing partner in trade, who wanted their stuff. Money, in those ancient days, did have inherent value. But its value rose or fell as the commodity itself's value rose or fell according to supply and demand. A standard of measure of value then, had no standard. Money should merely represent value, as long as its value is honored wherever in an economy it is used.

Certainly money, to be believed, or to have faith in, had to be "Backed" by something of value. To be used as a trade convenience, it needs to be backed by the wealth it represents. Money does not only represent the value of gold, nor does it only need to be backed by redeemable gold. That did not work as the economy enlarged. Gold used to be $32 an ounce. Then all of a sudden, someone said it was worth $64 an ounce. Now, it is over $1300. The scheme, then would be to obtain control of, or ownership of all the gold and then one would be "King", making the rules.

Wealth comes in many forms, and all these forms of wealth back legitimate money. This ensures that no one can be King and make rules that are unfair and unjust. More if you want, later.

@dmatic Here I am, debating with someone who knows all while I know nothing. Ok, you win. Be happy and go in peace.

@Marta-Amance Maybe we're mirroring each other. I know I have a lot of work to do. Though I wouldn't call what we just had a debate. By the way, I didn't say you know nothing. Nor did I say that I knew everything. Sorry I came across that way. Maybe neither one of us is teachable. Sad.

@dmatic Kid, I am 72 years of age and had my first course in economics in 1967. Since that time I have had many courses in the subject and read several dozen books on the subject along with many other subjects. So yes, I know one hell of a lot more on the subject that you and have far more experience in this world than you. It makes a difference. Have I ever held wrog opinions of this or any other subject? Yes, quite a few wrong opinions, but knowledge is acquired in fits and starts and is never perfect. Experience, new information, deep thinking allow one to refine ones knowledge and opinions. No, we are not mirrowing each other, you have not the knowledge and experience to do that. Have you read much in the way of economic literature? No, that is very easy to tell. You hold a good many dogmatic assertions that will not stand the light of reality. But you are young and you have the time to learn if that is your desire. At my age I still read dozens of books every year on a wide range of subjects. I teach myself something new all the time and I bother to question what I read, hear, and see.

Now what should matter to you is whether you start questioning what you think you know, whether you can take the knowledge you have acquired and think it through, discover any flaws in it, figure how it should be corrected. You need not go through a formal logical analysis of it, very few individuals are capable of such processes. On the other hand, if all you want is the superficial acquisition of knowledge on a shallow depth, then your assertions and your answers will reflect such a behavior. It takes little thought to spout platitudes, facts, and data points as so many individuals do and then call themselves educated. But thinking, to truly think takes more effort and discipline than most can muster. So the choice is yours, what will you make of your life is of little interest to me but it should be of great interest to yourself.

@Marta-Amance Thanks. Some good advice. May I ask you a question pertaining to the subject? Do you think money needs to have inherent value, like a commodity? Or can money serve its purpose as a trade convenience without having inherent value?

@dmatic Money is a commodidity because it is a store of value. It is the medium of trade or exchange because it represents value rather than simple convenience. Understand that the vaule is a relative relationship, not an absolute. You can think of value in economics as subject to supply and demand functions with a price point. This is different from the idea of value in the realm of intellectual thought. What we may hold dear in the value of love or hate has little relationship to the value of money. Then there is the difference in personal values where some seek money for money's sake, an end in itself when compared to those who seek money as a means to production. Of course we must consider the case of those who seek money as a means to power, for such stores of value are a source of power, usually personal power, the power to command the acquistion of goods and services. But here, power, be it personal, economic, or political (actually political economy is the better term for the two) follows a supply and demand curve. It may be strange to think of power in this manner but in a modern society it is the norm. In primitive societies, where dictatorships are the norm, coercion is the currency, that threat of harm or death. In such societies, the widespread poor have no thought of maney as being a convenience, for they have so little in relation to the ruling elites.

Such reasoning as shown above is why so many books on academic subjects are so dense to read. John Locke never gave simple or simplistic answers to the questions of his age. I offer a string of assertions so that you may examine each and decide for yourself what is true or not. This is the approack I have developed over the many decades of both formal and self education. It is a type of Socratic method. We ask not how things should be but how things are in themselves. From there we begin to state our assumptions and give our reasons in order to arrive at some truth. I hope this helps.

@Marta-Amance I will key on this sentence you wrote in answer to my question: " It is the medium of trade or exchange because it represents value rather than simple convenience."

I agree! Money represents value. It does not have to "be" the value if its effect is representing what is truly valuable, namely, the goods and services, the wealth, in an economy. Therefore, a "fiat" money system is OK, because the money within it does represent the values that money is used to buy.

So, let's continue: Why is our money system in the U.S. not just? What could be done to change the unjust system to a just system? To make the perfectly fine fiat system just again?

@dmatic Back up a minute. you made a gross mistake in logic in that second paragraph. Money has value in a social system that uses money but it is not the value of all. The value money has is in its use for the exchange of goods and services in the market place. Value is a measure and money is a specialized commodity. Money exists because it facilitates the exchange of goods and services. We can fractionalize money, denominate it into units of value. An apple is worth a dime and a dime has the value of five pennies. We normally do not trade in fractionalized pennies because that is the smaller physical coin we have and the lowest unit of value. Now in a computerized world fractios of a penny exist but that is another story.

All money systems work on the confidence individuals and groups have in the system. That is, are these units of value true. Is a dollar's value really one hundred pennies or only twentyfive of them? Another way to understand the value of money is its purchasing power. What will my dollar buy, one apple, a Big Mac (there was a time when you could have bought a Big Mac, fries, and a small drink for ninetyeight cents), a haircut, and so on. Money as a medium of exchange has another function and that is price stability. If the value of your currency is rapidly and erraticly changing the your currency is not stable. Well, what would tell you that? The price of goods and services rapidly changing to match each erratic move in value. Ah, but who determies the value of that medium of exchange? The marketplace where goods and services are exchanged. If a dollar were worth an ounce o gold and we had a trillion trillion ounces of gold then we could print as many dollars as ounces of gold we held. We consider gold to be a precious commodidty becasue it is scarce in nature and takes a fair amount of effort to extract it from the ground. But more that scarce value, it has an intrinsic value that is non monitary. It's shiney and works easily into jewelry and other forms of adornment, it works very well in applications of electronics, and so on. But let us say that a wicked witch comes along and transmutes all those good values into lead. Ah, now we seek lead and aoid gold. And since we based our confidence of our currency in gold, our currency loses its value because gold has lost its value. Now we could all agree that it is no problem, we'll just act like our currency has value by common consent. Our government has done this for us and we now have fiat money that is accepted around the world where our Master Card and Visa are accepted. As long as everyone has confidence in our money system our banks work along with the market place. But remember what I said about hyper inflation? When we lose confidence in our money system banks fail and we return to a system of barter because the market place never fails.

Why is our money system not just? Please define just, just money, and explain why our money needs to be just? Think about this very carefully. At what time does money ever acquire a sense of morality? Why not ask if it is hateful or ashamed of its own value. Emotion will not buy you a cup of coffee in the local cafe, but money will. Money is amoral, meaning lacking the capacity to be either moral or immoral. It is an inaminate object and can not make decisions based on any moral pretext. Our penny make have Lincoln's likeness on it but it does not hae any part of his soul.

@Marta-Amance Agree that money, as a trade convenience, has value to a society! It's use allows someone to carry a bushel of corn in his pocket when going to the market place. And yes, I think I understand "Purchasing Power"....which leads to the discussion of a just monetary system.

Just has to do with fairness, or rightness, as opposed to unfair or wrong. To 'devalue' the purchasing power of the units of currency or coinage through inflation, for example, does show the instability of the system. And, of course you are right about everybody's confidence in the system. It works as long as people have confidence in it. If the purchasing power falters, so will people's confidence and they will look for other ways to buy stuff....bartering for example.

In a just system, the money is like a yardstick, it measures value. The length of an inch does not change, but the thing being measured does. The values of the things money measures may change but the standard of measure does not.

Maybe if we just talked about inflation, we could get a better understanding. I agree with you about an inanimate object being neither moral or immoral, of course. It is the love of money that is the root of all evil, not the money itself. Therefore, let me ask you a question. What is the cause of inflation, or in other words, what infects the purchasing power of 'money'?

@dmatic The question of what is just and fair doesn't belong in questions of economics, why? Individual variation is the answer. What you may define as just and fair may not match my definition or the definitions of other individuals. These are problems of morality, which usually entails a judgement from god, and the use of emotion. That individuals may base their economc transactions partly on these elements does not negate that economic transactions are dependent more on the wants, desires, and needs of individuals. Imagine for the moment that an Imlamist or Jew (both of which have been taught the pork, as a food, is unclean and thus unholy to partake) have been starving for some period of time, say two weeks, and the only food source is pork. Each would never buy pork at any price save one, to stay alive. But individuals are seldomed faced with such choices. The market place caters to our needs, desires, and wants through the selection process, we buy what we choose to afford, the ability to pay. In our culture we do not choose to haggle on price and quantity but tend to pay what price is asked. And if all the sellers are selling the same good or service at the same price we may feel that the price is unfair or unjust and the take it or leave it price is immoral. But still, either we pay that price or we fore go that good or service.

Now we might say that the sellers, by pricing a particular good or service at the same price have colluded or conspired to create a monopoly and thus extract an unfair advantage over the buyers are morally deficient in their business practices. But in a free market place where there is litle or no government interference, the transactions are a buyer beware condition. It is foolish to assume all buyers and sellers bring equal knowledge and ability to the market place. Again, one cannot disreguard individual differences, they are the biological law of the land and cannot be broken.

If money is a store of value (note I use "a" and not "the", showing that money is not the exclusive determiner of value), and money can be denominated into units of measure, the money can measure value to a certain point, but it is not the exclusive measure of value. Why might this be true? If you have an apple for sale at a dime and an orange for sale at the same price, then both have an equal value according to our measure of money. But you only have one dime, which do you buy with your one dime? I prefer oranges to apples so I buy the orange. Both fruits have a monetary value and both fruits have an intrinsic value and an intangible value. The intrinsic value is their size and weight and ripeness, something that can be measure, while their intangible is the consumers' preference in taste.

Let us say that the majority of consummers prefer to purchase oranges over apples. If there is a freeze in the orange orchards that reduced supply but demand remains the same the the price per orange will increase accordingly. This is an inflationary rise in price for oranges assuming demand remains the same. But if those who can only afford to spend a dime for their orange, then the demand will decrease and we might see a temperary rise in demand for apples. The price point shows where the curve of supply and demand meet and thus the market is at equilibrium. But let us suppose that the monetary authority now tells us the our dime is now worth eleven cents, enough to pay for oranges currently on the market after the orchard freeze. This is monetary inflation and it acts unequally. The producers of apples may now feel that a price increase is inorder since they want to keep that one cent increase in monetary value. If we give only those who buy oranges an increase in monetary value, such as a raise in their standard of living, meaning a wage increase, then we may see individuals bidding the price of oranges up because they demand more oranges.

The government economic policies of the late fifties and sixties produced inflation through the government spending programs of defense, space programs, social welfare programs (the Great Society Programs), and finally, the war in Vietnam. Here the government is directiong the capital investments and expenditures in large quantities. If industries need more coal and steel to make weapons of war, high rise apartments subsidized by government welfare payments to individuals who would not otherwise spend their own money, consumer goods, and spaceships that go to the moon, then there is an increase in the demand for the raw materials for the production of goods, an increase demand for unfinished goods, and the like. And since most of this was financed by government debt, this demand for an increase in capital and expenditures produce a rising in consumer prices and capital and capital goods prices. Wages tend to lag behind price increases. But this lag in wages can create over time when excessive misallocation of resources is applied over a long length of time a push-pull effect, prices rise creating a demand for higher wages which only increase prices and in turn into more demand for higher wages. Inflation peaked in 1982, as I recall when the interest rate was over 16% (Fed rate) and brought down the demand for capital.

Yes, money is a sort of yardstick but never a stationary measure. By that I mean that while a dollar will always have one hundred pennies and the scale has not changed in notation, the yardstick itself may expand and contract. Inflation and deflation will change the length of the measure and thus the corresponding length of the individual units. And inflation will act disproportionately upon goods and services. So far we have talked about both macro economics (the national and global collections of tansactions) and micro economics, regional and local transactions. One can have local inflation, often caused by the sudden rush of capital investment when a goods or services producer locates in a local area and causes a demand the exceeds the norm for goods and services that build the brick and mortar real estate needed to produce its products and lining demands for the increase in population through an increase if the number of families inolved in working for that producer.

Is inflation an infectious agent in the econimic system? No, it is, for the most part a natural process. Let us say that we have a small community of 5,000 individuals arrainged in family groups of varing size. Further, we have thos who farm and provide the community with food stuffs. The we have those people who sell the merchandise goods that are consumed by consumers and providers of serices that are consumed by consumers. If we have a very good year the crops we produce will provide an abudance, part of which can be sold to other communities and thus we now have savings or capital, since we did not consume all we produced. Perhaps that capital creates a new lumber mill and a furnture manufacturer. Perhaps by doing that we import more labor into our community to work in the lumber industry (someone has to ell the trees and hall them to the mill), work in the new manufacturing facility, and even in the expanded transportation industry. Further consider that we are an above replacement rate in birth rates and thus our children will need housing of their own and employment. This is a natural increase in inflation for housing since real estate is finite. It will also create employment in the building of such housing and an increased need in farm produce, meaning more acreage under cultivation and more cattle in the fields. But by obtaining the additional capital from outside our community we create through its use the productive resources and increase our population. This puts pressure on price stability in the form of increased demand that is above the norm.

As long as our community is isolated economic growth comes from an increase in the population. When individuals and resources are imported into the community we tend to be lured by the siren song of more economic growth is better, but all that has happened is the we have taken individuals and resources fom one area and added it to ours. If your GDP area depends by 40% on exports to other GDP areas then your growth comes at the expense of others. These are the basic economic dislocations. The world economy is a closed system, a finite game. The world population is estimated to grow to approximately 11 billion individuals and will reach a steady state population when the birth rates reach, on average, the replacement rate. That means that the natural economic growth rate, which is population growth, will cease to exist (approximately) and any economic growth in and GDP area will be the result of economic dislocation. Do you start to get the picture now of how the economy works according to its particular area? It is all very complex and not reduciable to simple formulas or fixes.

@Marta-Amance With all due respect, Economics is the study of the production, distribution and consumption of wealth. It is a study of how wealth is produced and its distribution after having been created. If you don't think a fair and just marketplace, where scales are just and right, for example is not a concern for the proper distribution of wealth, we probably don't have much more to talk about.

Economic systems have been proposed and studied in the past. Your initial question was about "right" principles. Is Socialism "right"? Is Capitalism? Who SHOULD own the means of production? Who should own, or be permitted to consume, the wealth that is produced in an economy? Which of these two systems produces more wealth to be distributed, and how should that distribution work? "Money"? Is that a good way to determine who gets stuff produced? What if everyone does not have the same amount of money to spend? Should everyone be given stuff, even if they have produced nothing? These are all questions of "morality".

And, yes, I understand the complexity of "systems". I aim to endorse a just and fair system. The present one we are experiencing is not. I will get to comments about your comments about inflation when I can find a bit more time. Thanks

@dmatic I fear semantics will be the death of you. You are overly concerned with wealth but have a rather vague concept of the term. Then you want fair and just introduced into the mechanics of a system of human behavior. Fair and Just are moral ideal, not economic ones. The free market is not fair or just in any sense of its being, it never was. And humans being prone to mistakes in thinking and acting find some measure of correctives to apply to the free market, to make is less of a risk to individuals engaging in transactions. We want uniform weights and measures and to have those weights and measures inspected for accuracy. The market place does not insure the "proper" distribution of wealth, whatever that may be. But if you must, human variation and chance take care of the "proper" distribution or distribution curve, if you like.

You want a fair and just system but have no way of "measuring" fair and just and you never will. Is it fair that you should be entitled to keep the fruits of your labor, is it just that your ability to delay consumption in favor of saving the your fruits of your labor so that you can invest in the ability to make more fruits? Is it fair and just that you should be forced to surrender some or all of the fruits of your labor to the free riders who demand it? Socialism has always failed as a political economic system, it always degrades into a dictatorship, so why even consider it, because it looks and sounds so pretty? Capitalism, my god, billions of individuals, you included, literally do not know or understand what capitalism is. Its essence is delayed gratification, hold back on consumption so that the furits of ones labor can be saved for later consumption. Can capitalism be corrupted? Can humans be corrupted? If I bring my apples to the market place to sell and you come to the market place to buy apples, then we may meet and attempt a transaction. I show you the shinney apples and you want a dozen. If you do not selet them and place them in your bag then I have the opportunity to cheat you by placing a couple of bad apples in place of a couple of good apples. I may be dishonest but my act of dishonesty has been greatly encouraged by your carelessness. On the other hand, if I take your coins without inspecting them you may have substituted a couple of slugs for a cuple of good coins. In all market place transactions the dictum is "Buyer beware!" Note that I, the seller, am a buyer of your coins. It is a two way transaction.

From your second paragraph you seem to want an economic system to act as a moral system. Economics is the study of human behavior in the market place. It is about the exchange of goods and services, not political intentions and certainly not moral ones. The free market is about human cooperation, not moral compulsion. You say you understand complex systems but your bias, your lack of knowledge says otherwise. You fail to understand that under your ideal of fair and just we all must agree exactly on what is fair and what is just or else you must use compulsion to erect your system and then it neither becomes fair nor just.

I expect that when it comes to your comments on inflation you shall inject your vague fair and just arguments. If that is all you have then it would be a waste of time for both of us.

Tell me, what should be the cost of borrowing money? How would your right principles calculate such a cost?

Maybe individuals or groups should save up the money to purchase assets, but according to you they might as well keep their money in the mattress since you want to outlaw interest. Like it or not, money has a time value as well as it monetary value and both are subject to change. But perhaps you are not opposed to indebtiness, only the demaning interest as part of that cost, the other being repayment. Your "right principles" may try to negate the law of supply and demand but that is vain thinking. There may be demand for debt, but without a premium such as interest or payment of a sum in addition to what is borrowed there will be little supply.

@Marta-Amance Why should there be a cost to borrow money? Just pay it back. Much employment and many good ideas are not occurring because of a lack of money and its "cost".

I am not negating the natural law of supply and demand.

You did not answer my question of what determines "right" in your mind. Just thought maybe we could have a discussion without presumptions. If you already know the answers, why did you ask?

@dmatic A very simplistic assumption on your part. What would be the inducement for those who have some store of money to lend to those who wish to borrow? You never answered that question. And you are most definately negating the law of supply and demand.

If you have read the six parts to my post series on banking, finance, and economics then you would have gained a rudimentry knowledge how banks, finance, and economics works. I told you about the theories we assume banking is suppose to work and then I told you some of the realities that contradict those theories. If some of those theories are wrong, then we must expect that there are correct theories that should be followed and observe if they work in practice or not. Certainly the practice of fueling unwarrented speculation is a practice to be avoided.

Locus of control certainly is involved in human behavior where money is concerned. The learning of delayed gratification is a principle of good human behavior. And finally, learning that one never gets something for nothing is a crucial value to be acquired. Finally, humans learn (some do not) that living in the world involves risk. That risk involves errors in thinking and acting. It involves accidential encounters and outcomes. We are creatures of habit, of habituation, and as such we develop risk in our behaviors. This is why we develop rules of behavior, codes of conduct, rules of life to follow and guide our behaviors. We are born into a group and make a practice of joining other groups yet we maintain our independence as if we did not need groups. Quite the contradiction. We learn what is "right" from our parents and from society, yet the child development studies that we have what may be considered a since of fairness and even a sense of right and wrong that is genetic in nature.

Now you may feel the right principles come from god but last time I checked with him he denied such a statement.

@Marta-Amance I'm sorry, but I have not had the pleasure of reading any other posts by you. I simply came across this one and read it. Sometimes, our forefathers and mothers have inherited lies...so to base one's opinion on what is right, according to what they have taught is questionable wisdom.

Your flippant last paragraph quoted here: "Now you may feel the right principles come from god but last time I checked with him he denied such a statement." is a bit bothersome, or revealing. The tone of your posts suggests you think you are fairly smart, so let me ask you something, if I may: If you were wrong about something, would you want someone to tell you?

Oh, and to answer your question about inducements....that would be 'love'.

@Marta-Amance The definition of economics is the study of the production, distribution and consumption of wealth. What is "money"? What is wealth? Maybe you've answered these questions already in your previous posts? In my view, money is a trade convenience, which merely represents wealth. It is not wealth in and of itself.

@dmatic Economics is the study of the production, distribution, and consumption of goods and services, not wealth. Even as hunter gatherers we engages in trade with members of out tribe and members of other tribes. The insure that we did not inbreed we married outside of our tribe. In doing so we needed goods and services that we could exchange with those other tribes. This is the beginning of "wealth", being able to provide a service or good that would be desired by others. One can say that wealth is a value system. In a barter system we trade our goods or services to those who desire them and have goods and services we desire. But that is a two party transaction when that trade is conducted and human interactions become more intricate as individuals and groups explore ways and means to improve those trading interactions. Now if I have some good or service you desire but you have no good or service that i desire then we will not interact. On the other hand someone else may have what I want but desire what you have. We now have a three party trade exchange. In many vertabrete societies, cooperation is one of the behaviors that keeps the group alive.

Barter can get complicated and time consuming. It also limits production of goods and services. Money is a thing of value. It is not merely a convenience to trade, it is a metric, a measure of value, and a store of wealth or value. But more than that, it is also a cost of doing business, a cost of exchange, and a cost of living. We put value on our lives, on our living, on our work, and one the goods and services we buy. We even put value in our religious or spiritual beliefs, in our education, in our ability to think. We go so far as to place value on what we believe is our purpose in life.