The Value of Money

Yesterday I listened to Colin Renfrew, the famed archaeologist, walk through a bit of history about money and value. He talked about how early in the history of humankind, things like gold don’t appear to have had any value that we can tell. Decorative gold objects don’t appear in burial sites until 4,000 B.C., from Varna bulgaria. It’s at about the same time that artifacts appear that seem to be signs of religious ritual. So humans gave importance to things besides the basics needed for survival at about the same time.

That objects we couldn’t eat or wear had value makes it not a far stretch to creating the concept of money, measured by weight or other material collateral. In the last 100 years, money has gone close to being completely virtual. The last big move in this arena was Nixon’s move from the gold standard in 1971. Perhaps we can blame Nixon for helping create our current mess, by unbundling money from the physical world!

What money is worth is changing in ways we can’t yet predict. I don’t imagine we’ll go back to the gold standard or something like it. The goal right now is to find a value for these intangible assets that were sliced up into little pieces and sold without collateral. One thing that won’t change is a return to money based on something physical, like gold. We’ve become very good at  creating value that does not correspond to anything physical, and that’s unlikely to go away, even in the wake of the downturn. Oddly, at the same time many people are finding less value in the idea of God (at least as set up by organized religions in the Western world).

Perhaps the Colin Renfrews of the future will look at the spareness of artifacts from our society and posit that religion and money disappeared at the same time. They’ll be wrong, but how will they know?

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