Ever since I've realized that money is also both a social and societal construct, I've been on a path to inspect this particular construct in different sorts of ways, looking at it from different angles.
The subtle difference between a social and a societal construct is usually the scale and scope of influence, the latter generally has a broader scope of influence.
The value of money is a social agreement. It exists because we collectively believe it has value, even though it's just a piece of paper or more recently, numbers on a screen. Money is a fundamental part of the economic system, which in many ways is a societal construct that governs how resources are allocated and exchanged.
In a way, we could sum it up as money is a social construct that has been institutionalized into a societal construct. No wonder it has so much power over our lives and can shape our behaviour and decisions.
Now, how is money renewable?
Thanks to the advent of NFTs, I learnt about this F word, Fungible. It is mostly used to differentiate between assets that are interchangeable(like traditional currencies) and those that are unique.
I think that's the interesting thing with concepts or ideas, you have to pair them with other concepts or ideas to really animate and explore them beyond a superficial level.
What is the element that's always paired with money and has become a great barometer of its value?
Concealed Time
Well, it's time. Compared to money, time is finite and non-renewable.
Unlike natural resources, which might deplete and cease to exist, money can be continuously generated through various economic activities.
Every time goods or services are exchanged, money circulates, gaining new life in each transaction.
It seems like a good trade that money can indeed buy time, in the form of services that alleviate our daily burdens or allow us to focus on leisure or more valuable pursuits. Time itself however, is an unyielding asset; once spent, it cannot be replenished.
I think this dichotomy can be a good way to understand a fundamental economic principle, which is time is literally the only truly scarce resource.
Intentionally or not, economies have evolved to create systems where time can be 'sold' for money, but money can never buy back the moments lost.
So in a way, there's a one directional or rather fixed exchange through which money primarily buys and time primarily sells. But actually, there's only one element in this exchange, given that acquiring money mostly comes from selling our time.
An interesting angle to explore how the renewability of money relates to sustainability. If it is perceived that money can be generated indefinitely, then this will encourage an economic system that grows without regard for resource depletion. Isn't that dangerously unsustainable, more or less?
Logically, if we transition to a system in which money has inherent limits (like some cryptocurrencies), it may probably foster a more sustainable economic approach where the focus isn't solely on growth but also sustainability. Less bubbles and bursts, more relative stability.
Thanks for reading!! Share your thoughts below on the comments.