How to define money

Money is a medium of exchange that reflects value either via limited supply and/or economic proxy. How to define money is also asking what method is used to define money. A common conception of what money is, is cash money, however money can be defined purely in terms of numerical value which itself differs within foreign exchange. Money can also be defined in terms of where it comes from, for example Investopedia defines hard money as currency backed by precious metal as well as repeated government funding.

Ancient Chinese 'Spade' or 'Pu' Money

Image license GFDL Attribution: Roger McLassus

Alternatively, money can be defined by how it is used; for example, is it used with physical or digital exchange. How to define money also involves answering different questions about what money is such as what is it made of? Gold and silver were once used as money, but are now mostly used for commemorative and collectible coins when in currency form. Thus the questions asked in defining money also offer a way how to define money i.e. the act of questioning rather than inferring meaning   Some methods for defining money are listed below.

• Inquiry in to the how, why, what and where of money
• Analysis of the answers to the inquiry of what money is
• With counter-hypothesis to reveal vague aspects of money
• Historically, scientifically, sociologically, economically and artistically

Without a method, or means by which to discover how to define money, answering how to define money may be left unanswered or simply defaulted to a basic answer such as 'Money is any object, resource or actualized concept that reinforces the idea all things have worth'.

Thus, assuming thought is a valid way to discover how to define money, thinking what it would be like without money is one way to define money. Moreover, in such instance worth would not be defined in terms of a representational currency and that would have potentially dramatic affects on civilization, society and economics.

Money facilitates economics

Money is the facilitator of economic growth, demographic expansion, and the infrastructure now required to keep so many humans living a life in modern day society. Thus, money is more than just a medium of exchange and valuation metric as defined by the online Merriam Webster Dictionary.

To define money for what it is involves understanding what money does by inquiry and extrapolation of what money is thought to be. Money is a dynamic intermediary facilitator of trade, commerce, lifestyle, standard of living, services, and exchange. Money is also a concept from which other concepts can be derived. For example, financial derivatives are a conceptual abstraction derived in part by and with the metric of monetary value.

Money also partly defines our identities as humans because we use it frequently, and our lives are somewhat dependent on what money makes possible. This is where the phrase “Money is power” is referring to, however money itself is not power but rather a tool of power or power tool! In other words, when defining money as power one means the use of the money holds influence over the actions and possibly even beliefs of others via a greater more important need to survive which to a large extent is only made possible via money. Thus money can be said to be one or more of the following:

• Global facilitator of exchange
• Influential and/or important part of society
• Basis of commerce
• Representational of human belief
• Quantitative metric
• Physical object and/or digital record
• A conceptual abstraction

Money is not an emotion

Money is not that which it represents, meaning when thinking about how to define money, one may equate money with quality of life when all it really does is facilitate standard of living. Moreover, money is not wealth but the measure of wealth; not economic status, but a measure of economic status etc.

Money is also not a feeling or emotion, but rather a means to some feelings or emotions. Nor, in the minds of many but perhaps not all, is money a god or deity which is to be worshiped. Money may indeed be worshiped on or off the record by some, but the worship of money does not mean money itself is a god or deity. Moreover, gods and deities regardless of their true existence, are most commonly personas and not objects.

Another thing that money is not is essential for life from an existential point of view. Moreover, money is a human social construct that has become almost essential for life, but only because humans have made it so. Thus, what is done, can also be undone, therefore money is not necessarily essential per se.

Lastly, money is not defined as any one object or thing. Since money can be coins, bills, an electronic balance, a goat or even a particular action, then money is not any one of these things per se and in its entirety. Money may indeed be a coin, but money just because some money is a coin doesn’t preclude it from being something else.

• Wealth or status
• That which money represents
• Gods or deities
• Emotions or feelings
• Essential for life
• A single object type of exchange

Summary

How to define money is a matter of context and context is the situation in which money is defined. For example, a simple exchange using a dollar bill in and of itself, and not taking into account the role of money in society but simply the use of money will only explain what money is used for, and some of the means by which money is used i.e. paper currency. To define money in a larger context requires the inquirer to place money in different contexts so as to define money more completely as money is more complex than it may seem.

Money as a tool is defined and used in a variety of ways via derivative metrics, multiple forms of money and within differing institutions with different functions and goals ex: non-profit vs profit financial institutions. What money is not is most clearly what it represents as money is at best a reflection of life and all it has to offer and not life itself.