The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

The Origin Of Money and Value

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

DennisDuty

Mini Media Mogul
Read Millionaire Fastlane
Speedway Pass
Jun 16, 2012
1,476
3,205
886
31
Bali, Indonesia
Instead of posting in this thread, I wrote this and figured it needed it's own space. Check it out:

Toast IS Bread.

"How do I make more toast?"
Put more bread into the toaster.

Money IS value.
"How do I make more money?"
Provide more value.

Let's break it down:

ORIGINS OF CAPITALISM:

I am skilled in fixing roofs.
You own a cow.

You need your roof fixed and offer me milk.
Agreed! We trade, and all is well and good.

The following week you want your roof fixed again, but I don't feel like milk.
You give me a voucher for milk, and I fix your roof again, and I'll use the voucher when I feel like milk.

Next week, your roof breaks. I swear it's not because of my craftsmanship, it's because your built your hut in shitty location. Lots of falling rocks.

So, I fix your roof. You give me another voucher. I haven't used my first one yet, but it's transferable.

I give the voucher to Mary in exchange for some wool.
When Mary wants milk, she can use the voucher and you hook her up.


Origin of Money

What happens when the value of goods can't be a 1:1?
What if you want an entire hut built in a better location? How many cows is that worth? How many vouchers? How much milk?

We create a placeholder and assign it a value we can all agree on.
Currency is LITERALLY a placeholder for services and goods.

This is good and well and the way things should be... it's the way things HAVE to be if we're going to operating in groups of more than 150.

My Point

Money IS value.
It's a coupon for value you provided to others,
and it's redeemable for value from others.

When you work a job,
you're providing value to your employer.
You're helping them create value for the customer... which is how they can afford to pay YOU.

But you don't need a job to deliver value.
You can give value to people yourself.
If your venture becomes so big you can't do it yourself anymore,
You can give money to people who help you deliver value to people.

Money's been abstracted by ridiculous systems...
It makes it hard for people to keep track of what money REALLY IS.

But as long as you understand that money is a placeholder for value, it becomes easy to figure out how to make it.

There is no secret.
Find a way to provide something valuable to the people.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Last edited by a moderator:

16thCylinder

Contributor
Read Millionaire Fastlane
Jul 2, 2015
28
46
26
UK
Nicely explained.

These days governments are printing these coupons like crazy, with no value to back them up.
 

Andy Black

Figuring it out as I go along!
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
May 20, 2014
9,172
38,438
4,306
Ireland
Nice explanation. Money is just stored value.

I had this exact conversation with my small kids last weekend. The only difference was a blacksmith exchanged horse shoes for a shepherd's wool.

Why is this simple truth unlearned over time, so that we need a "wake up" post to bring us full circle?

Thanks Dennis.
 

ZCP

Legendary Contributor
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Oct 22, 2010
2,628
8,851
1,966
Woodstock, GA
We may start adding an option in our engineering proposals to pay us in beaver pelts.

Read a story years ago about a tractor manufacturer that was offered railroad cars of mink furs in return for some equipment. He turned them down not knowing it was worth millions more than his selling price on the equipment.
 
OP
OP
DennisDuty

DennisDuty

Mini Media Mogul
Read Millionaire Fastlane
Speedway Pass
Jun 16, 2012
1,476
3,205
886
31
Bali, Indonesia
These days governments are printing these coupons like crazy, with no value to back them up.
This is superficial and doesn't actually matter.
There was never anything to "back up" value.
The amount of gold in the reserve doesn't increase or diminish your ability to provide a service or product to your peers.
We're just pushing sand around to make ourselves feel better, it only serves emotion.

Due to the nature of currency, things naturally come to an equilibrium.
It doesn't matter if milk costs $3 or 360 yen, because value of a cow will always maintain a ratio with the value of the milk it provides.
The people will always adapt over time.

It's F*cking ridiculous that the governement is wasting time with it at all.
Rather than trying to HACK the system, make some fundamental changes and it's all better organically.

Why is this simple truth unlearned over time, so that we need a "wake up" post to bring us full circle?
It's pretty shitty.
In school, we're teaching the systems that currently exist and what their rules are.. but we're not teaching their premise or purpose.
Without context, it leads to bad places.

People get angry at rules they're told to follow without knowing why.
It leads to scapegoating and loss of personal productivity.

Without knowing the premises, nobody knows how to adapt and change to make things incrementally better.
Misdirected anger leads to people 'lashing out' instead of making simple moves to fix things.

By making a small tweak to education (teaching the premises of our rules BEFORE we teach the rules themselves) we would eliminate not just economic problems, but social problems as well.

Unfortunately, not all parents are enlightened on why the rules work (nobody taught them) so they can't teach THEIR children extracurricularly.

Start a Kickstarter for an illustrated children's book that teaches them what business and money are. :)
Ha, maybe!
I'm launching two more KS' already before the end of the year, maybe this will be my third!

However, I always thought that a better idea would be to turn this into a YT channel that focuses on explaining social dynamics.
I'm thinking about perhaps having one of my animators make a explainer-style video.

There's a lot more I have written... in similarly simple terms that explain complex subjects.
Such as:
  • Why the Banking industry is completely obsolete
  • Why the energy crisis is on-track to solve itself
  • Why people are so upset about "Cultural Appropriation"
  • Why Celebrity gossip is so popular
  • Why the world's NOT out to get you
I think it would be beneficial for people to consume... but I don't know if it's worth pursuing,
the other shit I have going on is pretty promising.
 

DayIFly

Bronze Contributor
FASTLANE INSIDER
Jul 16, 2012
80
127
138
You are right in theory. You would be right if we lived in a small village separate from the world, like in the movie "The Village". It's a perfect world scenario.

If you search in the archives, you'll find threads about concepts from "The Secret". Now such threads are only created rarely, because people learned about or realized the creation of value. The former is about hope and overconfidence, the latter is about reality.

Now apply this to other areas of live:
Hope/Overconfidence: The system is stable. Nothing matters at all except that I create value.
Reality: I have to create value, but if the system is broken I'll lose resources. Can it get worser? What can we do?

This is superficial and doesn't actually matter.
There was never anything to "back up" value.
The amount of gold in the reserve doesn't increase or diminish your ability to provide a service or product to your peers.
We're just pushing sand around to make ourselves feel better, it only serves emotion.
You're talking about value-backed currency, i.e. value in terms of "real value". Which means you only print additional money if, and only IF value is created. But we don't have that and yes, this matters A LOT.

It's not superficial at all. If too much money is printed, then "too much debt +1" is created. If you can't pay it, then compounded interest will double/triple/... it after decades.

So now you have the biggest debt in the world and regular people have to pay taxes, from which 60% is taken to pay "only" for this artificial valueless money-debt. Now you work 3 or 4 of your 8 hours for nothing, it's like going in your garden and digging holes and then closing them up again. Or more positively said, you're a good Samaritan for the system.

If you're a small country, you have to default. To come out of the hole, you'll then have to privatize and sell resources like mining rights and some land. And this is only to GET BY.


Determination and overconfidence is a good thing if it's based on reality and doesn't go overboard.
 
OP
OP
DennisDuty

DennisDuty

Mini Media Mogul
Read Millionaire Fastlane
Speedway Pass
Jun 16, 2012
1,476
3,205
886
31
Bali, Indonesia
@DayIFly

You're talking the semantics of other systems baby.
Debt, Taxes, Compounded Interest, Loans.

These are all systems separate from currency.
They use currency as a foundation, which is why manipulation of currency affects them, but they're separate systems.

All the problems you mentioned are side effects of these poorly designed systems/

Currency itself self-corrects, we don't even have to think about it, it just happens.
Instead of worrying about THAT,
We should focus attention on these other flawed systems and how to fix their dependencies.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

ilrein

Silver Contributor
FASTLANE INSIDER
Speedway Pass
Oct 1, 2012
384
555
260
28
This thread is why I always laugh at anti-capitalist views.

At it's core, capitalism is the only system compatible with free society -- one where parties trade for mutual benefit, and the role of the government is to protect us from those who would seek to coerce unfair trade (domestically -- through police/courts; internationally -- through military).

Money is merely a representation of work done, a frozen state of energy, an unchanging form of effort and force.
 
OP
OP
DennisDuty

DennisDuty

Mini Media Mogul
Read Millionaire Fastlane
Speedway Pass
Jun 16, 2012
1,476
3,205
886
31
Bali, Indonesia
This thread is why I always laugh at anti-capitalist views.
The anti-capitalist views are more targeted at "Bank Managed, debt centric, shareholder based, international economy" version of capitalism that we're living in. The concept of capitalism is appealing to those people when properly broken down.. but most people don't break it down themselves.

When we explain these issues to people who don't think about it much, It's very important to parse the ideologies from the systems used.

It's dangerous to group issues in with Ideologies... uneducated masses make emotional associations with the term "Capitalism" or "Patriarchy" or "Feminism" and end up rebelling against or fighting for causes without actually knowing why they're fighting.
 

DayIFly

Bronze Contributor
FASTLANE INSIDER
Jul 16, 2012
80
127
138
It's dangerous to group issues in with Ideologies... uneducated masses make emotional associations with the term "Capitalism" or "Patriarchy" or "Feminism" and end up rebelling against or fighting for causes without actually knowing why they're fighting.
Talking about overconfidence xD

Sorry, you're right. I wanted to dig deeper than the statement "currencies have the function to facilitate trade". I actually never met a person who didn't know that or needed an explanation for this.

Even Homer Simpson got that :)

After my post, you two began to talk about anti-capitalist views. I hope you don't lump me together with the various movements. If I were anti-capitalist, I wouldn't be on this forum.
 
OP
OP
DennisDuty

DennisDuty

Mini Media Mogul
Read Millionaire Fastlane
Speedway Pass
Jun 16, 2012
1,476
3,205
886
31
Bali, Indonesia
I actually never met a person who didn't know that or needed an explanation for this.
People understand it intellectually, but not intuitively.

To 99% of Americans, money is an abstract concept. "How do I make money?" "How can I get rich" "I'm going to make millions!" is something that's said on these very forum all the time. They're looking at money as something independent of value, which just isn't true.

A lot of it comes down to how we were raised.

When you grow up in poverty, money is an abstract concept that is won by unfairness and birthright.
My facebook feed is now filled with ADULTS who still struggle with internalizing what money ACTUALLY IS and how they can make it.
 
OP
OP
DennisDuty

DennisDuty

Mini Media Mogul
Read Millionaire Fastlane
Speedway Pass
Jun 16, 2012
1,476
3,205
886
31
Bali, Indonesia
who gets to decide how much different value are worth?
Everybody does by what they are/are not willing to pay.

If milk is $4, and the consensus is that $4 is not worth milk, people stop buying milk.
To make money again, the sellers of milk must reduce price until it sits at the point that it's ACTUALLY worth.
 

luniac

Platinum Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Dec 7, 2012
1,723
2,645
677
29
brooklyn
Everybody does by what they are/are not willing to pay.

If milk is $4, and the consensus is that $4 is not worth milk, people stop buying milk.
To make money again, the sellers of milk must reduce price until it sits at the point that it's ACTUALLY worth.
but what about price fixing and corruption. It's like nowadays people earning minimum wage can hardly even support themselves because malevolent forces are printing money for nothing and destroying the whole ecosystem... or something...
 
Last edited:

GatsbyMag

Bronze Contributor
Speedway Pass
Jun 20, 2016
142
250
174
Excellent thread Dennis

This is a slight deviation, but this topic brings to mind some of the recent guru threads we've had lately, sure there's 'perceived value' and 'value'.

But at the end of the day, what's the common denominator in both words?

People blame companies like McDonalds and KFC for the population's unhealthy eating habits & for feeding them unhealthy food - but is it not the consumers that are making these demands?

Everyone wants their rights to choose etc. but no one wants the responsibility
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
2,436
9,834
2,203
World citizen
The origin of money is definitely value exchange. The old bartering system generally worked well, provided each party could provide value as perceived by the other.

When engaged in large scale cattle breeding as a hobby I had an excellent barter arrangement with a neighbor with a small holding. I often needed excavating of different kinds done, such as keeping roadway drainage clear throughout the property. He had suitable machinery, and he needed to obtain weaner calves to fatten up.

Over a period of many years we bartered calves for roadside drain clearing, or removing silt from a creek, but cash never changed hands. We just kept something like a record in our heads. Even when I sold up and moved, we called it quits. We were both satisfied.

Governments don't like that kind of transaction. They prefer to collect cash without giving value - or at least without giving much.

Walter
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.

Sponsored Offers

  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
New Course! Upwork Client Psychology I #UdemyApproved! Upwork Client Psychology I is designed...
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
Welcome to 2020, I wanted to add in a quick note about gratitude for the new year...


Don't like ads? Remove them while supporting the forum. Subscribe to become an INSIDER.

The 2020 Fastlane Summit

This event SOLD OUT in October. For authorized resale tickets, please check ticket resales or contact the forum directly.

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom