FARMERS AND BUSINESSMEN TALK FREQUENTLY ABOUT “MAKING MONEY”. But this common statement is most misleading. When a farmer grows a bag of potatoes he does not at the same time create a money equivalent. Farmers and businessmen obtain money from someone else in exchange for what they have grown or produced. It is true that some people attempt to make money in the form of notes, but if caught they finish in prison tor counterfeiting! Who, then, does make a community’s money? How is it made and controlled? A modern economy is controlled almost completely by financial policy. There is practically no barter. All exchanges of goods and services take place through money. No understanding of the problems of an economy, including inflation, is possible without an understanding of the creation and control of money.
The essential feature of any form of money is its acceptability. The psychological factor is all-important. Counterfeited $20 bills act as money just so long as they are accepted by those handling them. Throughout history many different forms of money have been used by different people— shells, different types of stones, metals made into different types of coins, paper money of numerous sizes and types. But so long as people believe that they can at any time obtain goods and services for any type of money, then they accept it and it acts as money Money has no value in itself at all. A million dollars is useless on a desert island. The first essential in examining the money question is to stop regarding it as an end in itself, to realize that money is a man-made system and that the system can be changed by man. To worship a man-made money system is a form of superstition. It is not money which is the root of all evil, as some maintain, but the love of money.