The Root of all Evil?

I disagree. Many perceived evils however, can be attributed to the love of money and the need for it (in a monetised economy) can drive people to do evil. But money itself isn't evil. It just is. Just like a chainsaw or a knife or a car or a firearm, it's not the thing which is evil. It's the intent with which it's used;

"Until you change the way money works, you change nothing." -  Michael C. Ruppert

The way that money works, the rules by which it's created, destroyed and circulated, all dictate how the economy is organised and operates. The fact that money is lent into existence, at interest, is the root-cause driver of inflation and the so-called 'economic growth imperative' - the principal problems facing industrial civilisation. Added to this, is the idea that money serves three functions - medium of exchange, measure of (relative) value and store of wealth. It's this last 'function' that distorts the way money works.

Money serves its highest purpose - enabling the exchange of goods and services in a complex market (one with a sophisticated division of labour) by circulating. The more rapidly it circulates - changes hands - the more 'economic activity' there is and therefore, the more wealth is created. Anything that inhibits this circulation, depresses the level of economic activity. Whether by decree or by some intrinsic property of money itself, if it's used as a store of wealth, people will hoard it and this has the effect of reducing the total amount of money actually circulating. This is why I'm not a fan of using precious metals as money. Doing so is inherently deflationary.

Money is not wealth. It's only a way of measuring wealth. 'Wealth' is what's created when raw materials and energy are combined creatively, to produce uesful things. While a person with a lot of money can be (and is, often) described as being wealthy, what's really being said is that the wealthy person has access to many more goods and services than someone who has little or no money. However, if this person were stranded on a desert island with several suitcases of money, it would be worthess to them, in the absence of somewhere to spend it.

Price doesn't equal value. Here's a neat little experiment you can do, to illustrate this point; If you've bought and sold a house, convert the price you paid into ounces of Gold, at the price Gold was selling for when you purchased the house. Next, convert the price you got into Gold, at the price of Gold was at when you sold the house. You can see relative value when you compare the relationship between things of intrinsic value rather than money. The fact that your house sold for four times what you paid for it, only indicates that the money someone used to buy it from you, was worth a quarter of that which you used to buy it. Inflation is a monetary phenomenon. A Roman senator would have paid around one ounce of Gold for a high-quality toga. You'll pay around one ounce of Gold (equivalent), for an Armani suit, today.

'Peak Oil' is a shorthand way of refering to the raft of economic consequences that occur, when a 'growth-addicted' economy runs into hard ecological and environmental limits.

When money is lent into existence at interest, only the principal is created. In order to repay both the principal and the interest, another loan must be taken and so a 'positive feedback loop' is created. The total amount of money in existence must increase constantly and the only way to prevent such a system from hyperinflating and collapsing, is to continuously increase the total quantity of goods and services available in the economy. The problem is that while it takes almost no energy or rescources to create money (because it's principally nothing more than ledger entries), it does take energy - quite a lot of it - and raw materials to create the corresponding wealth it represents.

You can't have unlimited growth, in a finite environment.

This is the point that Industrial civilisation has now reached. Peak Oil means the end of 'economic growth' as we know it. While I disagree that money is the root of all evil, I do think that money (or more specifically, the way it works) is the 'root-cause' of much of what's wrong with our civilisation. I offer a couple of ideas on how this problem might be addressed;

1. Change the way money is created: While it varies in detail from country to country, the current process in all countries with 'modern' monetary systems basically consists of the Treasury issuing a note or bond for let's say, a million dollars. This note is taken to the Central bank, which credits the Treasury's account with a million dollars and then charges one to three percent interest on that million forever more. I suggest that instead of interest, the central bank charges a one-off fee, which comes out of the balance created. Absent the interest imperative, the money supply doesn't need to grow and can even shrink if needed by the simple expedient of the Treasury buying back its notes from the central bank.

2. Use something else as a 'store of wealth'; This could be as simple a denominating account balances in something other than money, like quantities of a valuable commodity. When you deposit your wages the dollars are converted to a quantity of something (Gold, silver, copper, whatever) and when you make a withdrawl the (current) dollar amount you ask for is converted to a quantity of the commodity your account balance is denominated in, and that amount is deducted while dollars are passed across the counter, to you. This has the effect of insulating savings from inflation, which is as I pointed out, a monetary phenomenon.

A number of excellent essays on money, can be found at Reinventing Money. The link is in the sidebar.