Money: The Root of All Evil?

Some ideas and sayings die hard, even when they are demonstrably wrong. In this case, the saying "money is the root of all evil".

To understand what the saying means, we first need to ask, what is money? Essentially, money is nothing more than a medium of exchange. It is a tool or means of allowing people to engage in indirect exchange instead of direct barter. It is usually considered the most commonly exchanged commodity in a society.

As such, money was developed spontaneously in society by people who were having difficulties engaging in direct barter--money solved a difficult exchange problem and made it easier for people to trade with other people in a more convenient form. Commodities like gold and silver were eventually adopted because they were considered most suitable for use as money, given their particular attributes.

Note that money arose spontaneously out of human need--it was not created by governments. Governments only later appropriated the money-making process, which was originally a private function. Only by government appropriation could we have reached our current situation, where debt-backed paper (Federal Reserve Notes) is considered to be "money". Switching back to a commodity-based money supply would currently be difficult and illegal; government would not allow it if they can help it.

So money is a tool that enables the convenient exchange of goods and services between people. To say that money is the root of all evil is to say that voluntary, indirect exchange between people is evil. To a libertarian, and I hope to most other people, this seems like an absurd thing to say. How can it be evil for me to give someone money in exchange for groceries, clothes, books, or other things that I want and need to live my life? Or for people to give me money in exchange for my labor, goods, or services?

Quite simply, voluntary indirect exchange is about as opposite evil as you can get--nothing has improved people's lives as much as the division of labor made possible by indirect exchange through money. It's true that through theft, fraud, or counterfeiting, some people can get money without producing any beneficial good or service in exchange, but that's a small subset of all economic transactions, and doesn't outweigh the benefits of money or change the moral equation.

It's also true that there are serious problems with our current Federal Reserve system and fractional reserve banking, so much so that some consider the Fed itself to be issuing "counterfeit" money. However, this is not fundamental or inevitable to money, but is simply a problem caused by the politics of government taking over the production of money instead of leaving it in the private sector.

In this light, it should be obvious that money is not the root of all evil, coercive power is. The next time someone brings up this old quote to you, perhaps you should ask them what they mean by "money", and maybe they, too, will see the light.


Anonymous said...

Good points...

The saying as I remember is "The LOVE of money is the root of all evil"

Which I think just further validates your point.

macsnafu said...

Excellent! I'll have to use that as a response the next time someone 'gets it wrong'. ;-)