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I'm not sure I would use the word "interesting" it is more likely "illuminating" :-) But word selection aside, one of the problems that money brings is that it is a concrete number, and thus susceptible to being coerced into being a "score." This is particularly true when you have people who are insecure about their value, they might get it into their heads that the person with the highest "score" has the highest value. As the author points out that isn't a horrible place to be, it helps the economy, but it does become toxic when a person uses consumption to advertise their score relative to other people. (It becomes tragic when someone borrows to spend consumptively in order to present the illusion of having a higher score).

One of the examples of how broken this can be, is that of creating a company (with some paperwork and about $1,500 you can do this easily in California), then issuing yourself 5 billion shares in the company (also easy to do, just register them with the SEC), and then "sell" 20 of your shares to a friend of yours (who is a qualified investor :-)) for $20 to establish a "market value" for your shares. And Poof! you are now "worth" $4,999,999,980 by virtue of the "value" of the shares you still hold, you are a billionaire! And you only need to pay the $850/year to maintain your corporation's status.

So who wants to be a billionaire right? And what does that mean? You have a high "score" but you don't have any real wealth. You can't really sell a billion shares for a billion dollars. That isn't going to happen right?

So now people play this game in the crypto coin market, creating a coin nobody will actually use, giving them selves a bunch of it, and selling some to speculators to establish a story about what that coin is "worth." What does it mean really? Not a thing.

I wonder if taxing stated wealth (even if at a miniscule percentage) would help avoid insane/gamed valuations.

You get other sorts of gaming. Property taxes function like this, and there's a whole industry around avoiding re-assessment, getting assessors to low-ball property, etc. right up until it comes time to actually sell the property, when you do a bunch of renovations, get it re-assessed, and try to get the highest valuation you can.

Money is a measure of social value.

Your status in the tribe is highly dependent on your utility to the tribe, and that utility is highly-dependent on how well you work with other members of the tribe to achieve common goals. If you are more effective than your neighbor at advancing community goals, then you will have a higher social value than your neighbor.

When we were just tribes of 150-200 humans, our minds were able to store all of this social value tallying. You can intimately know everyone in your tribe. You know their credits and debits to the communal good. We have imaginations though, and can abstract some of this into stories and myths and other sorts of value systems, and so, maybe you don’t know Urgk personally, but he has a lot of cows, and you know how useful those are, so you immediately assign him some qualities in your mind.

This breaks down if you also don’t know how Urgk got these cows. Did he murder their owners and take them for his own? Did he execute some brilliant trades with tanned leather than eventually became a self-perpetuating cow-wealth machine and left the whole tribe better off? Hopefully, in your abstraction machine you’ve also codified some of the qualities of one type of Urgk and qualities of the other type of Urgk. He’s wearing a cross, and he treats his children well, so, even though you still don’t know him intimately, you at least can make some assumptions, and communicate with him directly to fill in the rest.

If you wanted people to respect you in your tribe (a VERY natural and good desire to have), then you might start trying to figure out how to build a cow-wealth feedback system too. You don’t know shit about tanning, but your weird son enjoys playing with sticks and has an idea to make everyone’s domicile a little more resilient to the weather with his weird hobby. People don’t really understand it, until they see it.

Or maybe you just decide to gain wealth by doing something that is not respectable, and yeah, you’ve got the money now, but it’s negated by the negative social value you’ve incurred, so you’re never truly respected and you never get the girl, ala Gatsby.

You’re comment is close to the mark. I’d go even further than you have and just say outright, ‘money is a store of social value’.

Except money is inheritable and genuine social value is not.

Indeed, since some 50% of wealth is now owned by about 1% of the population, it is clear that a vast percentage of wealth is now obtained through inheritance.

I note you say "genuine," but in many cultures perceived social value is definitely inheritable.

You end up getting a class of people who's social value is inheritable. They typically serve ceremonial and liturgical roles. This is all generalization, of course, but I would consider this to be the rule, not the exception. Cultures stratify.

Yes, but my salary depends not on the utility I create for my company, but on the cost of replacing me (labor market). It's just happened that very few people are willing+capable of doing my job.

> What if money actually became more valued than what you can buy with money?

"Value" is dependent on time. You can't ignore the time-value of money.

Money is the most liquid of assets and that confers it with specific features not shared by other assets. Every investment is a trade-off between liquidity, risk and return. Money maximizes liquidity and lets you optimize for just risk and return. This makes capital allocation simple which in turn lets you diversify away virtually all of your investments' idiosyncratic risk, leaving you exposed only to systematic risk. That is why money is more valuable than what you can buy with it. Because it can create more value over time (higher return) better than any other asset (with lower risk) while having maximum liquidity.

> What if supply didn't create its own demand?

It doesn't. Say's Law[0] is far from being a foundational assumption of Economics. We've moved far beyond that since at least Keynes.

> What if people didn't try to make money to satisfy their own wants, but to one-up their neighbors in the pissing match of life?

What if one-upping my neighbor is what I want out of life?

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⁰ https://en.wikipedia.org/wiki/Say%27s_law

Any the best way to one-up your neighbors is to provide social value to your neighbors. As someone else said, money is just a store of social value. That act of everyone trying to one-up each other is beneficial for the tribe.

>What if people didn't try to make money to satisfy their own wants, but to one-up their neighbors in the pissing match of life?

This premise contradicts itself. Wanting to use your money to one-up people IS a want. You’re simply judging what some people might want. I’m not saying some people don’t want that, or that it’s not worth being judgemental about, but it entirely undermines your point.

It behaves very differently from an economic perspective, though. Normally, when you trade away money to satisfy a want, you no longer have that money. That's what lets us speak of things like the velocity of money, time value of money, indifference curves, indeed the whole idea of being able to "value" goods and services because a currency of known & roughly constant value was traded away to obtain them.

If you're just interested in money as a score or means of signaling social status, you continue to have that money while deriving value from it. There are other systems that have this property - notably, productive assets (you can continue to derive income from land or capital without trading away that asset) and social status itself (bestowing some of your status on others near you actually raises your status, it doesn't give it away). But these systems function with very different dynamics than the classical competitive markets you'd study in Econ 101, or that TFA is describing. In particular, they're subject to positive feedback loops and winner-take-all results rather than equilibriums and stable prices that competitive markets produce.

Any form of investment is a positive feedback loop, and doesn’t produce some bizzare are ‘winner takes all scenario’. To the point made in the parent comment, wanting to buy a Wraith as a status symbol is a want just like any other, and is not a symptom of a dysfunctional market. Consumerism in general isn’t a symptom of a dysfunctional market, and I’d be willing to bet that the majority of the people who comment on HN derive their income from consumerism in one way or another. The nature of investments isn’t a symptom of a dysfunctional market either, for an asset to be productive it has to be generating some value, if an individual invests in an asset, they will never benefit from 100% of the productivity of it. The assets they invest in the economy will be generating income and wealth for others too, if we’re talking about a particularly wealthy individual, then it will be thousands of others. I’ve worked at plenty of funded startups, in each of those situations, the wealth of such individuals has been directly paying my salary.

"Wanting to buy a Wraith as a status symbol" isn't the scenario I'm positing. "Wanting to have a million dollars in the bank" or "wanting to be a billionaire" or "wanting to make 1000x on cryptocurrency holdings" is. There's a key difference - in the former case, a transaction has occurred, and now Rolls-Royce is $350k richer. In the latter case, no transaction occurs - the person's enjoyment is derived entirely from the number on their bank statement, not from any product that they bought with that number.

If their money is in the bank, you can almost guarantee that it’s being productive. If they withdraw all of it so they can keep a huge pile of cash in their house to look at, then your argument would hold. But the system highly incentiveses people to not do that.

And what happens when you use your francs to build a robot to make grain for you? You have all the grain you need and can undercut competitors, buy up their land and corner the market. It's the robot specs that become valuable. So how does the economy change when information becomes the new currency?

In the land of the blind, is the one eyed man king?

> What if money actually became more valued than what you can buy with money?

https://www.newsweek.com/hoarding-nickels-metal-prices-soar-...

To me, you were describing today's world. Maybe that was the point.

brilliant perspective. thank you for sharing.