INTRODUCTION
Money but no Goods and Services
Robinson Crusoe, while rummaging the wreck of his ship for useful things, discovered some money in a drawer, “about thirty-six pounds value in money… I smiled to myself at the sight of this money.” What can you do with money when you’re alone on an island? But, Crusoe, although stranded, was a member of civilized society and could not resist, so, “upon second thoughts, he wrapped the money in a piece of canvas and took it away.” Robinson’s case was having money, but no goods or services to pay for. Having money is important in a modern society but not if there are no goods and services. Crusoe, a fictional character, was able to identify money and distinguish it from other useful possessions. He also knew it was not useful in his situation.
His situation was similar to the Israelites forty-year wandering in the wilderness. In their Exodus from Egypt, they borrowed huge amounts of gold and silver and carried it into the wilderness where no goods or services were available. It was worthless like Crusoe’s money, but not completely. The money was worshipped. With this gold they were able to make the golden calf to worship. Their case was having money and no use for it, (paying for goods and services) so they turned it into a god to worship. Money as a topic of discussion by Christians is at present the most difficult in the whole of theology. The main reason for this is the enormous amount of error and fantastic notions which Preachers and Christian writers have been publishing on the subject. They have written and preached more crazy ideas about money than any topic in Christendom. These ideas are usually taken from various disconnected verses throughout the Bible and offered as solutions to socio-economic problems in the present. This, they call Biblical Economics, and command Christians to practice it in the modern world. A good example of this was the world financial crisis of 2008 – 2012 when preachers of prosperity could be heard on Christian television saying there was no crisis since the children of God should only experience abundance.
PRESENT TEACHING ON MONEY
Some time ago, on Christian television, a televangelist took a ten dollar bill from his wallet and showed it to his audience,
“It’s nothing, only a piece of paper,” he exclaimed.
However, a few minutes later, after preaching, he was attempting to exchange his latest book for “nothing, only a piece of paper.”
This is typical of preachers and writers on money. In general, they give no acceptable definition of money, assuming their hearers or readers know what they are speaking about. Today, every Christian understand money as Robinson Crusoe did, in the sense of dollars, nickels, and dimes or checks, things we use to make payment for everyday wants and as the things the Church accepts as tithes and offerings. Some of us also know credit cards as the things we destroy when we want to get out of debt, but of other types of money we are generally ignorant.
The word money can be used in different senses. Much of the confusion could be avoided if the Church would have an acceptable definition of money. In today’s teaching currency, credit and possessions are lumped together and called money. No distinction is made by the Spiritual Leaders. In sermons and books, these terms are used interchangeably.
In addition, it is taught, there exists a connection between God’s Grace and earthly wealth with money being the medium of exchange. Poverty on the other hand is regarded as a curse. Christianity is now a religion of the rich and luxurious in which the riches of heaven are combined with the riches of the earth. It is no longer hard for the rich, young ruler to enter the Kingdom of God, but provision is made for him to keep his wealth, contribute to the Church and “come and follow after” Jesus. Zacheus need not return his ill-gotten gains but can enter the kingdom rejoicing.
Today, the emphasis is on “biblical economics.” The claim is there are certain principles prescribed in the Word of God for the use of money and Christians are bound to follow them. Other names given to Biblical economics are God’s financial plans and God’s financial management and other such variations.
The Church now accepts exclusively money, as tithes and offering. It has replaced all the other offerings that the Israelite had in the Bible and all the feasts which were social occasions. It ignores the fact that people may have other things besides money that they can give. Example their time, energy, effort, skills etc. This understanding of money has many limitations.
LIMITATIONS OF PRESENT MONEY TEACHING
It leads to the belief that you are poor if you do not have money and you are blessed if you are rich. If you can get some more money only then you would be acceptable and able to serve God properly.
No distinction is made between money and wealth.
We all want to be wealthy. We just don’t know what wealth really means. Having more money is not the definition of wealth, despite propaganda the Christian media would have you believe. There’s nothing wrong in driving the latest model sports car or live in a multi-bathroom mansion if you can afford them. But for most having them is more a curse than a benefit.
The joining of forces of Church and money has two equal and opposite effects.
First, it secularizes the sacred by giving greed and gain a foothold in the Church. Next, it provides redemption for the unholy business of the wealthy, sanctifies the money while using the plunder for holy purposes.
There is no biblical definition of money.
While it is known what the Romans used as money very little is known about what the early church used. There is no definition of money given by spiritual leaders instead every Pastor and Preacher is left to decide for himself and this has contributed to the great chaos among Christians.
Money develops within a society in response to the culture, religion and politics.
Society is conceived as a world of faceless men and women and the economy as the same faceless humans labouring and grinding to get money. To obtain it, men and women must labour and sweat in field, factory or office. It is believed that it is the money that creates things; it is the money and gain that motivates people to serve; is the “money that answereth all things.”
The teaching claims to be Biblical but in reality it is not.
It claims that it is relevant to all times but clearly originated in medieval times, when trade and exchange developed as never before. Writers and preachers tend to focus only on the positive effects of money, ignoring all the negative evils. Attention is paid to how money could be used to further the cause of the Gospel of Jesus Christ and how it could be used profitably to secure eternal benefits. Much emphasis is placed on the stewardship function of the money (and possessions) that God has entrusted to the Christian, but the deceitfulness of riches is never explored.
Money is regarded as neutral or at best as having positive effects on society. I believe that money is not a neutral phenomenon to be bypassed or taken lightly and it is difficult to control money and its part in shaping our lives. Whether we love it or don’t love it, we cannot be ignorant about what money actually does to us.
A BETTER UNDERSTANDING OF MONEY
Christians need to have an upgrade of their understanding of money. We need an understanding based on sound definitions and taking into account the passage of time from Bible times to present day. Any such understanding must conceive of the modern economy as a group of people co-operating in the production of goods and provision of services capable of satisfying their desires. Money is merely a medium of exchange to trade the goods and services produced. It will include a definition of the terms involved in money and finance, beginning with money itself.
A simple, working definition of today’s money, generally understood in every society and endorsed by economists is: anything acceptable as payment (or exchange) for goods and services and in the discharge of debt. The meaning of money then, is not financial, economical, or even biblical, but functional. From this we will see, the notes and coins that we use at a filling station or grocery store is money. The checks we write in payment for things is also money. This is the function of money!
A modern characteristic of money is that it must have no intrinsic value. So if there is something that has no value of its own, all persons are willing to accept it in exchange for goods and services and if all persons gave this thing in payment for what they owe then this thing is really money.
Money, properly understood, is intangible; it has been called a phenomenon. Although in history, commodities were substituted for money, serving some of money’s functions, money is not a commodity. It is not the material from which it is made. Gold and silver, when not coined, are commodities. Money is not gold, though gold may be used as money; there are times, in history, when gold was money and times when it was not. Although intangible, money takes countless physical forms and sometimes no form. Its nature is not easy to understand, for money gives no information about itself, except that it is money.
Notes and coins are examples of money, but they are not what money is; money exchanges involve no currency at all, but the transfer of figures from one account to another. Money is much more like a “verb” than a “noun”; it names functions and activities rather than objects or commodities.
Christians must realize today’s money is a matter of faith or confidence in the person paying. It is not trust in God, but trust in the institution issuing the money. It is faith in the banks that honors our check. Money is no longer a piece of metal inscribed with Caesar’s image (Mark 12:14-16). It is faith inscribed and it matters not where it is inscribed, be it on silver, gold, paper, or stone. A check has been written on a prostitute’s breast and on a man’s butt. Anything can serve as money, from the cowrie shells of the Maldives to the huge stone discs used on the Pacific islands of Yap. And now, in this electronic age, there is no need for anything to serve as money. It can be figures printed on paper, on a screen or stored on a computer’s hard disc.
Intangible money isn’t a modern thing, but has been around for ages.
For example, in the history books there are numerous references to a British coin called a shilling. The ancient British laws, of Ethelbert, King of Kent, in the year A.D. 600, says, that if any man in the assembly injures another he is to pay “fifty shillings to the King.” However, there was no such coin as a shilling until the year 1504, though there are hundreds of references to it before that date. This un-coined shilling was a money of account and was supposed to be one twentieth part of a pound-weight of silver. Hence, twenty shillings make one pound, though the pound is not of silver and does not weigh a pound.
Intangible money was also known by African tribes; we learn from J. S. Mill that there were tribes who computed the value of things by an ideal system. “They calculate the values of things in a sort of money of account called ‘macutes.’ They say one thing is worth ten macutes, another fifteen, another twenty. There is no real thing called a macute, it is a conventional unit for the more convenient comparison of things with one another.” (J. S. Mill, ” Political Economy.”)
Money and Wealth
Money is very often confounded with wealth. However, the money definition necessitates a differentiation from wealth, the latter being property that we own such as car, house, land, gold, silver, jewelry, financial securities, etc. In our everyday speech and in Church we use the terms money and wealth as synonyms, but the world’s monetary systems and the Bible does not.
In the Word of God money is viewed as a separate item from wealth. Wealth in biblical times was determined by possessions, herds, flocks, lands and precious metals; not holding of money. Today wealth includes all those things plus other financial instruments like stocks and bonds, etc. The example of Abraham showed he was rich in cattle, in gold and silver (Gen. 13:2; 23:16; only the silver was used as money in Canaan). He may or may not have been rich in money. In Jesus’s Parable of the Unjust Steward (Luke 16:1-8), the lord is owed something for which the steward had exchanged his wealth; oil and wheat. This something is money.
As a synonym for money, wealth is not associated with the spiritual dangers of money or with the nature and behavior of money itself but more with attitudes to wealth like greed, anxiety, worry etc. Discussing wealth tends to draw attention to certain forms of behaviour toward it and away from the behaviour of money itself. In this blog I wish to concentrate on money not wealth. The shaping and moulding power of money on human behaviour is important regardless of whether we have or are pursuing money.
Money is merely a title to wealth. It does not contain within itself wealth. It is the yardstick by which we can measure wealth or the exchange value of other material possessions. When we consider how much a wealthy person is worth, or how much riches he has, we must use some form of measuring unit. Money is the measuring unit we use to measure our economic worth. For example we may say that Peter is worth $1,000,000 or Paul is worth $10,000, this does not mean that they have that amount in cash, but that their material possessions including their money total these amounts.
Wealth is a product of labor. Money is a means for wealth to change from one form to another. For example, a farmer with one hundred acres of land thinks he has living in the barn too long. He may wish to exchange some of his land for a building, a better home. To do this he would first sell some of his land for money and then use the money to buy materials to build his new house.
The Purpose of Money
“…the use of money was devised as a matter of necessity. For not all the necessaries of life are easy of carriage; wherefore, to affect their exchanges, men contrived something to give and take among themselves, which, being valuable in itself, had the advantage of being easily passed from hand to hand for the needs of life; such as iron or silver or something else of that kind, of which they first determined merely the size and weight, but eventually put a stamp on it in order to save the trouble of weighing, and this stamp became the sign of its value. (Aristotle’s Politics, I. 9.)
Money is identified by its functions; that is, what it does; anything which performs the functions of money is money. The definition of it given above is easily understood even by non-economists and this is the one I will use in this blog. I will also be using the term “money and possessions” instead of wealth.
Money was developed for certain purposes in relation to trade or the exchange of goods and services. It was not created by God, but by men so that they could affect the necessary exchanges among themselves. There are many functions of money today and in this section I will describe the three main functions.
1. As a Measure of Value
Well, but what will you say to this question? (You know that there is no settled price set by God upon any Commodity that is bought or sold under the Sun; but all things that we buy and sell, do ebbe and flow, as to price, like the Tide:) How (then) shall a man of tender conscience doe, neither to wrong the seller, buyer, nor himself, in buying and selling of commodities . . . . . John Bunyan, The Life and Death of Mr. Badman (1680)
The goods and services that are traded must first be valued. Money is the measure of value. Prices, salaries, goods, services and wealth are all measured in money. Money, therefore, attempts to place a value on both God’s creation and the innovative man’s manufactured goods. This value is in terms of earthly units and is for the purpose of exchange.
Now, money is not necessary where the items being exchanged are perceived to be of equal value, but where they are perceived as unequal. Therefore, this function is only applicable to measure debt, credit and gains as we shall see.
In my country, Trinidad and Tobago, TT$ bills are the measure of value, and so prices are quoted in TT$. If we did not have money, prices of goods and services would have to be set in units of goods or services. Different prices might be set in different units, making comparison difficult. For example, suppose I needed a new stove and I want to pay the least possible price. I notice that one store sells a stove for 10 pairs of trousers and another store sells the same model for 20 pairs of shoes. It would be difficult to figure out which deal is better; I would have to know the prices of trousers and shoes. It could get even more complicated if I find that trouser and shoe prices are quoted in other commodities. Money as a measure of value makes life easier, although it is by no means a perfect measure of value. If TT dollars are the measure of value, I will see that one store charges TT$500 for the stove and the other TT$450.
2. As A Medium Of Exchange
This is its primary role, we use it as the medium of exchange; we pay money for goods and services. According to our definition, money is whatever a grocery store or filling station accepts as payment. Great inconvenience can be avoided if there is money as a medium of exchange for goods and services. In today’s economy, dollar bills and coins are two forms of money. The balances in our checking accounts are also money, because many goods and services can be bought by writing a check or accessing an account electronically. Stocks and bonds are not money because you can’t walk into a store and trade them for groceries. There are many other type of financial instruments that are not money because they cannot function as a medium of exchange. People will not accept them in exchange for their goods and services.
There is a great example of money as a medium of exchange in the Bible:
Thou shalt truly tithe all the increase of thy seed, that the field bringeth forth year by year. And thou shalt eat before the LORD thy God, in the place which he shall choose to place his name there, the tithe of thy corn, of thy wine, and of thine oil, and the firstlings of thy herds and of thy flocks; that thou mayest learn to fear the LORD thy God always. And if the way be too long for thee, so that thou art not able to carry it; or if the place be too far from thee, which the LORD thy God shall choose to set his name there, when the LORD thy God hath blessed thee: Then shalt thou turn it into money, and bind up the money in thine hand, and shalt go unto the place which the LORD thy God shall choose: And thou shalt bestow that money for whatsoever thy soul lusteth after, for oxen, or for sheep, or for wine, or for strong drink, or for whatsoever thy soul desireth: and thou shalt eat there before the LORD thy God, and thou shalt rejoice, thou, and thine household, Deuteronomy 14:22-26.
Notice the exchanging of the tithe of the crops, herds and flocks for money, then going to another place designated by God and converting the money into goods before consumption. Notice, too that the money is just a medium for getting the goods to another place; it is not part of the goods being exchanged, nor is it being tithed.
3. As a store of value
As a store of value, money is of a form which people can hold wealth. To understand this function, think about a fruit farmer. If his farm is more productive than is usual in a particular year, he may decide to set something aside for the next year when times could be harder.
The farmer can’t save the extra fruit he produces, it will rot, making it worthless. Fruit is not a good store of value. The solution is to exchange the extra fruit for money. If the farmer keeps the money in a safe place, he will have it next year when he needs it and it can be exchanged for whatever he needs.
Money’s store of value function has become less important in advanced economies. The financial system has produced instruments with returns higher than money. In most economies today, holding money is better than holding fruit, but holding some other security is best, because it pays more interest or dividends. People with financial knowledge use money as a medium of exchange, but they hold most of their wealth in other assets.
Exceptions occur mainly in poor countries. In some places the financial system are not as developed so that few assets are more attractive than money. In Trinidad and Tobago the financial systems are not as developed or as volatile as in the United States so people hold much of their wealth in cash. But there is a twist: most of this cash is foreign currency, United States dollars, rather than the local money TT$.
Who Owns the Money
Money existed and was used as an instrument of exchange before coinage and paper bills had been invented. Then, whoever held it was its owner.
In the subsequent period coined money was used and did all the work of money before any act of legal tender or any legislative regulation had been conceived. When money was first coined, it belonged to the king or ruler whose image was on it (Mark 12:16, 17); and money tokens were at first regarded and used as a means by which taxes could be conveniently paid and tribute rendered. The affairs of State were thus first served by money, and afterwards commerce discovered in it a suitable medium of exchange for goods and services.
In modern times the person or institution issuing the money owns the money. In most countries this is the Government or some banking institution it has designated for this purpose, example the Bank of England or the US Federal Reserve System and the US Treasury. It says on US bills “In God We Trust” but the person you are really trusting when you accept one of these in payment for your good or service is the Secretary of the US Treasury and by extension the Chairman of the Federal Reserve System. When anyone exchanges his goods or his labour for US money, he is essentially trusting Steve Mnuchin, Secretary of the US Treasury and Jerome Powell chairperson of the Federal Reserve System since February 5, 2018, under the presidency of Donald Trump (at the time of writing). Every country has its counterpart to these people. In my country of the Republic of Trinidad and Tobago that person is the Governor of the Central Bank of Trinidad and Tobago currently Dr Alvin Hilaire who was appointed on the 23 December 2015 to a term of five years.
Who Owns Your Money In The Bank
Most people believe the money they deposited with a commercial bank belong to them. Well, they are wrong! Legally, it belongs to the bank. When you make a deposit into your bank savings account, the bank does not keep your money in a vault or strong box like we see in the old western movies. Instead the bank records it as their money and take legal ownership; at the same time they record the liability to you. In accounting and finance, this is called the double entry system. It is a liability to them because at some time they will have to return it to you.
Who Owns The Money You Have In Your Hand
Money is no longer backed by gold. In the United States, the “Gold Certificate” label on paper money was replaced by “Federal Reserve Note.” What does that mean? It means that today’s currency is fiat money, money with no intrinsic value. Fiat money cannot be made into jewellery, baked into bread, smoked or otherwise put to use and it is not backed by any commodity. No government or bank has promised to exchange anything for your bills. These bills are money “by fiat,” which means the government has simply declared it to be money. “Gold Certificate” meant that money could be traded for gold, but “Federal Reserve Note” doesn’t really mean anything. It’s just a label for a worthless piece of paper representing the debt by the entire society to the holder.
From a Christian point of view, it might seem odd that people trade goods and services for fiat money. Take a construction worker, for example. He works hard all day using his strength and energy and often endures long hours of strenuous activity. What does he get in return? Nothing he can eat or wear. His employer gives him a fistful of worthless pieces of paper. Why does he bother to work? The answer: he can trade the worthless pieces of paper for things he needs or values. The paper is a medium of exchange. The baker will give him bread for the worthless paper because the baker knows that others will accept the worthless paper from him. With fiat, people accept worthless paper because everybody else does. Thanks to this behavior, dollar bills serve their purpose as money.
Today’s fiat money, such as paper money, is still intrinsically worthless, but is deemed to be money by the Government. Paper money circulates, but it is not backed up by anything other than the Government’s promise that it will refrain from printing too much money so as to make it entirely worthless. Since Bretton Woods and the demonetization of precious metals, money the world over is fiat. The problem is sometimes governments break their promise.
Money’s True Nature
What makes something like paper, copper, or silver, money is not its quality or intrinsic value, but the functions they perform in human economy and society. This is clearer now that there is no relationship between currency and precious metals. A set of social, cultural political and economic, arrangements are required for the money to operate. Therefore, human societies and their money evolved together, the nature and functions of money changing through time within cultural, economic, societal and political contexts. For this reason we cannot import wholesale what the Bible says about money and apply it to your own situation, indeed this could not be done for any other historical period. Money in the Biblical period operated under a different set of socio-economic and political arrangements which differ considerably from that of today.
Today, money is regaining its true nature of a right or title to acquire some satisfaction in the future. This satisfaction must be in the form of goods or services from someone else. When you accept money in exchange for another commodity, you cannot eat, drink, wear, or shelter with it. In addition, it provides no satisfaction for the product you have given up or the labor you have put out. You agreed to accept it in exchange for your goods or services, because you believe or have confidence, you can exchange it for some satisfaction, at any time you please in the future. This is actually Credit and a kind of security. Money itself is nothing but a kind of Security, which we receive upon parting with our goods or services. It is hope or assurance, that we shall be repaid in some other or even the same commodity in the future.
How True Money Works
You provided me with some goods and in return I gave you a hundred dollars. You now have a hundred dollar bill in your hand. What does it mean in your hands? It is evidence of you having provided some goods to a member of society and you did NOT get some other goods in return. You have allowed me, another member of society, to enjoy your goods. This hundred dollar bill states the value of the goods you provided to me and also witnessed you received nothing in return from me; an equivalent of goods or services, as is your right in an exchange.
The bill also gives you the right, to goods or services to the value of one hundred dollars from anyone in society and you can exercise that right when and how you please. Our Society, by my hands, has given you a title, in the form of an hundred dollar bill, to goods or services sometime in the future. Society owe you this amount of goods and services.
It follows that the more fiat money a person has the greater the amount of goods and services he has right to at his time of choosing. Everyone in society is indebted to him for this amount. The receipt of payment issued by a single person is securely guaranteed by the entire society. Whoever is holding the money is more advantaged to keep it as long as possible rather than present it for collection.
Notice also, if profit is ignored, you are not richer because you have the hundred dollar bill, because you had to give something, goods or labor, of equivalent value to get it. Money, therefore cannot make you rich unless you acquire it but did not surrender an equal amount of goods or services.
Another example: Take the case of an American woman vacationing in Europe. How does she live there? European Society feeds, accommodates, entertain and do for her many other things. For all these things, requiring labor, travel arrangements, and commercial operations, what goods or services did this woman give to European Society? NONE. Why then are all these people performing actual services and giving their goods to her?
Her husband is a medical doctor who rendered services to American society and received, not goods and services, but money; the right to demand other goods and services, in the future, in the place, and in the form of his choice. It is for these goods and services society is paying today. A number of operations took place to reach this result, and all persons doing these operations were compensated for their pains. The rights accumulated by her husband have passed from hand to hand culminating in the consumption of this woman.
CONCLUSION
We desire or demand stuff for the satisfaction they give, but only desire money as a means of getting stuff. Money represents debt; or services due to the its holder, and it represents the right or title, which its holders have to demand some product or service in recompense for some service they have done to someone else.
As long as nations continue in a low state of civilization, all the Money, or Credit, is made of some material substance. But when they advance in civilization they make use of intangible money. At this point in our development, the world is a global village and fiat money is almost universal and necessarily so. We are obliged to use money every day to live, it may no longer be possible to pursue self-sufficiency to the point where we don’t use money.