What is Money For?

By Ezra Pound

"We will never see an end of ructions, we will never have a sane and steady administration until we gain an absolutely clear conception of money. I mean an absolutely not an approximately clear conception.

I can, if you like, go back to paper money issued in China in or about A.D. 840, but we are concerned with the vagaries of the Western World. FIRST, Paterson, the founder of the Bank of England, told his shareholders that they would profit because "the bank hath profit on the interestof all the moneys which it creates out of nothing." What then is this "money" the banker can create out of nothing"?

Let us be quite clear. Money is a measured title or claim. That is its basic difference from unmeasured claims, such as a man's right to take all you've got under war-time requisition, or as an invader or thief just taking it all. Money is a measure which the taker hands over when beacquires the goods he takes. And no further formality need occur during the transfer, though sometimes a receipt is given. The idea of justice inheres in ideas of measure, and money is ameasure of value.

MEANS OF EXCHANGE

Money is valid when people recognise it as a claim and hand over goods or do work up to the value printed on the face of the ticket, whether it is made of metal or paper. Money is a general sort of ticket which is its only difference from a railway or theatre ticket. If this statement seems childish let the reader think for a moment about different kinds of tickets.

A railway ticket is a measured ticket. A ticket from London to Brighton differs from one for London to Edinburgh. Both are measured, but in miles that always stay the same length. Amoney ticket, under a corrupt system, wobbles. For a long time the public has trusted people whose measure was shifty.

Another angle. Theatre tickets are timed. You would probably not accept a ticket for Row H, Seat 27, if it were not dated. When six people are entitled to the same seat at the same time the tickets are not particularly good. (Orage asked; Would you call it inflation to print tickets for every seat in the house?) You will hear money called "a medium of exchange," which means that it can circulate freely, as a measure of goods and services against one another, from hand to hand.

GUARANTEE OF FUTURE EXCHANGE

We will have defined money properly when we have stated what it is in words that cannot be applied to anything else and when there is nothing about the essential nature of money that is omitted from our definition.

When Aristotle calls money "a guarantee of future exchange" that merely means that it is an undated ticket, that will be good when we want to use it. Tickets have sometimes stayed good for a century. When we do not hand over money at once for goods or services received we are said to have "credit". The "credit" is the other man's belief that we can and will some time hand over the money or something measured by money.

Most men have been so intent on the individual piece of money, as a measure, that they have forgotten its purpose, and they have got into inextricable muddles and confusions regarding the total amount of money in a country. A perfectly good hammer is useless to pick your teeth with. If you don't know what money is FOR, you will get into a muddle when using it, and still more will a government get into a mess in its "monetary policy".

Statally speaking, that is from the point of view of a man or party that wants to govern justly, a piece of money is a ticket, the country's money is a mass of tickets for getting the country's food and goods justly distributed. The job for a man today who is trying to write a pamphlet on money is not to say something new, it is not to think up something or prove a theory, it is SIMPLY to make a clear statement about things that have been known for 200, and often for 2,000 years. You have got to know what money is FOR." (snip) ...

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