More specifically, money is a way to get the labour moving so that people dont have to finish completing the product before exchanging it for something else they value.
It is also a way to get around the fact that you might not be able to exchange the stuff you have with the stuff you want directly.
So money is a placeholder. Placeholder both for time, and for assets.
So everytime money is created, it represents a product that someone wants and willing purchase.
As soon as the full transaction is completed the money should get removed from the system.
Example:
You build houses but you need apples to eat.
I pick apples but I need a house to live in.
I cant save up all the apples you need before I ask you to build a house.
You cant start building the house without being sure you will get all the apples.
So we introduce "money". Its just pieces of papers that promises that I will pay you an apple each. You take the piece of paper, you build the house and you can exchange those pieces of paper to with tradesmen who also want apples.
Whenever anyone brings that piece of paper, I give them an apple and I tear away that piece of paper.
At the core, this is all the money is needed for. Instead of each person giving his own pieces of paper (thats quite possible, but you need incentive to make sure people keep their promises - like debtors' prison), you have the government give pieces of paper that promises gold / silver / energy etc.
But the point is, money should be created when a certain amount of labour is necessary, and it should be destroyed when that labour is completed.
More specifically, money is a way to get the labour moving so that people dont have to finish completing the product before exchanging it for something else they value.
It is also a way to get around the fact that you might not be able to exchange the stuff you have with the stuff you want directly.
So money is a placeholder. Placeholder both for time, and for assets.
So everytime money is created, it represents a product that someone wants and willing purchase.
As soon as the full transaction is completed the money should get removed from the system.
Example:
At the core, this is all the money is needed for. Instead of each person giving his own pieces of paper (thats quite possible, but you need incentive to make sure people keep their promises - like debtors' prison), you have the government give pieces of paper that promises gold / silver / energy etc.
But the point is, money should be created when a certain amount of labour is necessary, and it should be destroyed when that labour is completed.