the value of a dollar

the value of a dollar

     When we talk about foreign trade we can understand what makes our money--American dollars--"worth" something to people in other countries. It is worth something to them because they can exchange it for something that America has that they want to buy. What makes our money worth something to us here in America is in many ways the same. Money is worth what you can buy with it. What puts the "value" in money?  Many people believe that work puts the value in money. There are things, of course, but they are usually made or obtained through work, or "labor" as a textbook would put it. Marx would have said that "capital"--money or the capacity to borrow it--is "stolen labor". Calling money "stolen" from labor is an extremist point of view. Money or "capital" as "stored" labor is actually a more accurate definition.
     Historically, we didn't actually "need" money--coins or bills--until we were doing so much trade with one another that using money would  make the trade easier. When people were exchanging the occasional cow for two sheep, they got along fine without money. The only people doing the "exchanging" would have been those with something extra to "trade". People using all their time and work just to survive had nothing extra to trade.Those who had some extra--for whatever reason ( more sons to help with work, thinking up a better way of farming )--eventually wanted to trade it with someone else. The trade became cumbersome when there were more people involved. The person with the cow to trade might not have wanted the two sheep--the sheep owned by the person who wanted the cow.  The person with the cow might have wanted a horse--owned by a person who wanted the sheep. It would work if they were all present, and all ready to deliver the goods. Money made it possible to store and save excess labor when there wasn't anything to trade it for--perhaps because not enough other people had an excess, but perhaps because all of the local farmers were growing the same thing. The person with the excess labor--turned into livestock, grain, or other stuff--could store it as money for use later. It could be saved for a bad year, in case of injury, or to get something that would cost more than one cow.