In the economy it is all about goods and services. You need food to live, transportation to travel from A to B, and so on. Isn't the economy all about money then? In a certain sense, no. Imagine that you’re a millionaire stranded on a deserted island in the middle of you-know-where with a suitcase full of money. Your money would be worthless.
This example clearly shows: money in itself isn’t worth anything. Money is nothing else than a kind of bookkeeping system to keep track of who still has to receive an amount of goods or services versus who still has to deliver those. The first person has money, the second person has an obligation (a debt).
This view is connected with the following. In practice, it leads to peculiar situations when we want to make money with money. In other words, when we treat money as if it’s a commodity. That leads to speculation, a form of gambling that produces nothing for society.
We treat money the best way when we bring it into a circulation that we control ourselves. This way, money can do its job and bring about all kinds of things.
What can we do with money?
All in all, we can use money in three different ways. We can use it to buy things, for example the food we need each day. Then we are using money as purchase money: with it, we make economic production possible.
We can also save our money. In reality, that means the money is lent. When this loan money is given to an entrepreneur in the form of credit, it is used well. The entrepreneur can use it to start his company or to realize a necessary expansion. This way, loan money makes it possible that entrepreneurs can dispose of their essential tool: capital.
Then there’s a third way in which we can use money: we can give it away. Gift money has a special quality: it can be spent in a free, unrestricted way and in doing so, it makes future development possible.
Imagine the development that’s (potentially) produced by sectors such as education, art, and science. They develop seeds for the future. And because these sectors do not generate money or profits through their own activities, they are dependent on outside money, which means gift money.
Gift money does not deliver guaranteed or immediate results, but it ensures that people can develop their capacities, leading to new inventions and knowledge. These are the seeds for the future of any society. Gift money is like the seed the farmer sows on his land…
When looking for a healthy way to deal with money, we could imagine a cycle of money. Money is ‘created’ in connection with economic activity, and is used in first instance to keep that economic activity going (in the form of purchase money) or to expand that activity (in the form of loan money).
When enough people want it, we can also take care of people who do not contribute (anymore) to economic production, for example children or the elderly.
Moreover, areas such as education, arts or science can always use money: in these areas, (gift) money can always be used productively. Even more so: it’s a necessity there.
To make sure there’s no money glut, it is important that money is directed to the end of the cycle, and that it is then donated.