Why do we continue to use money?

Question

As I continue to look at the world around me, and take a look at the money within my pocket, I seem to continually realize how worthless money is within our society today. Although it's harder to see individually, but as you look to countries' net imports and exports, it becomes more and more vauge as to why we continue to use money within a globalized economy. As companies continue to expand overseas, their services are no longer benefiting any one country, but two (or more even). Individually, money is (in my mind) becoming less and less of a means of exchange as it is a hassle. So here's my question again: Why is money still a prominant factor within our society? Why can't we eliminate it?

Answer 1

Simply because 'paper money' is the most liquid source of transactions, and if you look at the other alternatives like plastic money etc they are not easy to adapt with our day to day transactions.

Answer 2

Looks like only intelbam tried to answer your question. The other answers really suck. I can´t see how money is a hassle. Unless you are able to produce everything you need and/or use in your life, you need something to use as a mean for transactions. I guess it is more of a hassle to buy a hamburger paying with 9 pens, or 53 buttons. What is your employer going to pay you with? Are you gonna work for the same basic basket of food?

I think you mean why are we still using "physical" money (bills and coins) instead of "electronic" money. Sure, you can go to an electronic store and buy a plasma TV with your credit card. But what happens with a store that has a very little margin of profit. Installing a system to recieve customers credit cards has some costs implied. So they would rather not install it and recieve only cash. Flea markets, hotdog stands, the little girl selling lemonade or cookies.

Cash also gives individuals some kind of privacy. Someone may want to surprise the wife with a Carribean vaction in a couple of months. He may want to pay cash so that the charge dosenpt appear on the credit card balance. Not to mention if you buy something that you might me ashamed if others find out.

How would you tip a pizza delivery guy, or the bell boy that carried your luggage?

Hope that helps.

Answer 3

We can eliminate it, if you'd prefer to return to a barter system.

The current fiat system is not perfect (the exchange does not necessarily meet the real value of goods and services, i.e. The Economist's "Big Mac Index") but it comes very close.

The fact that it is a free market means that, generally, global finance institutions do a good job judging real value. Remember, to invest in the United States you need to have dollars. Therefore, if investment opportunities in the US are good, the demand for dollars goes up. And supply also plays a big factor, the dollar circulates more than any other currency.

Answer 4

Money is what we use to overcome the transaction costs associated with barter. Even check cards, credit, and other forms of exchange are based on money.

How would we engage in trade without money?

Answer 5

If we got rid of it, then essentially everything would be free. And people would probably be greedy and take lots of free things. In order to produce those free objects, people must work. And if the workers aren't getting paid, why would they work??

Answer 6

Can trade goods without money.

Answer 7

you are right, using money to pay is old fashioned, that is why i use a credit card. everybody should from now on use visa or master card.

Answer 8

Because the honor system doesnt work yet.

Answer 9

money is the thing i love most man no matter how immoral

Answer 10

wow ok i save my monney