Now consider money.  Money is abstraction of value. You get it for doing things or selling things to other people, and you send it to get things or get other people to do things for you.  Instead of trading a thing in itself, you trade this piece of paper, this coin or contracts for it.

What’s interesting about money is that the easier it is to spend, the more of it gets spent.  If you reduce the thought, inconvenience and risk of handling money, people are more likely to use it to get things.  Coins were invented in the 18th century to reduce the need for heavy gold, silver or platinum bullion for trades.  Cash, had a long and arduous trek up form company notes, through state notes and finally to national currency in the late 19th century. Paper currency just represented a certain weight of precious metals until the early 20th century, when we developed fiat currency to allow free trade between countries with vastly different stores of precious metals. Currency became a pure abstraction of value in relation to other currencies in the mid twentieth century. The credit card was not invented until the 1950’s. Banks charged stores 2-4% per transaction for the privilege of using credit cards, but most places paid the fee because making spending easier was well worth it.  Because of their ease of use, and therefore spending, low cost places that accepted only cash in the 1990s, like fast food restaurants, will gladly accept credit cards. Paypal and Online transactions allow us to buy thing s without touching them , and sometimes have them delivered to places we’ll never see.  The surcharge on credit cards is often no more than a mouseclick away, and banks are making hundreds of billions in the American economy from this, where consumption accounts form 70% of the economy.  Now we’re developing RFID implanted credit cards you can merely wave in the direction of the reader to have your account debited.  In countries without banking systems, cell phones are used to store and exchange credits and currency.  Your cell phone is your bank.  Don’t lose it.

When we are freed from the immediate responsibility of paying for something, it is easier to spend.  The mortgage itself is an abstraction of value, trading long term debt of immediate reward.  A century ago, if you wanted to won a building in most parts of America, you had to pay for it in cash.  The mortgage allowed buyers to afford homes they could never pay for at once, all for a regularly recurring interest payment.  When the market got lucrative in the 1920s, we developed things like Adjustable Rate Mortgages and Interest only mortgages to entice more people to e to buy things they would not have dreamed of.  With more Americans  suitably over-leveraged, the 1929 crash affected the entire world.


A few pounds