[One Sip of a Book] Human Desire: "What Is Money?"

Some sentences encapsulate the entire content of the book itself, while others instantly reach the reader's heart, creating a connection with the book. We introduce such meaningful sentences excerpted from the book. - Editor's note

As a veteran banker who has worked for 20 years at the Bank of Korea, the central bank of the Republic of Korea, and has encountered various forms of money and countless people's lives, he published this book to help a generation that has lost direction in life before the tilted scales of 'life' and 'money' by presenting the most balanced way of adjustment within the question 'What is money?'. First, difficult economic terms are defined intuitively and simply, and by crossing the boundaries of various disciplines such as history, philosophy, and culture, the book helps readers take a macro view of the 'structure of money' by providing diverse and interesting examples within the humanities. It also offers a framework to reflect on human morality through the value of money and human desires that have changed throughout the repeatedly recurring history of crises.

In economics, the three functions of money?medium of exchange, unit of account, and store of value?can also be described as the liquid properties of money. As a medium of exchange, money functions as a means used to trade goods and services. For this, money must be convenient to carry and accepted in a wide range of transactions. As a unit of account, money measures economic value and indicates the prices of goods and services. This allows the value of all goods to be measured by the amount of money exchanged for them. Lastly, money functions as a store of value because it has high liquidity and its value remains stable. Therefore, if money fails to properly perform even one of these three functions, it cannot serve as currency. _〈Money Transforming in Various Forms〉 p23

On Yap Island in the South Pacific, a stone currency called 'fei' was used. These stone currencies varied in size from about 30 centimeters in diameter, roughly the size of a plate, to as large as 3.5 meters in diameter and weighing up to 4 tons, resembling boulders. A hole was drilled in the center of the stone like a millstone so that a rod could be inserted to facilitate moving it. The larger and heavier the stone, and the harder it was to obtain, the higher its value. However, the important point is that because the stones were so heavy, the people of Yap Island completed transactions simply by recognizing the change of ownership without physically moving the stones. This was possible because such an agreement existed among the people of Yap Island. _〈Money as Promise and Debt〉 p33

"Money, like other elements of civilization, is one of the oldest artifacts. The origin of money must be traced back much further than we think. It is only that the relics that could reveal the origin of money have disappeared because the ice melted during the interglacial period." This is the statement of economist Keynes. As he said, money has a very long history. Just as a person passes through childhood, adolescence, middle age, and old age, money has grown and evolved along with human history and continues to evolve today. Looking at the appearance of money, it is developing into increasingly invisible forms, and accordingly, people's perceptions of money are also changing. _〈History of Money〉 p47

People trust currency because its value is stable. However, we think that money itself has some inherent value. The reason we think so is that the issuer of the currency promises to guarantee the value of the amount indicated on the currency at any time. This is the fundamental nature of fiat money. But it is important to note that the government does not guarantee the value of money. What the government guarantees is only the status of money as a means of payment. Instead, the government manages the value of money. The central bank intervenes by adjusting interest rates and the money supply to maintain an appropriate value. When the value of money stabilizes in this way, pricing becomes possible. _〈Value and Price〉 p96

What is Money | Written by Jo Byeong-ik | 21st Century Books | 344 pages | 19,500 KRW

This content was produced with the assistance of AI translation services.