Money Concepts: Money as a Tally of Goods and Services
Executive Summary
- One view of money the modern view. However, another view is that money should only be considered and used as a tally.
Introduction
To tally means to count. Tally sticks were named such as they counted the goods and services that the government purchased as part of its spending.
The Tally Sticks Versus Precious Metals as Money Model
The gold or precious metal model of money, where money has an intrinsic value, has not proven to be an effective money model. Instead, money is a public good and a “tally” of goods and services. Tally sticks were advances on taxes to be paid. Soon, as with money set up as payment for taxes, they became used as a means of exchange.
This is explained in the following quotation.
“Tally sticks have no real sound value themselves and cannot become scarce. They’re just a measure of the goods and services in the market. By collecting 18 tallies for 18 baskets you have kept your baskets private stable and you now have extra money to put in your straw mattress for a rainy day.
When you need extra tallies to build a larger house you borrow them from the accountant who tallies the debt when in accounting entry, you pay principal and interest on this loan by increasing your basket production in trading the additional baskets for additional tallies who pockets the interest. There’s no shortage of tallies as they are pegged to the available goods and services. They multiply along with this real wealth, but they don’t inflate beyond real wealth. This is because tallies and wealth goods and services are come into existence at the time when you are comfortable with your level of production, say 20 baskets a month.”
Source: The Web of Debt
https://www.amazon.com/Web-Debt-Shocking-Truth-System/dp/0983330859
Commodities Versus Money
People often propose to use either a commodity (gold, silver) as money. The concept is that the commodity has value. Therefore, the leap of logic is to make a paper or portable money “backed by” the commodity of value. However, a good form of money is not itself inherently valuable. And there are few examples of commodities being used as money in history. The most workable theories of money are called either the credit theory, state theory, or the seignorage theory of money. All of these theories state that money is a type of social credit.