Honest Money – Biblical Principles of Money and Banking
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Honest Money
Biblical Principles of Money and Banking
By Dr. Gary North
Honest Money by Dr. Gary North is about where money originated from, the value of money, and the uses of it. It was written so we may have a better understanding of the value and purposes of money.
Daniel Defoe wrote a novel about a man whose ship sank, and who ended up on a deserted island for twenty-eight years. Economists use this book as an illustration about economics. They use it to show that in a world of almost nothing, a person has to make choices about how to achieve his goals and that value is based on or influenced by personal feelings, tastes, or opinions and is dependent on the mind for existence. The value of something is in terms of what he thinks it will produce for him in the future. A real historical example is the famine era in Egypt, when compared to the value of life-giving grain, money was worth nothing. In that land, voluntary exchange took place. That meant that people evaluated what the other had as more valuable and the exchange took place. That was when grain became the new form of money. Grain became the new money because it had five characteristics all forms of money have. It was divisible, portable, durable, recognizable, and scarce. If people couldnt trade forms of money, they couldnt specialize in production and increase their personal wealth. This is why people have always traded.
One of the earlier things people used to trade with was gold, which was referred to several times in the bible. It was probably where money originated from, since it had the five characteristics of money. People want to know that this is where money originated from because if we didnt know anything about moneys value in the past, we would not except its value today. Gold became one of the first common uses of money, because people recognized its beauty and close connections with the gods. Before it became money though, it was a commodity.
Having money, wether gold or otherwise, means having to pay taxes. The state has the power over taxes. It also has the power to influence the value of a kind of money and the popularity of it, because the state is a big buying and seller of goods and services. However the state cant create money and impose it on the market if market participants dont want to use it. While the state influences money, they are not a committee to tell the market what to produce. This is called free market activity, which is described as a process of learning. With no one to tell us what to produce of how to market it, we have to learn things on our own. What we learn, we can profit from later.
In old testament times, people would exchange an item for another item that was