The Need for Money

“MONEY is the root of all evil.” Have you ever heard anyone say that? Actually, it is only part of the statement: “The love of money is the root of all evil.”a

Yes, it is true that much evil has resulted from the selfish thirst for riches. And the majority of crimes are committed to get these. Yet, where would we be today if money did not exist?

There was, of course, a time when money was not used. And even after it was introduced, its usage was limited and irregular. The agricultural households were then fairly independent and took care of their own needs. They would barter for any items they could not supply themselves, directly exchanging their own goods for those of another. Yet, some difficulties were encountered, particularly for one who specialized in a certain trade or was a hired laborer.

Jesus made mention of such workers in an illustration of a householder who hired men to work in his vineyard. (Matthew 20:1-16) The men hired received a stipulated amount of money, which reveals that the use of money was well established at that time. But just imagine if you were such a worker and instead of receiving money as wages you received a certain amount of grapes!

Now, you might love grapes, but you certainly would not want a steady diet of grapes. You would want a more substantial and varied menu, including meat and vegetables. You would also have need of shoes, clothing, and fuel, as well as other goods and services. So you would have to locate people who would be willing to trade those items.

But what if those people did not like or want grapes? Then you would have to find someone who would take your grapes and give you something else that you could exchange for the items you needed. The whole trading process might take longer than the time it took you to earn the grapes in the first place!

Another problem that arises is that of assigning values to the items exchanged. For instance, how many grapes is one chicken worth? How many for a pair of shoes? Every item traded would have to have a corresponding value in every other item. “If, for example, there were 1,000 different goods and services on the market,” says the book Money, Banking, and the United States Economy, “instead of 1,000 dollar prices being available to measure their relative market worth, 499,500 exchange ratios would be required!”

Not only is that a lot to remember, but the list would need constant revision and adjustment as situations varied. And if the item you have for trade, such as a cow, is worth more than the ax blade you wish to acquire, how do you settle the matter? Who gets the cow if you wish to use its value to purchase several items from various persons? How difficult transacting any business would be under such circumstances! A common denominator for exchange of goods or services would certainly be needed. Enter the need for money.

Money, therefore, serves the following basic functions:

● It is a medium of exchange that enables us to have easy access to the goods or services of others.

● It serves as a measuring rod of value​—a standard unit of account—​by which the values of all goods and services can be compared and expressed.

● It serves as a store of value, a means by which you can save, or accumulate, your earnings for later use.

The creation of money has made possible large, industrialized businesses with their vast array of consumer goods. By means of it, we have access to the latest and best of those goods and services. It is the lifeblood of economic growth, the factor on which commercial trade depends. Because of it, there can be extensive specialization.

“But money, which is such a useful and desired servant, at times misbehaves,” writes John A. Cochran in his book Money, Banking, and the Economy. “Money can be either a great blessing or a great curse.” Especially is this true in regard to the complex economy of our modern times, where fortunes can be made or lost overnight, businesses can rise or tumble, and governments can prosper or default. At the center of many incidents are those huge depositories of money​—the banks. Lately, banks have been failing at an unprecedented rate. Is there cause for alarm?

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