Economics, Equity and the Ecological Predicament
Edited by Joshua Farley and Deepak Malghan
Chapter 11: Making money
Everyone knows that money is important. In some sense we all ‘know’ what it is. We have some of it in our purses or wallet and more in our bank accounts. We use it to pay for things we want. We keep some in the bank so as to be sure that we will be able to pay for things later. Since the bank will give us currency when we ask for some of our money back, we think of the money that it holds for me as being an extension of what we carry with us. The fact that generally we use checks and credit cards rather than cash does not seem significant. Many of us have assumed that the paper money in our pockets is made by the government. We see that it consists of ‘Federal Reserve notes,’ but we have assumed that the Federal Reserve is part of the government. We earned it by working, and we spent some and saved some for a ‘rainy day.’ Basically we have understood money as a medium of exchange. We have supposed that the bank accepts our money partly for safe keeping but also in order to lend it to others. It pays us a little interest and charges the borrowers more. That has seemed reasonable and proper. If we have quite a lot of savings, we may lend some to a business or to governments in order to receive a higher rate of interest.
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