Money: A Store Of Value Or a representative of Relationships?

Some things simply cant be valued. Its an exercise in futility . Its all based on perception, expectation and prior experience. This is most evident when it comes to prices of consumables. A bottle of tusker in Nairobi ranges from 80/- to 320/- depending on the premises you are sipping it at. The more money you have, the more you are expected to spend on the same thing.

I remember a story I was told of how money is really a representation of relationships and nothing more. Its not a store of value or a form of exchange as is commonly aluded. Here is the story as I remember it.

In a sleepy rural town somewhere in Europe, everyone was in debt and the mood was just gloomy with the residents wondering how it would work out.  Just when some were about to declare bankruptcy, a  rich foreigner shows up at the local hotel and decides to book the most expensive room for a week. He pays the 100 Euro fee upfront for the room, takes his key and heads for the stairs to go to his room. The hotel owner lady is super happy since she owes the local butcher 100 Euros for some meat he delivered a while back. She takes the note to him and the debt is cleared. The butcher in turn owes the local farmer for some pigs he delivered a week ago. He promptly pays his debt with the same note. The farmer is relieved because the town blacksmith was getting impatient with the money owed to him for the new hoes and plough he made the farmer. He rushes the bank note to him and clears his debt. The blacksmith in turn had been getting increasingly unconfortable seeing as Melinda, the call girl had been showing up at his shop rather frequently and tongues had started wagging. She was owed money by the blacksmith for several nights of service. He promptly delivered the cash to her and walked away smiling to himself for a good riddance. The call girl wasted no time and took the bank note immediately to the hotel owner seeing as she had been renting out the hotel room on credit when she came with a client. As soon as the call girl left, the rich man came down the stairs having not been satisfied with the state of the room and asked for his money back.

The hotel owner handed it back to him and the rich man left the town headed for the next one to look for a better room.

Now the whole town is debt free, people are happier and yet no actual money has been injected into the system or left with the people. The need was for a flow and the 100 Euros circulating cleared everyones debt and left people happier.

This is what convinced me that maybe just maybe the theory of money as a people connector may be right.

Think about it. Banks actually do nothing for economies other than play with money and generate no actual value but are the most consistent holders of power. They are consulted for everything. I think it is because they are a facilitator of relationships. They connect people through the medium of money and thus grow the economy by ensuring circulation of the percieved holder of value; money.