The fundamental money myth is that of money as the mere concept of its representation, which results from representational monetary identity—any monetary representation failing to distinguish between itself and its represented money. In addition to this fundamental myth, here we present three other money myths resulting from it: money creation “out of nothing,” money as the mere concept of an IOU, and money as either objective or subjective.
Money as the Mere Concept of Its Representation
Let us imagine that gold is the actual representation of money and silver is just its possible representation. Then, although money has no actual independence from its actual representation (gold), it has both:
Actual independence from its just possible representation: silver no longer or not yet represents it.
Just possible independence from its actual representation: instead of gold, silver could represent it.
This either actual or just possible independence of money respectively from its just possible and actual representations already can, despite still just conceptually, distinguish it from them. Such a minimal independence is precisely the conceptual distinction always required between anything and its representation.
Money Creation “Out of Nothing”
To create money, we need an object capable of representing it. Hence, we cannot create money “out of nothing”: we can only create it out of an actual, possibly monetary object.
We can create money out of nothing concrete, by representing it with an abstract object. However, even this abstract representation remains an object: whether abstract or concrete, any monetary representation must be an object of ownership.
Money as the Mere Concept of an IOU
A representation of debt is an object representing “I owe (money to) you”: an IOU.
Money can itself be an IOU. For example, when a commercial bank loans money deposited with it, this bank does not withdraw that money from the borrowed account. So the loaned money must belong to both its borrower and its loaner. Then:
To the borrower, an IOU becomes the loaner’s money.
To the loaner, the borrower’s money becomes an IOU.
This way, whether loaner and borrower are aware of that or not, their money has become an IOU. Thus, if I am the borrower and you are the loaner, this IOU is an object representing “I owe you” that money. So even as an IOU, our money remains what IOU.
Then, “I owe you” an… IOU: as long as we mistake debt for money, I owe you… the circumstance that I owe you… the circumstance that I owe you…
Money as either Objective or Subjective
The money I have in my pocket consists in paper notes, or bank notes. These notes have a monetary value, which belongs to me. However, the notes themselves do not belong to me (so I have no right to destroy them). They are public: they belong to society. While their monetary value is private: it belongs to me or else to whoever controls its representing notes.
It is precisely this monetary value—of the notes I have in my pocket—that constitutes money as distinct from its representation. It is just an abstraction—despite a social one—unlike the notes that represent it. Still, without this abstraction, its representing notes would have no monetary value.
So money must be both subjective, as a monetary value, and objective, as its representation: despite subjective, its monetary value must be social, which is impossible without its objective representation.