Money has one single purpose: to facilitate transactions. Money has value because people perceive it to have value. I know i can spend my 20 for 20 worth of good in my local shop because i know that the shopkeeper also knows he can spend my 20 for 20 worth of goods somewhere else. Money replaced bartering by creating a common platform with a common value.

We earn money roughly in proportion to what we 'give' to the society/economy/world, i.e. our labour, our energy, our ideas, our talents etc, and we can use money to purchase the resources of other people. Only people have money and only people receive money - companies, banks, government etc are simply conduits than channel the money to other individuals in proportion to their input/contribution/'giving'. These conduits form a market which spontaneously and without planning allocates money and resources efficiently and perfectly.

Money freed us from subsistence living by creating a common currency. This enabled us to enter into transactions with companies, whereas barter required a direct negotiation with an individual - i.e. money does not require negotiation but can purchase the services of hundreds or thousands of people without agreement between all the individuals involved in the transaction. In this way money and markets enable trade with people of different races, colour, religion, language and countries through the impersonal mechanism of prices.

Money is perhaps the most simple and most sophisticated system ever to exist!

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