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MONEY DOES NOT CIRCULATE
By Marc Gauvin Copyright 19082013
Reproduction in full expressly granted provided attribution and original link is provided
Proof that money is not an object that circulates but rather an annotation like a score card:
Since we annotate transactions in pairs a positive against a negative i.e. when A buys real goods and services from B valued at say 100, A annotates -100 and B annotates +100, it gives us the false impression that A's "stock" increases B's. However, if we consider the very first transaction of such a system where logically A and B each have zero balance, it becomes clear that there is no such transfer of a finite "stock" since none previously exists!!!
Hence money is not a circulating thing but rather it is an annotation of the value of the real goods and services which are the only things that "circulate". Temporarily representing our positive annotations on mobile objects (bills and coins) further ingrains the false model of money as a "stock". But just realising that all such coins only exist as subtractions from one or other account the difference between the logical function of money as a record of a measure of value and the arbitrary physical support used to communicate particular records is made evident. Moreover, it also becomes clear that there is no logical reason for limiting the logical function of recording measures on the basis of the nature of one or other physical support.
The common subtle misconceptions of money are what create arbitrary limits to our prosperity and security.
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