Money provides a universal utility converter-it enables one person's economic needs and wants to be translated into the same units as someone else's needs and wants.
-Eric D. Beinhocker, The Origin of Wealth, p.276

    We might sup-pose that we all know what money is. After all, as financial planners, independent business people and 21st century citizens of Planet Earth, we spend our days engrossed in the stuff. So do most folks, of course. We are just obviously more so.
Yet, at the end of the day, what do even we know of it?  How well do we understand it?  How does it function?  Where did it come from?  Who invented it?  How did it develop, historically?  How did money get to be as it is today?  As financial planners, what ought we to understand of it?  

Clearly, money is an ever-present aspect of our professional lives. We know its movements and nuances, its risks, rewards and particular applications, how to grow it and, perchance, our risks of losing it or outliving it. We read about it. We develop our knowledge of it. We worry about it.

Yet, what do we know about it?  It seems money is frequently reluctant to reveal its seductive mysteries even to those of us who proudly proclaim our expertise.

For example, do we even know what it is?  Over the years, I have asked various audiences "What is money?" People generally answer in terms of intransitive verbs, using descriptions of money's functions. They will tell you that money facilitates the exchange of goods and services. On rare occasions, someone might observe that money functions as a storehouse of value or as an accounting tool. Or, they will tell you with straight faces and wistful new-age gazes that money is "energy."  When I ask if they could take "energy" to the grocery store without the implicit money agreement, they get funny faced.    

Of course, such answers would not be wrong if I had asked for the nature of money's work. Obviously, it does those things. It is just that these answers beg the question. They miss the noun, moving instead to intransitive verbs, answering unasked queries. We are attempting to search for money's essence, what it is-not its function.

The question "What is money?" is uncomplicated. Yet, its answer eludes. What is it?  What makes money money?
Bernard Lietaer, one of the Euro's designers, currency creator, former European central banker and Belgian electronic currency czar, currency trader extraordinaire, insightful academic and general expert in all things money, suggests the answer: "Money is an agreement."  

In other words, money is what groups of people say it is as far as they are concerned.  From inception, those who use money must fundamentally agree that it is money. Otherwise, it is just dots of ink on pieces of paper. Or handfuls of dirt. Or heaps of shells, rocks, minerals, skins, pelts or other sorts of uniform, fungible difficult-to-counterfeit commodities. If people agreed (and we could lick the counterfeiting problem), it could even come from a game with a little pot-bellied man snappily dressed in top hat, striped pants and a huge mustache.

An agreement? Could it be so simple? Of course, agreements to the power of humanity's population are not without complexity. How can we have such a far-reaching accord among six and a half billion people?  And yet, more or less, we do.

Turn it about. In the absence of agreements, money cannot function at all. We could still exchange, store value and count through an array of items and devices-but we would not have money. Without agreement, money simply does not work.

Proof? Consider all the objects that have served as money throughout history. Try taking any of them to the aforementioned grocery store. Select something. Get in line. Attempt to pay. See what happens.

In the alternative, use a non-local currency like yen or Euros. Imagine the consequences. The simple truth: If you and the grocer do not agree about the money, no matter how much energy it represents, no business takes place.

So it goes with all manner of money. It requires its collaborators to see eye to eye about what it is, how it works and what a fair trade seems to each under the circumstances.

Why do folks have such trouble with this question? I will suggest a couple of reasons and would be delighted to hear more. For one, money talk per se remains a 21st century taboo. We simply do not talk or think much about it in thoughtful manners.

Then, there is the "fish in water" metaphor. As fish do not notice water or have conscious regard for its nature, modern humanity functions constantly within money and its generated money forces. Money is so engrossing as to be literally unremarkable. We are observably oblivious to it and its impact upon us.

Obviously, for many, perhaps most, much of this agreement comes unconsciously. We grow up amidst money. We assume its existence and its miscellaneous qualities. Yet, at root, money emanates from our collective consciousness. Yet, if a bunch of us agree to particular commoditized vehicles of reciprocity and exchange, we have money-at least between us.

Though this seems simple enough, the implications are huge. It means we humans are in control, not money. For example, it means we can choose to direct the use of the money principles to create designer currencies. It means we can harness money's self-organizing powers.

Money can be something that encourages certain forms of behavior or contains layered considerations and incentives. Practically speaking, "money" can range from frequent flier miles to community currencies such as Ithaca Time Dollars to LETS bartering networks and so on in infinite arrays and variations. There are unique currencies serving as large-scale bartering systems and specialized currencies for localized, targeted time-based systems.         Though still at their beginnings, there are specialized designed currencies serving such targeted functions and purposes as education, neighborhood cleanliness, buddy systems, care for the elderly and the infirm, alternative justice systems and international monetary stability. These are among our collective choices.

Remember that money is purely symbolic within our agreement. It is what we say it is. So long as we have our agreement, we can access the human energies and resources to do whatever we want to do. Money of all sorts is about unmet needs and unused energies. Another Bernard Lietaer enlightening observation, "It makes no more sense to say 'we don't have the money to do this' than to claim we cannot build a house because we do not have the inches."

Our money agreement is our deal. It is our arrangement. We are in control whether we know it or not.  

One thing we know:  Money is uniquely human; we do not find money in nature.

It is an entirely human artifact.

What is more, money has no functional equivalents in nature. There is reciprocity in nature, but we find no complex symbol sharing approaching humanity's money agreement.

Money is a human-generated force, all human. As such, it serves us or harms us, for both good and bad. Within our miscellaneous cultural assortments, money dares us to dream and to work together even as it provokes, enrages and infuriates.

Money manifests culturally as humanity's most profound and universal agreement. It maintains visible social presence by our individual faith in it even as it becomes evident within our daily lives.

Of course, nature is not entirely out of the picture. For one, nature provides an abundance of instructive money metaphors. We may look at money's penchant for balance and mutuality. We may gain insights from nature's various elements and forces. Earth, air, fire and water all generate virtually endless arrays of money metaphors. Nonetheless, as a functional force, money simply has no equivalent in nature.

It is crucial for all of us to remember that money skills are not natural. They do not come in our DNA. Human beings, after all, are products of nature. Other survival skills are both natural and readily accessible. We breathe, eat, drink, excrete and reproduce without substantial effort or intent. On our lists of genuine survival masteries, money, alone, remains elusive. All money users require training, education and skill.                                                                                                                                      

Of course, money's history reflects human history. It has evolved as humans and our societies have evolved. This means that money's natures reflect humanity's natures. Its possibilities span the depth and breadth of human possibilities, for better and for worse. Its qualities reflect human qualities, including humanity's shadows, prejudices, arts, parts and all.

Money's inception and evolution nicely tracks humanity's social and cultural evolution as perceived by such notables as Jean Gebser, Clare Graves, Don Beck and Ken Wilber.
From the primitive's barter to the sophisticated bits and bytes of the 21st century, money's expansions and manifestations have echoed its times, its people and its purposes. Currencies reflect underlying cultures and levels of development.

Hunter-gathers bartered, for example. This is trade at its most simplistic. Then, as humanity evolved from tribal levels, the ensuing money forms became both fungible and in-kind. It was involved in one-to-one exchange involving such commodities as warehouse receipts, cocoa beans, bushels of wheat, cowry shells, gold and the like.

As cultures grew to mythological manifestations, despots and kings with links to the divine took over. Nothing says "ego" like putting your very own face on coin or currency. Philip of Macedonia (father of Alexander "the Great") was the first but many have followed. Since then, hundreds of [mostly] men have had their faces stamped onto their country's money. Even today, we might find nation-state money bearing images of royalty, political heroes, presidents, kings, queens and other politicos. In the alternative, we see money art paying homage to some form of the Divine or extolling natural wonders.

Finally, nation-state money frequently emphasizes law and order values. We might see symbolism reflecting constitutions or proclaimed systems of governance. Complex laws and monopolistic armies support it. Typically, we see references to the virtues of government. This is where we see references to law and order, national roots, patriotism, the "people" or the like.

Money types are functions of weight, portability, fungibility, security and technology. Money's weights have varied from the huge stone discs of the Yap     Islands to today's disembodied bits and bytes of computerized electronics. Yet the various money forms contain these common qualities. Obviously, the money will reflect its user's agreement.

Money's form typically stems from utilitarian considerations reflecting portability, security and inherent value. Historically, local coins were frequently recalled, melted down and diluted when rulers changed or armies needed financing. Ever wonder why dime and quarters have ridges?  Ridges reveal coin shaving and loss of intrinsic value of rare metals. In this vein, check out terms like demurrage, Gresham's law and purchasing power inflation. Even gold can lose its luster.

Dozens of objects have served the money function from gold to shells to tobacco to pelts and furs. We are fortunate to have a variety of excellent sources of money history to help us look at the array of money types. The most authoritative appears to be A History of Money by Glyn Davies and Roy Davies. The History of Money by Jack Weatherford is also an excellent resource. For authentic visuals, take a trip to the British Museum in London. Its money section is magnificent.

These and other authorities regale us with the tales of objects, actions and human folly that lead to our current relationships with money. From the Bible's wisdom and the money centric parables of Matthew, Mark and Luke, to fairy tales and the European morality literature of Charles Perrault and the Brothers Grimm, money has been a constant in western civilization. These accounts are very much worth the read.

Financial planning is a learned profession. If we are serious, we must know about our stuff. We must know money.