“All money is a matter of belief”
The famous economist Adam Smith said that “All money is a matter of belief”. I really agree
with that! The thing that we call money is actually only a piece of paper or numbers in a
bank, but we believe that they have a higher value than they actually have. Think of a 100
kronors note how much is it actually worth? The paper in it doesn’t cost 100 kronor. We have just made up that it has a value, and what is the difference between a 500 kronors note and a 100 kronors note? They probably cost almost the same to produce but one of them has five times the more value. We believe that it is worth more, and therefore it is. This system only works because we trust it and believe it. If we wouldn’t trust this system we would have to trade with things or pay with e.g. pure gold and silver. The same thing with bankcards, they are just numbers not even notes. The numbers have no value, but we believe that they do! So I do think that it is a good system that we have, it would be way more complicated if we didn’t trust notes and bankcards.
What do you think about the fact that we trade with things with a value that we have come up with?
By: Kajsa
I think it's a good system, cause it works in the entire world. It has it's limitations of course. But if we did as they did for centuries ago I think it would be hard with the globalization. We also have to consider that nowadays we can pay with a card. And I guess that the system only works because we trust it
I think this is a good system =)
But I think it is easier to buy for more money than you actually have. Since you don't see them you don't see that they are gone...
Nice written Kajsa!
The systen we have today is a good system and it is same for everyone. It is an easy way of determain how much something is worth.
Hanna you're absolutely right :) If you don't see or feel the actual money, you may not realize how much you have or can spend.
Actually all money is actually not a matter of belief. The coins are actually worth more than the value they represent. Otherwise, a great article! :)
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