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Money Money Money

This American Life is probably the single best hour of radio every week, and the Planet Money team is a group of journalists that I respect greatly. That said, the "The Invention of Money" episode of TAL, which aired earlier this month, is not one of my favorites.

Ira glass sums up the topic with this line: “The most stoner question we’ve ever posed on the show – what is money?”

(from bredgur on Flickr)

It's not that it's a bad episode or that it's poorly produced or researched. I'm just amazed that, so many years after the start of the financial crisis, we're still asking simple questions about what money is and where it comes from.

One of the best courses I took during college was Money and Banking. It was an upper-level economics course taught by two retired guys who were incredibly knowledgeable on the topic. I probably learned more useful material in that course than any other.

It doesn't matter what you studied in college, or even whether you went to college. There's nothing more universal to a society than money. Everyone needs money and most people want money. Yet, unless you take an upper-level economics course in college, chances are good that you have virtually no idea what money actually is.

To me, this says one of two things. Either a) the money and banking system is so complicated that most people simply wouldn't get it, even if they tried, or b) our educational system has seriously misplaced priorities when it comes to what people take away from their educational experience.

This American Life and Planet Money did the best job they could to help people understand how this stuff all works. Ultimately though, most people will go their entire lives without truly knowing what money is.

Comments

JackPo said…
I ABSOLUTELY Loved this episode. I can't believe I have never heard about the fake money at Brazil until now.. I'm clearly a terrible economics student.
Kent said…
I'm not sure there is any *need* to know what money is. It's probably asking a lot of people to understand the nexus of psychology, macroeconomics, monetary theory, etc. that goes into defining money. Is it interesting? Sure. Is it necessary for carrying on in one's day-to-day life? Probably not. It's such an abstraction.

Now I hope monetary economists understand money, but their models don't even suggest they always do.

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