Does money make a true economy, a truly effective, honest and fair system of trade, more or less efficient?
Ayn Rand seemed to think that making money was tantamount to magic, but is it white magic or black? In short does money ultimately profit or tax commerce? Without money, Wall Street and the Fed would collapse and disappear, for example, but would this be good or bad in the long run? It’s hard to imagine any alternative to money besides barter, but it seems like profit drives inflation, among other things. Indeed, why are Muslims who observe Sharia law so opposed to interest on loans?
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I personally think that the phrase "fair system of trade" is a contradiction in terms. Money is subject to human manipulation. People ascribe value to certain goods and services, an, in the process, bring in a subjective element to entities that in reality are hard for humans to measure. Much of the monetary system operates behind closed doors. As well, it is run through barter, which, I think is essentially dishonest. When people barter, or make exchanges, a fee is charged. In the monetary system the fee may be interest at either a mild rate or at an exorbitant rate. What starts out as mild often increases to extreme levels. Because negotiations among the big shot bankers and major players go on behind closed doors through the system of Freemasonry and related practices, damages may be charged as part of the fee. In this way, certain individuals who agree to the conditions can garner an advantage of over others.
The human manipulation, even in terms of determining prices and wages seems to operate contrary to the natural flow and order. When people barter, they generally incur losses with each exchange by paying the fees in money or damages. Even at even exchange, if such a phenomenon exists, the system does not allow room for growth if you really think about it. I think that the world needs free giving as opposed to barter.
"The love of money is the root of all evil" to quote the Bible. Having money is good, loving it is bad.
You’ve confused a number of distinct issues:
1. Whatever Ayn Rand may think, money is not magic.
2. A modern developed economy is simply not possible without money. For hunter-gatherers and primitive agriculturalists, money is optional. But money was seen as essential to civilization thousands of years ago.
http://en.wikipedia.org/wiki/History_of_money
Whether civilization is a good idea or not is a matter of opinion.
3. You can have money without having interest. And it isn’t just Sharia law that prohibits charging interest on loans. The Catholic Church did the same:
http://en.wikipedia.org/wiki/Usury
It was only in the 16th century that this policy changed.
Sharia law (and early Christian rules) does not prevent investment, corporations, etc. just interest on loans. That means Muslims can buy shares, form partnerships, etc. – everything needed for a thriving modern economy.
http://en.wikipedia.org/wiki/Islamic_banking
Recall that the Islamic world did have a thriving economy when Europe was in the Dark Ages:
http://en.wikipedia.org/wiki/Islamic_empire
and that Europe had mostly reverted back to a barter economy until the 13th century
http://en.wikipedia.org/wiki/Accountancy#Luca_Pacioli_and_double-entry_bookkeeping
4. Inflation has nothing to do with profit. One of the essentials of economics is that it is NOT a zero-sum game – wealth can be created as well as destroyed.
The idea behind specialization and trade is that together, the two parties can produce more than if they did not cooperate. With the use of tools, etc. the productivity of individual workers can increase, producing more goods for the same inputs. Isn’t that what normal profit is all about?
http://en.wikipedia.org/wiki/Profit_(economics)
5. Inflation affects barter as well as money. If the farmer has a good year, the blacksmith can charge more wheat for a nail or a plow, etc. than if the farmer had a bad year. You can argue that that makes wheat into a commodity money
http://en.wikipedia.org/wiki/Commodity_money
but it doesn’t change the nature of barter or the existence of inflation.