Even when popular expressions are inaccurate, they tell us something. Such is the case when we say, “I need to make some money”. When we work, create and exchange what we produce, we earn payment, but we don’t actually make money. This long-standing habit of confusing money and value is expensive unless we make the effort to clarify one from the other.
You may think, “Ha! You’re being silly. You know what I mean when I say I need to make money. Trying to differentiate money from value is academic and pointless: it shouldn’t matter”.
Perhaps you’re right. Our lives are busy enough trying to meet our obligations and pay bills. Money is our means to meet these responsibilities. Relieving payment anxiety is our priority. Differentiating money from value may be too much for our attention to care. But this would be a mistake—it has been a mistake for centuries.
Let’s think about the quantity of something and value.
A long time ago, before widespread use of money, the surplus of a commodity like grain was casually exchanged for a different and desired commodity like wine (a surplus in possession of another). Both people had, not only enough, but an overabundance of what they possessed. Their self-interest led them to value less of what they each possessed and value more of what they both wanted: and they were willing to trade. People valued other things as they related to their own needs and to what they were willing to give to satisfy those needs for the exchange to take place, making their values not only relative but subjective. They viewed and sensed value through their self-interest, developing their own opinions and estimations.
These exchanged surpluses weren’t closely measured. They were reckoned as “good enough” for the exchange to take place. But when this kind of exchange was no longer a direct barter transaction and the amount was purchased with money, it became necessary to measure the quantity with greater accuracy.
Instead of measuring in rough estimates for barter, precise measurements made more sense while pricing in money. People got used to measuring goods down to a granular level, and naturally assumed that value itself could be treated this way, as in a fixed measure.
While seeing value expressed in price, fluctuating in parallel as quantity increased or decreased, people misconceived money and value as being the same thing.
The potential to understand true value as being relative was lost, repeatedly. Writing in 1776, the French philosopher, Condillac said, “They will speak of value and price without thinking what they are saying: they will forget that the notions they make of them can only be relative; and they will assume that they are absolute”.
So, when you labor, create, and apply your skill to whatever people are willing to pay you for, you are creating value, worthy of payment in value regardless of whether it is enumerated in money, or not.