As Good as Gold?

So what exactly is money? It's a question that has become harder to answer, as we use less and less actual cash, says author T.J. Stiles. Today, we cannot walk into a store, plunk down a chunk of gold and buy something. It is not, as the economists say, a generally accepted means of payment.

And those two words, "generally accepted," hold the secret meaning of money and how it has melted from some of the heaviest of metals to mere electronic markers. Money is a thing that everyone is willing to accept for payment for everything else, all the time. But when the public remains on the ledge, refusing to make that leap of faith, the answer is crisis — and just such a crisis dominated much of American history, shaping politics and tearing apart communities.

Early on, colonists invented money for themselves — using rice, pork, even tobacco, among other things, as monetary commodities. In the Western world, legal-tender paper money was an American innovation. But some paper notes were more successful than others. While many Americans thought gold and silver the only true measure of value, cash-starved Americans were desperate for money of any kind. In fact, support for the greenback inspired one of the most successful third-party movements in history — the Greenback party.

Today, Americans not only accept paper notes, they also participate in transactions involving trillions of dollars — via the Internet and other electronic media — without ever handling a slip of physical currency. Now money is largely a unit of account that exists simply because we say it's there.