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Something funny—or at least unusual—seems to be going on in the world of money. We’re besieged by headlines about Bitcoin. Facebook plans to launch a digital currency for its nearthree billion users. Central banks around the world are also exploring setting up new digital tenders, even as they’ve been creating conventional money at record rates during the pandemic. In the face of all this, you don’t need a philosophical bent to start asking deep questions. What even is money? Where does its value come from?
In grappling with these queries, I decided to ask my six-year-old son what he thought money was. “Gold,” came the confident answer. It turns out that he was thinking of pound coins, which look slightly golden even if there’s no precious metal in them. Nevertheless, he gave an answer that has a very long lineage—and which some regard as still essentially true.