Ouch! What You Don’t Know About Money

…And Why It Matters (More Than You Think)

Download the reading here.

Write a brief reflection below on how this reading is connected to our discussion topics this week. Be specific!

7 thoughts on “Ouch! What You Don’t Know About Money

  1. Profile photo of WonJun KwonWonJun Kwon

    We discussed about the value of money this week. Money offers a standard unit of exchange, allows people to avoid unruly exchanges and is widely accepted. It was created for replacing barter system, and makes people easy to buy or sell things. Thus, it became very important to have enough money these days. People work hard to earn money and think they are well doing. However, what if money suddenly loses its power? Will everything remain same? I will say no. According to the reading, money is just magic made out from banks and emphasizes that money is just a piece of paper, just like $4000 of pine tree cut and printed into 1 billion dollars. If money loses its value, rich people will lose their position and people who have such practical jobs as farmers will gain the power. This is because they can produce things that can directly have impact on their lives.
    Also, does more money make people happier? According to the research, if one’s yearly income goes higher than $75,000, they do not feel happier. Thus, it is important to have enough money for their lives not a lot of money. According to the reading, there is an example that a guy named Ted has a lot of woolly mammoth meats that he does not want any more. People do not need more money. Instead they only need enough of money.

  2. Profile photo of Kristina Zhang

    The reading stated on what purpose was money invented and how did people consider it through. In economics class we learned that there are 5 characteristics of money: divisible, portable, acceptable, scarce and stable; and 3 functions: medium of exchange, unit of account and a store of value. These characteristics and functions provide us a relatively more fair trading system, yet just like the reading had pointed out that the value of money is changeable overtime. So on the previous TOK class we assumed that all the money in the world had lost its value (possible situation when there was a huge inflation), what would happen to our life. The opinions were: war, government collapsing, banks disappearing, “farmers” taking over “Bill Gates’” island, “Bill Gates” fled with tons of gold by his private jet, etc. But no one had given out the idea of creating a new kind of money or trading system. A new way of trading might actually help with this situation, and get “the chaos” under control. That requires establishing new banks and come up with a new kind of trading currency for replacement. In the reading it also explained how banks were set up, gold and silver, the things that has stable value, does play a big role in the banking system. I like the way this book explain a how a complex method develop overtime. It makes the concepts easier to understand.

  3. Profile photo of Andrey BorodinAndrey Borodin

    We had to look at a writing, which examined the history and basic principles of money. Although in general money is considered to be a mere representation of wealth, people are still very much obsessed with it. There are a range of different opinions about money, but ultimately it is an important concept, or else it wouldnt be around for so long. I think one reason for this would be the fact that a standart unit of exchange simplifies barter by a lot. Imagine the days in the past when things where priced by other things that were also priced by other things. With a simple and unified system like money society saves lots of time, that we could have spent arguing what would be a fair exchange. Another reason that money is so important to modern people, is the fact that it provides us with some sort of faith in a system that essentially is made up. People in the modern era base their life choices greatly on the money factor, becuase it is much easier to consider such a simple thing as money more important than complex emotional phenomenon. In the end, although money is elusive, it still manages to make human lives more organized and simple

  4. Profile photo of Karen LeeKaren Lee

    In class, we have been discussing money in general including the value of money, whether money equals happiness, relationship between money and how people treat each other, and what would happen if there was to be no money at all. In the book “Ouch”, it talks about how money was started all along, the requirements of money, and the origin of banks and how they work (referring to it as the ultimate confidence trick). It also mentions the problems of the bank system and its weaknesses: being unstable (such as what if everyone asked for their money back at the same time). This actually supports the ideas we came up with during class discussions such as how money cannot be trusted and how so many disasters might be be brought about due to absence of money. However, despite how unstable our bank system and Fiat system can be, with only the universal promise in the value of money, we have concluded in class that there is no better alternative for our trading system than money.

  5. Profile photo of Rebecca WangRebecca Wang

    This unit started with the question “What will you do if you have 100 million”. We discussed about that question and then on the value of money and what money means to us last week and this Monday. We learnt that the majority says money brings us happiness and few people thinks money has no meaning.
    This reading shows us how money and banking system involved and basically tells us that paper money is more or less a scam. The value of paper money varies depending on people’s demand and can be created in thin air. Nowadays the value of paper money and electronic money in bank is the determinate of the value of almost everything. There is a saying in Chinese “you can’t buy everything with money, but without money you can’t buy anything. ” While we are using money as a standard object to gain physical products and non-physical services, money itself is created “electronically out of thin air” (P14 ouch) from the bank.
    In conclusion, it is really sad that when most people agree their life can’t continue without money and money can buy happiness, money itself is actually nothing at all.

  6. Profile photo of Sukey Ng

    In this unit we started talk about values of money. In the book “Ouch”, it tells about how money started use by people, and how the bank started to run and create money for use. Before people used things for trade and exchange the stuff that they want to use, so that will make everyone who exchange stuff feel satisfy by the product they want. This is depending on if someone have the thing you need, and you have the thing they want, then the exchange product will be a good choice for those people. But after money is invented, people can use money to get whatever they want, and it is easier for trading.

  7. Profile photo of Aeolus HuangAeolus Huang

    In this units we talked about what is money and how bank system formed. Money is actually worthless because it is just paper with picture and words, what makes the money valuable is the government of every country, they decide to use money as exchange unit so the money is valuable. This is because the modern economic system is based on fiduciary standard. And this situation makes money is valuable when the government is strong and have ability to keep the money be worthy, but if the government collapse, the money that is issued by that government is not worthy anymore. This is the disadvantage point of money .

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