The internet is littered with talk about the future of money. There’s fervor about how Universal Basic Income will solve all of our problems. There’s concern about what we’re all going to do for money when automation does away with our jobs. There’s vague talk about how post-scarcity is right around the corner and money soon won’t matter anymore. These statements indicate an incomplete understanding of what money is and how it works.

Money isn’t something separate from our labor with its own value. We’re not “getting money” like it’s a bag of gold, or a pat on the head, as a reward for powering through another week at work. Money is synonymous with our output. It is a token of our hours of labor. That’s why we can exchange it for the output of others; that’s what “buying” is. Consider the following thought experiment to reinforce this notion.

There’s roughly 150 million people in the US workforce. A $40,000 annual salary (the rough average) equals about $20/hour. That means every 40 hour week, the US workforce requires another $120 Billion in payroll. If dollars aren’t explicitly units of measure of our output, but instead are something separate, with their own inherent value apart from our labor, then we have a problem: Unless there is an absolutely astronomical amount of them already in existence, we drastically reduce the number of them available every week, which will drastically change their inherent value as there are substantially fewer of them left to earn each subsequent week.

In response to this, many will say “But banks create money on the fly, out of thin air, every time they lend money”. True, that is exactly what they do. But given what we just established, it shouldn’t take a lot of thinking to realize that they are creating that money explicitly to cover the payroll of the country. Furthermore, they have to match the amount created with the amount required by payroll to avoid causing inflation or deflation. If you digest that for a minute, this reduces to “if the money supply has to be kept in synch with labor output, then money and labor are the same thing”.

You probably think I’m wrong, and I’d love to be shown what I’m missing, if anything. If a dollar isn’t a representation of labor, then just what is it? If it’s based on or tied to some other “thing”, then what does it say about that thing when every week, it’s suddenly worth 120 billion more dollars?