this post was submitted on 25 May 2026
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i'm just going through some basic financial philosophy discussions and i'm just trying to clarify the basics.

how much money is there in total, in the world?

up until yesterday i had assumed that the total amount of money in the world is zero ($0) because what one person has in bank account, another person has in debt at the same time, since money is literally nothing else than a codified form of debt.

now i'm wondering, is this even accurate? if a big bank takes out a loan from the central bank, say, it takes $1B in loan, then it has $1B in money on the account but also $1B in liability at the same time, so the sum is zero. However, there is an interest on the loan, let's say 2%. Then the bank owes $1.02B actually, while only having $1B on the account. So the total amount isn't zero, it's negative. Is this correct?

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[–] FinjaminPoach@lemmy.world 4 points 8 hours ago* (last edited 8 hours ago) (2 children)

In my opinion, money is not just debt. It simply looks that way because our current monetary system revolves so much around debt.

I see it as a valuation placed on work already done. And yes, sometimes people are paid unfairly, but it still only measures whst your labour was worth to the employer. If they don't pay what you're worth, their fault for having a crap sense of value.

Money exists for a real purpose - to make all exchanges fairer (whether it currently does that is irrelevant) and therefore should not be dismissed as "fake."

This is analogous to the power grid of the country - electricity comes from so many different sources, like Wind, Coal and Hydro, and it then is utilised in all sorts of ways to keep peoples day to day lives running. Similarly, power we tap into at home is the sum of work already done by power stations. Like the electrical grid, Modern finance shifts around value willy-nilly, skimming value off the top of several millions of common people just to dump into harebrained schemes, like investments.

All money, similarly, ultimatrly exists because some human did work or made a machine, beast or force of nature do work for them. Any other money is simply circulated, not based on value that's created.

This is why printing more money to pay off government debts eventually causes inflation. If it doesn't keep pace exactly with the rate of value added to the country (which is hard to know) then it's just diluted, because the ratio of cash to work done gets bigger and bigger; not every new printed dollar is tied to a dollarsworth of work done.

[–] dustyData@lemmy.world 1 points 5 hours ago* (last edited 5 hours ago)

That's actually the valuing (wealth) definition of money. But money doesn't have to be that way. There are economic theories that propose decoupling value from debt by having two different mechanisms for each function. Part of the inequality reproduction problem is that both debt and wealth are coupled in our current fiat money systems without any real underlying value equivalence.

First forms of money made sense when money was made of valuable metals. The value was intrinsic to the physical object. Debt was managed by paper accounting. Or paper money like in China. Then paper debt was based on gold, like the early xix century money. Finally, modern fiat money stopped being backed up by gold and today it is purely debt, though it is still used as value. Which has accelerated the negative effects of capitalist labor extraction.

Like, Jeff Bezos doesn't do $55k per minute of labor. But, amazon does extract and steal that amount of labor and funnels it towards his pockets (actually steals much more). While the workers receive an infinitesimal fraction of their own labor. They can do that because there's no friction from having to transform said labor into an actually valuable medium, like silver or gold.

This is why the other response to OP's question is that fiat money is actually infinite. The us treasury snaps their fingers and billions come into existence. It's pure abstract value.

[–] Buffalox@lemmy.world 5 points 8 hours ago

In my opinion, money is not just debt.

Money is literally an "I owe you" note. It is issued by a central bank, and has no intrinsic value. The entire value of money is based on trust, that this "I owe You" note will good when you need to spend the value of whatever you did to earn the note.