Before the introduction of money as a medium of exchange, goods and services were traded by barter; etc. Trading by barter is exchanging goods or services with other goods or services. However, one of the drawbacks of barter according to Adam Smith (the father of modern economics) as written in his book – The Wealth of Nations; is the "double coincidence of wants". That is, you’ll have to find who needs what you have that has what you need.
In fact, this matching process may take long to happen, and in the end could defeat the purpose of the intended exchange. And so the coming of money as a medium of exchange eliminated the “double coincidence of wants” as goods or services are now exchanged with money.
In recent times nevertheless, money is gradually transforming from its traditional role as a medium of exchange to a sarcastic behaviour of a medium of influence. A typical example of this phenomenon is the threat of economic blockade by the incoming administration of the USA, led by Donald Trump.
The US is a rich country with a population of over 300 million people. Its citizens have favourable disposable income when compared to the income of citizens of other western countries. Disposable income is an individual’s personal income minus his total taxes. A higher disposal income indicates a lower cost of living, and vice versa.
Cost of living is really low in the US. For instance, a petrol station in Michigan is currently selling petrol for approx 10 pence per litre, while petrol sells for an average of £1.10 per litre in the United Kingdom and other EU countries. This means that petrol sells at £1 more in the EU than in the US. And so for every 1 litre of petrol a driver buys in the US, he saves £1.
Besides, there are more than 210 million people with drivers’ licences in the US. If these drivers buy 10 litres of petrol per week, they will be richer than their counterparts in the EU by £10. This is just one product, and there are several goods and services where such savings are recorded.
Thus if you are a manufacturer, where will you likely take your products to? It will definitely be to the United States of America. Now you can see why nations are prepared to craw and beg America for trade deals.
Mr Trump is aware of America’s monetary power. And that’s why he’s threatening other countries with trade war. In my opinion, I don’t believe America is going to start protectionism. Trump is a business man. He’s aware that in business you use what you have to get what you need.
Donald Trump has found himself in an unfamiliar arena – the White House. He doesn’t know what future holds for him in his new position. Well, he has to start with what America has – money; not as an exchange for KFC chicken, but as a medium of influence – the Donald Trump-Card.
Another instance where money acts as a medium of influence is when some political leaders in Africa and Nigeria in particular, steal millions of dollars of public funds. They don’t steal these moneys in order to buy bread and butter, but to control those people who are willing to sell their days for gold – apologies to Kahlil Gilbran.
This kind of treasury looting can only happen in a country where kleptocracy is practised, but masked as democracy. Merriam-Webster dictionary describes Kleptocracy as “government by those who seek chiefly status and personal gain at the expense of the governed.” This defines in a nutshell the Nigerian system of government.
And in order to maintain their ‘Chiefly status’ politicians continue to steal public funds to the point that some rational citizens accuse them of stealing moneys that they don’t need. This assertion is untrue. Nobody steals money that he doesn’t need except he’s a kleptomaniac, which is a mental illness. But in this instance, these politicians know exactly what they are doing.
From the President who controls Nigeria’s resources to a state governor whose only duty is to collect moneys from the president to pay salaries to its civil servants. Except that in the end the workers will not be paid because the governor has used the money to maintain his chiefly status.
By now, they have virtually emptied the treasury. Sometimes they steal these funds legitimately. The executive arm steal through what they call ‘security votes’ – whatever that means. The legislatures enact laws to bump-up their salaries. Nigeria is the only country in the world where law (breakers) makers receive more than 2 million US dollars as salaries per annum.
The President becomes Lord of the manor; the entire Nigeria is his estate. Everybody goes to the presidential villa to worship him. Whatever he says is final. The governors become emperors in their respective states. The legislator becomes the honourable – whatever that means. And they all want the citizens to become the beggars.
Those citizens who accepted to be beggars will now go to the politician for their daily needs. That’s what the politician wants. He’s ready to pay your hospital bill, your children’s school fees so long as you are ready to do his bidding. Then the citizen will start to sing praises of the politician. Honourable will be ringing here and there. But the citizen has forgotten that the money is his in the first place.
Some will be appointed as ministers, commissioners, or whatever. But we know that "an empty stomach is not a good political adviser". - Albert Einstein. And so the appointee is only there to see if he can steal his own. And the circle continues, and the citizens continue to suffer.
In all, the politicians have the money; the citizens have nothing – kleptocracy. The politicians have stolen all the money not to enable them to buy rice and beans, but as a medium of influence.