Henry Ford of the Ford Motor Company once said, “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning”? Most people do not understand the basics of the money system and for such innovating therein becomes incredibly difficult. There are all these illusions of what money is and what it is not, how it works blah blah! This blog post won’t make you understand the entire nine yard of complexities of the money system but I am using it to sell you on two things;
- Money is a system.
- The money system can be innovated
What is a system? Donella H Meadows in her book Thinking in Systems defines systems as an interconnected set of elements that is coherently organized in a way that achieves something. Any system consists of;
- Function or purpose.
Case in point; your digestive system consists of elements (mouth, food, teeth enzymes, stomach and intestines) They are interconnected through the physical flow of food through an elegant set of regulating chemical signals. The purpose of the system is to breakdown food into its basic nutrients and to transfer those nutrients into the blood stream (another system) while discarding the usable wastes.
The other thing to note about the system is that it produces its own pattern of behavior over time.
So, let’s look at the money as a system; its elements include; coins, notes, ideas, goods, services, businesses, governments, commercial banks, gold, debt, bonds, debentures etc. The perceived value of elements like goods, services and ideas is attached to notes and coins which are moved from the central bank to the commercial banks. The purpose of the system is to have a centralized system of exchange of value.
It is easier to learn about the system’s elements than its interconnections, so if I lost you after the elements. It is fine, read on. I bet you are sold on the truth that, money is a system. Let’s go to the second part;
How can one innovate the money system? You cannot control the everything in system but you surely can-do certain things that are within your control and that is the basis of my suggestion of innovation here. Firstly, you have to study how any system works and the results therein before innovating.
There are three major ways to innovate the money system.
Increase the demand-backed production: I have learned to listen to the customer. Most people who make a lot of money offer services or products that their customers want.
Examine your thoughts: If you go back and look at the elements of the money system you discover things like ideas. Do you have ideas? Every one does. If you have ideas you have money. My point is; you can’t have money if you think you don’t have it. I raised over $5,000 for one of my businesses just by selling my idea through bootstrapping…details for another day.
Spend ideas: Money is simply a form of exchange. I remember years ago; I didn’t have money to pay my rent so I negotiated with my landlord how I could exchange business advice and offset the rent. You don’t have to exchange notes and coins all the time.
If you are still with me you know that Money is a system just like any system you learnt in school and You can innovate the system.
Join me for Velocityxperience on March 23,2019. Details are HERE!