http://www.goldparty.org/money.html
Money as Fiction
Money and Banking in the United States
Most of us are familiar with the children's game of paper-scissors-rock. It is a game of three-way dominance. Paper covers rock. Scissors cut paper. Rock smashes scissors. The two players simultaneously throw out one or another hand sign. The winner is the one whose sign prevails with respect to the other player's sign.
A similar relationship governs three institutions of power in society: Government, religion, and commerce. Government has power over commerce. (Government controls commerce through application of laws and regulations.) Commerce has power over religion. (Through the lures of materialistic desire, it can undermine religion's influence in personal life.) Religion has power over government. (Religion has the power to legitimize or destabilize government by giving or taking away its moral authority.) In our society, however, commerce also has power over government even if government power is supreme. The system is out of balance.
We think that money has power, but it is only as powerful as its tokens are accepted. Money in the form of paper currency is only a piece of printed paper. In the form of a coin, it is stamped metal. Even if that metal is gold or silver, there is no inherent value in it unless the public believes it has value. Ultimately, what makes the public accept money's value is government. Government declares that a particular monetary token is legal tender.
People speak of "running out of money" as if it were a physical commodity. This is a misnomer. We can no more run out of money than we can run out of inches or miles. Money is a yardstick used in the commercial sector to measure ownership and economic power. Money is fictitious. We create money by agreeing to attach value to it as if it were an object or commodity of palpable worth. Our belief is what makes money real.
Commodities which have value
The most valuable thing in the world to human beings is oxygen in the air that we breathe. Without it we would be dead in a matter of minutes. A close second would be clean drinking water. Again, life could not take place without this precious commodity. In financial terms, however, the life-sustaining air and water have little value. We simply breathe the oxygen around us; and, with a small charge, we drink water supplied by municipal water systems. In contrast, we believe that two substances of comparatively little use, silver and gold, have intrinsic value. Their value is universally recognized as a medium of exchange.
This shows the paradoxical nature of money. This commodity, whose original function was as a substitute for silver and gold, has inherently little worth. Money in itself does not even exist. It is a fiction accepted by civilized society. The fact that a certain currency is “legal tender” means the part of money’s worth is based on the fact that government is prepared to force people to accept it in exchange for the goods and services that they want.
Once money gains widespread acceptance, however, many of us make it the center of our lives. We think we are worth the amount of money that we possess. It is the basis of a socioeconomic hierarchy.