Debt and Money: Facing the Music

What is music? An agreement. What is debt? An agreement. They are the same thing. No, they aren’t the same. Let me explain.

Music is an activity that people do together based on an agreement about the value of units of time, frequency of beats, frequency of tones, loudness and dynamics and the intervals between tones in melody and harmony. Of course when I say it that way it sounds kind of complicated. What I’m getting at is that music exists based on human agreement and can’t exist without it.

When musicians play together they must agree to these musical standards and conventions in order to create music rather than chaos. If the musicians are able to play together at the same tempo, same dynamics, same frequencies, and same harmonies, in effect, play the same song, then they create music together. What happens when people play music together is a kind of surplus value, that is created when the group agrees to abide by certain standards and conventions.

Before money — which is a kind of handy intermediary between people — lenders lent things and borrowers paid back in the surplus value that they earned over time from utilizing the things that they borrowed. Things were more informal back then so there had to be a lot of fudge factor in the equivalence of loan to debt. that changed with the invention of a unit of account. You know — ‘money’.

Nowadays a debt, or IOU, is an agreement that I am borrowing something that equals an agreed amount of units of value and that I will pay the equivalent back plus some agreed upon extra units of value sometime in the future. The lender agrees to lend the ‘money’ and the borrower agrees to take it and then pay it back later.

With a loan, there has to be agreement or trust between the parties. If I, the prospective borrower, say: “I’ll take your money but I have no intention of paying you back”, chances are good, that you, the lender, are not going to enter into an agreement. If I have a history of defaulting on my debts, no-one is going to trust me or lend to me.

Just as music is made possible by the agreement of the musicians to abide by the rules, debt is ideally about the possibility of surplus value coming from capital by an agreement between borrower and lender about what is given and what is owed.

Many people, when they say the word ‘capital’ mean the money needed to get some enterprise going. “It takes money to make money.” That sort of thing. But it’s not the money that creates surplus value, it’s the real aspects of capital.

Money is only virtual. It only exists by virtue of agreement, and ceases to exist when the agreement breaks down. Think of wallpapering your house with worthless money and what that says.

Debt allows capital to be used by someone without having to pay for it now. I, Mr Capitalist, promise to pay you, Mrs. Investor later, when, presumably, I’ve made a profit from your investment. If I as a lender or investor own a debt, it’s because I believe that in the future that debt will generate income.

That’s where money comes into the picture. Just as a debt represents the promise of future income, money represents the promise of future goods and services.

If I have money, then I don’t have a thing. If I buy a thing I don’t have that money anymore. Thus I hold money because I believe that in the future I will be able to use it to purchase goods and services.

Is this anything like music? No, because music is a real experience, not just a promise. Consider songs. Songs are composed by people and then they enter human society and history. Songs are reproducible: other music artists can cover a song, or anybody can sing along with a song. Some songs are very popular for a generation, other songs like “twinkle twinkle” last for generations. If I can sing in key and follow the right rhythm and melody I ought to be able to reproduce a song so that everyone who hears it recognizes it. I suppose you could say that songs are a medium of re-creation. I can pass along a song to others by teaching them or motivating them to learn it.

Songs are much more than a medium of exchange, they are a medium of shared experience. I can sing a song with my mother, and both of us can derive deep meaning from it. I can sing a song in church with the congregation and we will all derive inner strength and passion from singing it together.

Sorry, money can’t do that. Money is virtual and music is real. My point here is that surplus value does not come from money — it comes from our creativity in using resources and energy to produce goods and services.

Money lowers transaction costs, so it facilitates exchange. It is like adding oil to the gears in order to make the wheel turn easily. But it has no value in itself. Music has value in itself: we enjoy it, we teach and learn it, we pass it on. It has social, political, emotional, and spiritual significance for us.

Ideally, money as a unit of account, is a kind of messenger that informs us as to how we should organize our wants and desires. But the more debt we carry the more pressure that’s on us to make more money and to do the bidding of our creditors independently of what is going on in reality, and the higher the general level of debt the more pressure there is on governments and banks to create money or favour creditors.

This is where we find ourselves today. We have a society where many children believe that the point of life is to grow up and make lots of money. We have a society where some of the best and brightest go into financial services instead of science and education because that’s where they can make the most money. We have a global system and global institutions that are about making the flow of money and capital easier but protection of human rights and the environment harder. We have an economy where a tiny minority takes in a huge income and the vast majority barely get by. I believe that someday soon this will change and we will begin to see that money is not a measure of our lives or our happiness.

Make music a part of your life, because music adds value by enriching your experience. The same cannot be said for money.


  1. There is a You Tube video of Scott Nearing, giving a talk in some community hall back in 77 or 78. During his talk and at the age of 95, he says in a strong voice, ‘pay as you go’! As a man who hit the land right at the height of the depression, he like many of his generation had no love for the banks.

  2. Money is fine if you have it, but if you don’t – beware of being fooled into thinking loans are the answer. We don’t actually own anything that we have a loan on (Including residential property) because if we are unable to pay, we lose it. Debt is bondage and will keep us working hard to repay, which in essence costs us our freedom.

    I know wealthy people who have worked all their lives at their careers because they believed money is the measure of wealth, but I have come to see it isn’t:
    Where a wealthy person gets very sick, they will spend all their money for the possibility of regaining their health. So health is of greater value than financial wealth.

    Happiness is also something that wealth people often find themselves without but would dearly love to have it.

    So seek health, happiness and freedom, not financial wealth, bondage & loneliness. Live from the heart and the great relationships that will come to you, not from fear and the failures that inevitably confront.

  3. Hello there

    My partner and i both have jobs and rent a small house with some small land, we use our credit cards wisely, paying no extra cost as ours are interest free, we’ve bought a small car with a loan (interest free) so we could transport our small child around safely, soon to be two children. And we bought a bed with the credit loan as my lady is very pregnant and uncomfortable, without credit we couldnt afford to have these small significant things to make us happier. i understand about all the bank business.
    If people are only just realising that banksters are thieves, unlucky for them.
    money is not the issue or banks its people being greedy and wanting more than they can afford.
    In response to Miguel
    i know many people who are very rich who are very happy and many people who are very poor who are very unhappy and vise versa its ridiculous to think other people are to blame for your own debt and for Miguel varella-cid to comment on debt costing us are freedom sorry mate but rubbish the value of money might be nothing, but using this awful system that exists to your benefit is great.
    Dont be fooled by the hype
    its greedy people living beyond there means, thats the problem.

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