Societies need money to function. But this is fraught with all sorts of issues – even the concept of money is a strange construct, when you think about it. Why, for example, are almost all of the worlds currencies based upon banks holding of enormous amounts of gold? What really is the value of cryptocurrency, and how do we know that the controlling bodies for either are even trustworthy? Then, when you look at how companies are valued, how investment is managed and consider share ownership and the various market derivatives, it’s very easy to see that you need people who are expert in the details, and you need laws to ensure fairness.
Banking is a strange concept – the notion of minus one apple seems preposterous. Yet, the notion of having a debt doesn’t seem so. Now, this might be because we’re simply used to the idea, but negative numbers are really an abstraction from reality, aren’t they? But when you take a worker, paid to perform a duty, we really depend upon the concept. Payment can either be in arrears or in advance. If paid in advance, the worker needs to be trusted to complete the work, and if paid in arrears, the employer needs to be trusted to come up with the payment. The whole concept of money is essential for societies to function, but the system has to be based on trust. Yet again, it’s complex and so we need experts who understand the nuances od finance, and again, we need laws to ensure trustworthy behaviour.
When we talk about money, we need also to talk about taxation. There are all sorts of historical examples to consider, often springing from meeting the country’s needs in times of crisis (for example, wars, or pestilence), and there are practical considerations that we need to take account of. Most countries have complicated taxation arrangements, and you change these at your peril. It may seem simple to add a percentage point to income tax, or to use taxation to impact people’s behaviour, but as we should remember, there are almost always unintended impacts. Taxing fuel, for example, can be a tool to influence the populace in its choice of technologies, but the associated issues are immensely complex and unpredictable – except, perhaps with the benefit of hindsight, when we can assess whether government has made the best decisions for the Nation. It’s easy to think of examples – the world-wide pandemic has cost untold amounts of money, and wars present financial challenges that last far beyond the conflict itself. But governments need to make difficult decisions that profoundly impact the lives of the nation’s people, and very often there will be fine balances to be struck. It seems important not to have too short-term perspective, but clearly there are pressures against this.