October 31, 2026
In the 1964 film The Pawnbroker, Rod Steiger plays Sol Nazerman, a Holocaust survivor who operates a pawnshop in Harlem. In one memorable scene, his young assistant asks him what he believes in. Money, he answers. Money has extraordinary powers. It can buy comfort, luxury, relief from pain, sometimes even life itself. Then he adds, his anger driving him:
Now you listen to me and listen very carefully. Next to the speed of light which Einstein says is the only absolute in the universe, second only to that I rank money.
Believe me, that’s all you need to know.
“Is it everything?” “Money is the whole thing,” Nazerman tells him.
Nazerman had suffered horrors that have left him emotionally damaged. Money became the center of his life, something he could cling to in a world overtaken by wanton malevolence.
Of course, Nazerman was wrong, there’s more to life than money. We tell ourselves that while knowing everything has a price tag, even death. To what extent does the pursuit of money drive us?
What Is Money?
Economists define money as a generally accepted medium of exchange. It is one of mankind’s greatest discoveries.
Money solves the problem of the double coincidence of wants. A farmer sells his wheat for something widely accepted in exchange, then uses it to buy shoes. The shoemaker doesn’t want wheat but accepts the money because he knows others will accept it from him.
People pursuing their individual interests discover that certain goods are more readily accepted than others. Carl Menger explained how money could emerge spontaneously from this process.
Gold and silver eventually became important monetary commodities because they possessed characteristics useful in exchange: durability, divisibility, portability, recognizability, and relative scarcity. . . .
The commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term “luxury good” implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.
Money was originally a means by which strangers could cooperate without knowing or trusting one another personally. And therein lies its genius.
Money can be exchanged for almost anything offered for sale. But it is not the same as wealth.
A society’s wealth consists of its houses, food, machinery, medicines, knowledge, productive capacities, and countless other goods and services that improve human life. And though not usually considered wealth, I consider having a loving and supportive family a form of wealth, especially as one ages.
Gold and silver are scarce and require much work to get them from the ground to a form useful in exchange. If people acting in their own interest preferred precious metals as money, how did we get paper and digital money?
As money substitutes, paper and digits are convenient. They were exchanged for goods and services on the belief that the commodity money was readily available for exchange at the bank issuing the substitutes. Paper and digits are not money backed by the commodities. Only the commodities — gold and silver — were money. Or they were until government intervened.
More
https://www.lewrockwell.com/2026/10/george-f-smith/when-money-becomes-everything/