Money

Subjective Value Theory sets the Austrian School of Economics apart from all other mainstream schools of economic thought. Austrians would refer to all other schools of economic thought as Keynesian (Monetarists, MMT, even Marxists).

All value is subjective, meaning it derives from the human mind. There is no fixed cost or inherent value, because value has evolved from the value scales of human minds, or the subjective value of human actors in general.

This being said, one might wonder what money is.

In a society with no money, there is direct exchange. Goods being exchanged directly for one another.

I have apples, Tom has oranges. At some subjective point, we discuss amongst ourselves a relative amount to exchange for each good we desire. We are thus bartering.

As societies grow, this rudimentary form of exchange might not function. It may take a long time to arrive at a price.

Like all things, everyone economizes. This economization is also applied to time, as time is scarce. All goods are scarce.

People want to facilitate processes, and thus new technologies and ideas arise. Technologies economize time by facilitating life processes.

In the case of exchanges, one might desire a good the other does not possess. For this reason a medium arises, naturally. It is universally accepted by many as a means to facilitate the transaction. This is money.

Money leads to interpersonal exchange. This is exchange which includes a medium.

Money, like all things, is subjectively valued. A commonly accepted idea is subjectively accepted, such as mathematics, physics and many other theories. Like the law of gravity, Money is an applied theory. Theory describes what is, or what could be. Experience applies the theory.

Many times experience can create new theories, which someone later transliterates. As mentioned, this would be called scholarly work.

Mises found that precious metals were most used as this commonly used medium. People valued this shiny metal. No force was needed for people to value this element.

A large misconception is that money, like many other things, is a theory that must be enforced by some entity. This entity they believe, must be a monopoly.

Little do people realize that theories are not enforced, they are created with access to further ideas built from experiences. It is all voluntary.