Consider a charity providing malaria nets. Somebody has to make the nets. Somebody has to distribute them. These people need to eat, and would prefer to have shelter, goods, services and the like. That means that you need to convince people to give food, shelter, etc. to the net makers. If you give them money, they can simply buy their food.
This of course raises the question of why you can’t simply ask other people to support the charity directly. But consider someone providing a service to the charity workers: even if they care passionately about fighting malaria, they do not want to run out of resources themselves! If you make food, and give it all to the netweavers, how can you get your own needs met? What happens when you need medical care, and the doctor in turn would love to treat a supporter of the anti-malaria fight, but wants to make sure he can get his car fixed?
In a nutshell, people want to make sure there will be resources available to us when we need them. Money allows us to keep track of those resources: if everyone treats money as valuable, we can be confident of having access to as many resources as our savings will buy at market rates. If we decide instead to have everyone be “generous” and give in the hopes that others will give to them in turn, it becomes impossible to keep track of who needs to do how much work or who can take how many resources without creating a shortage. You can’t even solve that problem by having everyone decide to work hard and consume little; doing too much can be as harmful as doing too little, as resources get foregone. And of course, that’s with everyone cooperating. If someone decides to defect in such a system, they can take and take while providing nothing in return. Thus, it is much easier to mange resources with money, despite it being “not real”, even in the chase of charity. Giving money to a charity is a commitment to consume less (or to give up the right to consume as much as you possibly could, whether or not your actual current spending changes), freeing up resources that are then directed to the charity.
Consider a charity providing malaria nets. Somebody has to make the nets. Somebody has to distribute them. These people need to eat, and would prefer to have shelter, goods, services and the like. That means that you need to convince people to give food, shelter, etc. to the net makers. If you give them money, they can simply buy their food.
This of course raises the question of why you can’t simply ask other people to support the charity directly. But consider someone providing a service to the charity workers: even if they care passionately about fighting malaria, they do not want to run out of resources themselves! If you make food, and give it all to the netweavers, how can you get your own needs met? What happens when you need medical care, and the doctor in turn would love to treat a supporter of the anti-malaria fight, but wants to make sure he can get his car fixed?
In a nutshell, people want to make sure there will be resources available to us when we need them. Money allows us to keep track of those resources: if everyone treats money as valuable, we can be confident of having access to as many resources as our savings will buy at market rates. If we decide instead to have everyone be “generous” and give in the hopes that others will give to them in turn, it becomes impossible to keep track of who needs to do how much work or who can take how many resources without creating a shortage. You can’t even solve that problem by having everyone decide to work hard and consume little; doing too much can be as harmful as doing too little, as resources get foregone. And of course, that’s with everyone cooperating. If someone decides to defect in such a system, they can take and take while providing nothing in return. Thus, it is much easier to mange resources with money, despite it being “not real”, even in the chase of charity. Giving money to a charity is a commitment to consume less (or to give up the right to consume as much as you possibly could, whether or not your actual current spending changes), freeing up resources that are then directed to the charity.