If you had your wealth in the form of cattle, an outbreak of disease could destroy your wealth. If you had it as toilet paper, it could be destroyed by a flood. No form of wealth is immune to devaluation.
Yes but in your examples, it was the actual thing that was harmed. In my example, I said something else was destroyed. The money would smell just as good as it did the day before, but now it would be backed by nothing. Unlike the cows and toilet paper, it would still exist.
Money makes things more flexible. My employer might have a house in town 'A' that I could live in, but I prefer to live closer to my family in town 'B'. Also, I'd prefer to know that if I were to change jobs, I wouldn't be evicted from my house.
I don't think you're following my example. I'm basically saying that your job would pay your bills instead of paying you, directly. The only thing that would be changing in your life is the fact that the money would never touch your hands, it would go directly to the bills or whatever. You would live where you live and how you live, only everything would be paid for. It's a hypothetical situation. You're talking about more of a living stipend.
Why does gold have value?
Good point. I once argued the same thing. It's just metal. But for whatever reason, it does have value and that can't be denied.
What gives gold its value, except for the same type of mutual agreement that gives paper money value?
Gold is also seen as beautiful to people. People want gold to wear it. People want money to "get rid of it" so they can get other things. Furthermore gold does not need to be backed by anything (just the way it is), money, however, does. Why is some currency worth more than other? It depends on what it's backed by. Gold is gold. But again, technically it is just a metal.
I was comparing the money to the hammer. Both are tools; neither are the thing you ultimately want, but both enable you to get it.
If I found someone who needed engineering services and had a house I liked he was willing to part with, I could trade my services for his goods. However, it can be difficult to make this work, so money is much more convenient.
Again, money is just a substitute for something else. It, by itself has no value. It's what it represents. That's why American businesses don't except Canadian currency. It's basically just paper. But what does that paper mean? If I have money then that says I did or sold something to earn this. That something gives the money it's value. We often speak backwards by saying "This house is worth $200,000." No, in reality $200,000 is worth that house. 20 years from now (for this example we'll ignore appreciation), $200,000 might not be worth the same house. However, $300,000 might be worth that house, meaning the value of the house did not change, the value of the currency has changed. That's because it holds no weight on it's own. Currency is only as strong as what it's backed by. I went to Trinidad & Tobago last year and paid $20 (their dollars) for a coke. Obviously their currency is less valuable then American currency. The coke was the same product and based on the currency exchange, had the same value.
Nobody's prohibited from bartering; it just makes more sense to use a common medium of exchange like money. If a plumber wants breakfast, it's much easier for her just to pay cash for it than to search for a restaurant with a stuck drain to offer her services to.
So in this type of system, is money not unique? It's the only thing in the entire economic system like that. That's why I said you can;t just compare to any good or service. It doesn't serve the same purpose as any other good or service. It is completely different.