The Semiotic Theory of Money (1b)

Article by Chris Waller 2012
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Now that we have established the essential difference between the dyadic structure and the triadic structure, I want to move on to their application in the economic frame.

The Economic Dyad

We have seen how the dyad is a simple stimulus-response structure. It is a reciprocal mechanism in which there is no scope for misunderstanding or error. In economies, its equivalent is the barter transaction, the straightforward exchange of goods or services. Each party to the transaction gives, and each receives and the goods are physically exchanged. For many thousands of years prior to, and even into, the arising of proto-urban societies, this form of transaction was sufficient to allow the functioning of their primitive economies. It was the barter economy which necessitated the seasonal movement of nomadic peoples and which, in consequence, also condemned them to a continuing nomadic existence.

It had the advantage that the goods being exchanged were physically present at the exchange and could be examined for quantity and quality, but it also imposed sever limitations. For example, if a producer of grain wished to exchange grain for both cattle and wine, then he would have to negotiate two exchanges. However, if the wine producer did not want grain, only spices, then the grain producer would have first to exchange grain for spices, and then exchange the spices for wine - assuming of course that the spice merchant would accept grain. It can this be seen that the wheels of a barter economy would have turned painfully slowly and would have been very inefficient.

In the same way that the dyadic structure is associated with the lower orders in the evolution of species, so in economics it is associated with low-order economies. Those peoples which have remained with the barter economy have been condemned to a style and standard of living which has changed little since Neolithic times.

The Economic Triad

During the fourth millennium BC, money came into existence. With money came a radically new concept - that goods or services could be exchanged for coinage which could then subsequently be exchanged for other goods and services. In other words, goods, instead of being directly exchanged for other goods in a barter transaction, could now be 'translated' into money. The money represented the value embodied in the goods, this value being their economic 'meaning'. We can now draw a parallel with the structure previously described.

triadic image 3

Trader 'A' enters a market and sells his goods for money which represents the value of those goods. Subsequently, Trader 'A' meets Trader 'B' and buys goods using the money derived from the first transaction. This then gives us the following structure:

triadic image 4

It can be seen that this structure parallels the communication between the sign-utterer and the sign-receiver shown previously. Again, I have shown the two triads in solid lines to indicate the way in which the elements are bound together. The broken line shows the net communication, that is, the ultimate exchange of goods between the traders. In this transaction there is a 'translation' of goods into money by Trader 'A' and a second 'translation' of money into goods by Trader 'B'. The net result is as if there had been an exchange of goods between the two traders, but without any actual physical transfer taking place.

One can now see the analogy with spoken language. Prior to the invention of language, if two proto-humans wished to communicate about an object then the physical presence of that object would have been required since no language existed to allow its discussion in the abstract. Analogously, prior to the invention of money, if two traders wished to make a transaction, then the physical presence of the goods was required. With the invention of language then the two participants could simply exchange abstract signs regardless of the presence, or otherwise, of the object under discussion. Similarly, with the invention of money, it became possible for traders simply, to exchange value rather than actual goods.

Language conferred upon the intellect the freedom to exchange ideas, which has resulted in the almost unimaginably complex world in which we live today. The invention of money liberated economies in the same manner and allowed the creation of wealth to a degree which our Neolithic forbears would regard as supernatural. However, while language brought with it almost unlimited intellectual freedom it brought also profound problems which, for two and a half thousand years, have continued to exercise the minds of philosophers. The economic freedom granted by money has also resulted in a catalogue of problems, equally profound, but which have only been under discussion for a little over two hundred years. I want now to go on to seek a clarification of these problems by an examination of the parallels between money and language.


  • Money as language suggest that there exists a 'grammar' and 'syntax' of money, that is, the way it is used may enhance or diminish (or even destroy) its 'meaning' (value).
  • Money as communication implies money as culture - the Creation Myth in the Book of Genesis may be interpreted semiologically and thus reveal parallels with the 'creation' of the world of money, as also may the story of the Tower of Babel.
  • A semiological analysis of money indicates that, in order for money to fulfil its function, it must convey to us more about its source. Money must become more 'articulate'. In this way the consequences of Gresham's Law (that 'bad money drives out good') can be avoided. Good quality money should be identifiable as such, 'Electronic' money is more 'real' than notes and coinage.

Part 1  Part 1b  Part 2  Part 3  Part 4


Chris Waller - Permission granted to freely distribute this article for non-commercial purposes if attributed to Chris Waller, unedited and copied in full, including this notice.

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