Georg Simmel’s Philosophy of Money: Understanding the Creation of Value Through Distance

By a Warehouse Worker Who Reads Too Much

The Philosophy of Money isn’t your typical light reading. Georg Simmel, a German philosopher who somehow managed to smuggle poetic elegance into the cold world of economics, offered a stark yet profound perspective on how we relate to the things we make, buy, and sell.

At its core, his argument is simple: value is created by separation.

Humans craft objects, distance themselves from them, and then attempt to reclaim those objects through systems like money.

If this sounds a bit like Sisyphus rolling his rock up a hill, you’re on the right track.

It’s a loop—a dance between humans and their creations.

Photo by Jonny Gios on Unsplash

Distance Creates Value

To get to the heart of Simmel’s argument, let’s dissect it piece by piece.

Imagine a blacksmith in a medieval village. He forges a sword, pouring his sweat and skill into its creation, marveling at its gleam as it cools.

But the moment that sword leaves his hands—offered to a trader or sold at a fair—it becomes something else.

It’s no longer just metal shaped by labor; it’s a commodity. It’s alienated from its creator, existing independently in the impersonal realm of exchange.

Simmel believed that this separation—the act of distancing—imbues the object with value.

Why? Because once something is out of our reach, we assign it greater significance.

Desire grows in the absence of possession. Think of Gollum obsessing over the One Ring, or Jay Gatsby pining for Daisy Buchanan—what they couldn’t easily have became all the more precious.

This isn’t just about things, though.

It’s about relationships, dreams, and ideals. We’re wired to want what we can’t touch, and the entire market economy exploits this fact.

The more we desire, the more we produce systems—like money—that allow us to chase what feels distant.

Photo by Jonny Gios on Unsplash

Explaining It Over a Smoke Break

Let’s say you’re my apprentice at the warehouse, stacking pallets and cracking jokes to make the shift tolerable.

At some point, you lean over and ask, “Why do people care about money so much? It’s just paper.”

Here’s how I’d put it:

“Kid, think of a candy bar. If you make it at home, it’s just chocolate and sugar—yours to eat, no fuss. But if you see that same bar in a store, neatly wrapped and priced, it feels special. It’s not just candy anymore; it’s a thing you have to earn.

The wrapper, the price, the distance between you and the chocolate—that’s what makes it valuable.

Money is the bridge we built to cross that distance. Without it, the market as we know it wouldn’t exist.

Every shift you work here, stacking boxes, you’re building that bridge. But don’t let it own you.”

At this point, you’d probably shrug, mutter something about capitalism, and ask for a cigarette.

Fair enough. But the idea would stick, I think.

Money: Miracle or Curse?

To Simmel, money was both a miracle and a curse.

It allowed us to compare the incomparable: a loaf of bread versus a bottle of wine, an hour of labor versus a night at the theater.

But it also introduced alienation—a cold detachment between makers and their creations, buyers and sellers, even between people themselves.

Here’s a quick comparison:

Pre-Money EconomyMoney Economy
Direct connection between creator and objectObject becomes a commodity, traded in markets
Value tied to personal or communal significanceValue assigned by the system of exchange
Example: A farmer barters wheat for a neighbor’s milkExample: A farmer sells wheat, buys milk with cash

Now, here’s where the dark humor kicks in.

Simmel’s market economy sounds eerily like online dating. Swipe left on personal connections; swipe right for commodified exchanges.

Who’s more alienated—the medieval swordmaker or the poor schmuck trying to date in a world of algorithms and curated profiles?

The Market and Its Monsters

This system of commodification, Simmel argues, is both empowering and dehumanizing.

It gives us the ability to trade, to innovate, and to build global systems of exchange. But it comes at a cost—one we often don’t realize until it’s too late.

AspectEmpoweringDehumanizing
MoneyFacilitates exchange across culturesReduces relationships to transactions
CommodificationCreates trade opportunitiesAlienates makers from their creations
Value CreationEnables innovationFuels endless desire for possession

If this all sounds bleak, well, it kind of is.

The modern economy often feels like a Kafkaesque maze where we endlessly chase objects, experiences, and dreams that are always just out of reach.

It’s like a hamster wheel, only with rent payments and credit card debt.

What He Missed in the Chase

Philosophy of Money is a work of profound insight, but like any grand theory, it has its blind spots such as:

Too Abstract for the Grind

Simmel’s ideas are as elegant as they are detached. He weaves philosophy and economics into something almost poetic, but critics argue that his theories float a little too high above the actual realities of daily life.

In focusing on abstract relationships between distance and value, he misses the material struggles of those who make the economy tick—like the warehouse worker stacking boxes for someone else’s profit.

Ignoring the Power Struggle

While Simmel zeroes in on how money alienates us, he sidesteps the bigger question: who benefits? Unlike Marx, who dove headfirst into class struggle and exploitation, Simmel doesn’t confront the systems of power that enforce inequality (at least to my knowledge).

Alienation isn’t just a philosophical quandary; it’s a weapon wielded by the powerful to keep others running on that hamster wheel of value.

A Rosy View of Money

Simmel saw money as a tool that liberated us, creating bridges to what we desire. But here’s the thing: those bridges don’t look the same for everyone. For some, they’re golden highways; for others, they’re shaky rope bridges over a canyon of debt.

His optimism about money’s potential to equalize exchange ignores how it often entrenches inequality and widens social divides.

Blinders to Other Economies

Simmel’s framework reflects his Western, early-20th-century vantage point.

His ideas don’t account for non-capitalist systems like gift economies or subsistence farming, where proximity and communal relationships often trump alienation and distance.

Not every culture chases value in the same way, and not every economy puts price tags on connection (but most do).

Universalizing Human Desire

At the heart of Simmel’s philosophy is the idea that humans inherently long for what they don’t have.

But is this universal? Critics argue that he projects a Western, individualistic mindset onto all of humanity, ignoring cultures where shared creation and immediate connection are more prized than the unattainable.

Finding Hope in the Abyss

Simmel’s ideas might leave us in a dark place. If value is born of alienation, are we doomed to forever chase what we cannot have?

As I sit here, the hum of the warehouse still ringing in my ears, I think of Nietzsche’s abyss staring back.

The endless pursuit of value can feel futile, even absurd.

But here’s the twist: Simmel doesn’t leave us with despair.

Instead, he offers a glimmer of hope. Understanding these dynamics gives us power—the power to question what we value and why.

We can choose to build systems that prioritize human connection over cold exchanges, craft relationships that resist commodification, and find meaning beyond the market.

So, what’ll it be? A life spent running after alienated objects—or one where we redefine what matters most?

It’s our call, and I hope we’re bold enough to make the right choice.

Now, excuse me while I finish this whiskey. Tomorrow, there’s another shift, another mountain of cardboard, and another bridge of distance to cross.

But tonight? Tonight, I think I’ll dream of a world where value means more than just the chase.

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