With all the calculations, figures, formulas and academically impressive language, it is easy to forget that money is not a physical element or force of energy.

Reading economic texts and articles gives the impression that there are fixed laws that govern it. Every morning, the business news makes assertions, with great confidence, about what factors caused the prior day's capital and equity market fluctuations.

But money is not a physical entity or force. It's the symbolic representation of collective human agreement about exchange of value.

Money is about psychology.

It helps us to understand this when we remember that the earliest forms of money included cowrie seashells. You could walk down to the shore and gather up some money. Everybody agreed that it could be used to trade for things that did have intrinsic value, such as food, animals, clothing, fuel and tools.

Minus the agreement, those seashells were no better or worse than any other naturally occurring, pretty thing.

Money is therefore based on trust that the agreement will continue.

Trust is a particularly volatile exchange between people. It generally takes a lot to earn it, and it's easy to lose.

Notice even that we speak of "earning" trust, implying that there is an exchange of value inherent in the transaction. You pay for trust with your own consistent behavior, which shows you will tell the truth, you will do what you say you will do, you will not choose to harm your trading partner and you will forgive slights.

When I take a piece of paper, called a check, to the bank, sign my name to its back and deposit it into my account, I trust that the numbers on the check will show up in my account statement. I then trust that when I go to the ATM, I will be able to withdraw a quantity of pieces of paper with numbers on them that add up to the deposited numbers from the check.

The first time the agreement is betrayed, we lose our trust. That's why the banking system's worst nightmare is when depositors all lose faith and try to get their "hard" (paper) money out all at once -- the dreaded "run on the bank.”

The stock market is just as firmly based on trust. We buy pieces of paper called stock.

These days, we may never actually receive a piece of paper. We have an account with a broker or other intermediary who holds our ownership in trust, amounting simply to an account number and figures that represent how many shares we own and their current "worth." That worth is an estimate of what somebody else will pay for the stock, assuming the most recent trade represents the future sale price.

It's an expectation based on recent history of human behavior.

These days, the human behavior involved in the stock market is now largely automated. Some estimates are that more than 60 percent of all trades on all exchanges are executed by software programs. Those programs have buy-and-sell algorithms embedded, and changed, by humans.

Essentially, we now have mathematical formulas that establish the boundaries of human trust, fear, expectations, hopes and dreams.

All the fancy figures and complex formulas don't change the fact that capital and equity are forms of money, which are again simply agreements between humans -- tenuous agreements, based on emotions.

Now, don't go running off to the bank to withdraw your funds, or cash out of the stock market.

Psychology may sound flaky, but it's actually very, very reliable. The principles of human behavior have developed over a quarter-million years, passed on from parent to child, through several million generations.

The key is to do business with people you trust and to be trustworthy yourself. If you stick to that, you won't make too many mistakes. And to do that, you have to actively pay attention to your own money, take the time to get to know the businesses and people with whom you exchange your modern form of cowrie shells.

That takes work; you can't delegate it. Ask former investors in Bernie Madoff's firm.

You also have to be trustworthy yourself. The age old adage is, "You can't cheat an honest man."

See? It's not all that complicated.

Sewitch is an entrepreneur and business psychologist. He is vice president of global organization development for WD-40 Company and can be reached at sewitch1@cox.net.