The Tories have finally found their magic money tree. Theresa May, busy chasing crows through her Van Gogh wheat fields under a dark and sinking sky, suddenly felt a cold wind on her back, heard a rustling that sounded like promises and saw, looming monstrously above the endless puddle of grain, a thicket that wasn't there before.

There, in the suffocating web of weeds and thorns, its bark glistening unhealthily, its sap running like blood, the magic money tree stood. Splattered root to branch with blood and dirt, poison rubies drooping cloudy and uncut from its twigs, the magic money tree loomed over her, a vast overgrown weed, tangled in on itself, whirling around the bones of the small creatures that tried to make a home in its branches. Climb me, it seemed to whisper, in the phlegm-gurgling stutter of something rotting from within. If you can climb to the top, it said, you will get everything you've ever wanted. Its crooked spider's web of spindles seemed to reach up into infinity, into the sodden wood that enclosed the sky. One billion pounds, the tree said. One billion pounds in extra funding for government services in Northern Ireland. Climb.

This is, if we take Tory economics seriously, the only possible explanation for what could have happened. After spending the election campaign repeatedly attacking Labour's fully costed manifesto for depending on some wonderful magical money tree – as everyone knows: money doesn't grow on trees; it's ground down from the bones of people who die of starvation in their own flats after having their benefits cut – the Conservatives have suddenly found a spare billion to secure a deal with the DUP.

So far, there's been no indication of where the money will actually come from – when asked by Labour's Emily Thornberry in Parliament, First Secretary of State Damian Green just answered that "we can afford this because we have a strong economy after seven years of Conservative government". If that's the case, couldn't that money have been put to use keeping people fed and healthy over those seven years, rather than when Theresa May needed it to save her own premiership? If a billion can arrive out of nowhere, why all the fuss over who would pay for arts education and a few extra bank holidays?

When the Tories first started talking about the magic money tree they claimed didn't exist, it prompted a bevy of careful and serious responses. What usually gets talked about is the "money" bit. Actually, the line goes, governments really can give out money they don't have; a contingent of serious economists have for a long time been insisting that more spending is exactly what they should do during times of economic stress. The government budget is not like a household budget – after all, not many householders have their face on the currency. More government borrowing and spending – especially, as it happens, on benefits – is good for the country's finances; it puts more cash in the hands of people who would otherwise be saving every penny in terror, and helps them spend again.

There's an instinctive notion, common to middle-class Tories, that if you give money to poorer people they do what any self-respecting bourgeois does, and stash it away in some tax avoidance scheme. But money circulates. Put a pound in someone's pocket and it'll go on an incredible little journey around the country, passing from person to person and enriching them all for a moment, before eventually coming home. State investment doesn't take money out of the economy; it's what puts money into it. The billion pounds for Northern Ireland is an insult, not because it's not needed, but because they could have done this all along, and they chose not to.

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That's the money. But what about the magic? What about the tree?

It's strange: if you had to describe exactly where money comes from to someone who'd never heard of the concept, you could do a lot worse to say than it grows on a magic tree. Money is, as every stoned teenager has independently discovered, really just paper. More properly, it's a social relation, an intangible concept that attaches itself to a particular object and gives it value – first gold and silver, then cash, now data. You can create money on demand – banks create millions every day – because all you need is the right spell. This is a very basic form of functional magic: something unreal is given the power to create or destroy nations and people, so long as people believe in it.

The magical function of money is written into every aspect of its operation. In Representing Capital, his swirling account of the structures and categories behind Karl Marx's Capital, Fredric Jameson notes that the fundamental problem of money is that of equivalence. Money is a universal solvent, a medium that allows us to trade different objects of varying values, but how can two objects, dissimilar in every way, ever be measured against each other? "Money," he writes, "is the crystallisation of the contradiction and not its effacement… money has not solved the riddle of the equation – how different things could possibly be the same – but it has turned that conundrum into coin of the realm which will now allow us to forget about it and go about our business." It's a congealed impossibility. It's a trick.

It's also suspiciously and unpleasantly tree-like. Money, when lent out, accrues interest; it grows, forming grisly dendrites that seem to come from nowhere at all. The first known philosophical objection to usury in the Western canon comes from Aristotle: in the first book of his, Politics, he writes that "money was intended to be a means of exchange, while interest represents an increase in the money itself. We speak of it as a yield, as of a crop or litter; for each animal produces its like, and interest is money produced out of money. Hence of all ways of getting wealth this is the most contrary to nature." Aristotle's objection is that to grow and produce offspring – in Greek phusis, springing forth – is in the nature of living things. But money is inert. It ought not to grow. But it does. An undead tree, leafless, rotting from the inside, but still monstrously growing. A magic tree: a tree fed by necromancy and the dark arts.