What is Money, (not money)?

Question

Money plays a major role in our experience and I find that very few people explore the idea of what it is. This question concerns Form.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. - Money, Wikipedia

The above definition describes the function or behavior of Money but fails to identify if it is an item or a record, or a payment? As defined above, Cow could be Money. "That's right" you say; and it used to work that way. However, a liquidity index, the efficiency of moneys function, indicates Moneyness. That's why Cow is less in Moneyness than lightweight Government Notes.

OK fine, but what is Money? A store of Value? Cow (and Government) disintegrates over time. Gold does not. Getting closer?

Forms are the essences of various objects: they are that without which a thing would not be the kind of thing it is - Theory of Forms, Wikipedia

Confidence that we will live another day seems to be the essence, or the Form, of Money. Absent that, Money becomes nothing; Gold reverts to Metal. Maybe that's too far a leap, so atleast we could say that confidence in living another day is essential to Money. Store of Value includes said confidence. So then Value is essential to Money. OK, why is Value missing from the definition of Money? And, ...what is Value?

In any case, Gold seems as close to ideal Money as possible. It is literally elemental and practically indestructible, unlike Diamond, for example. Interestingly, highly addictive dope has significant potential of Moneyness. Moreso than Gold it seems.

Money is transferable value. Without those two, it's not Money. Right?

What is Money? As a construct of, for, and by the People, Money is complicated. I'd like to hear from you. What is it?

Answer 1

Aristotle in the Politics wrote about the nature of money, and his views remained highly influential at least until the end of the 19th century. According to Aristotle the purpose (telos) of money is threefold:

• Money is essential for trade because of the inefficiency of barter. The primary purpose of money is therefore as a medium of exchange.
• Money is a common measure of things, allowing value to be compared.
• Money is a store of value, allowing saving.

Later economists added a fourth function, as a standard of deferred payments.

As to the form of money, Aristotle noted that while different materials have been used, metals seem well suited for the purpose. He identified that money should be durable, divisible, fungible, portable and have intrinsic value. Gold and especially silver have proved popular choices for money over the centuries because they meet these requirements pretty well.

As to the other things you mention that could be money... Cows are not durable (they die), not divisible (two halves of a cow are much less valuable than a whole cow), are not fungible (my cow and yours may not be the same weight, or equally healthy, or equally fertile). Diamonds are not easily divisible and are not fungible (every diamond is slightly different, so you would need to weigh them and examine them for flaws, clarity, etc.)

Many other things have been used as money, including sea shells, wooden sticks and chocolate. Today the world almost exclusively uses fiat currencies, which have no intrinsic value and are only considered valuable because governments enact laws that require that they can be used to settle debts.

Answer 2

The characteristic that sets money apart from other goods is that it is accepted and offered as a medium of exchange.

Other properties of money, like being a store of value or medium of deferred payments, are a consequence of money's use a medium of exchange. You store some of your assets as money so you can easily exchange it in the short term. There are other kinds of assets you might use as a store of value, e.g. - diamonds or stocks and shares and that sort of thing.

A value is something that you act to gain or keep. For example, you value food and that means you act to get food and to keep other people from eating all your food. There is no quantity that measures value. Goods are valued because they solve a problem and in general it's not a good idea to think of value as a measure. Rather, value involves ranking goods ordinally: you value A more than B if you'd give up B for A. That doesn't mean there is some quantity called utility where A has more utility than B.

To understand more see The theory of money and credit and Human action by von Mises, and 'Atlas Shrugged' by Ayn Rand, which includes a speech about money:

capitalismmagazine.com/2002/08/franciscos-money-speech/

Answer 3

Money is a commodity.

If the price of 1 cow is 30 chickens then the ratio is 30:1. Similarly, if the price of a shirt is $40 then the ratio of dollars to shirts is 40:1, which is to say that 40-dollars can be exchanged for 1 shirt.

Money is consumed gradually like capital, but what makes money different from most other commodities is that it is consumed, gradually, by the process of exchange rather than by repeated employment in production processes.

Answer 4

UNIVERSAL EQUIVALENT: An object that is the measure by which all commodities are compared and exchanged on the market. In capitalism, this function is eventually taken over by money, first precious metals then paper money.

I guess in terms of "use value", its physical makeup, money is well suited to being the "universal equivalent", and historically has been used in that way.

The question becomes more interesting, I think, when we think about "Money" which is not used up when it is used as the universal equivalent, as in finance, because then, it is quite unlike the means of production, raw materials, and labour. Neither is it "capital", because capital is used up (then reproduced) in its circulation.

Does that mean that "Money" is a commodity par excellence, or not at all?

Answer 5

A Monetary system is an information system that acts as an accounting system to track who created value and who is due value. Money acts as the data. You can think of a Monetary system as a physical implementation of a spreadsheet. Instead of having rows that list everyone's name and a column that lists how much value they created (in numbers), we ourselves are the rows and the money (coins, cash, credits) is a physical representation of numbers. In the island of Yap, the accounting system is public (Stone money in the center of their village). This type of public ledger is used in BitCoin as well. In coin and cash, the ledger is distributed and private. This is like CloudCoin (Not the cryptocurrency). The purpose of money is to help us economize. The essence of money is that it cannot be counterfeited. Like data, money must be "true" in order to be of use. The worlds most perfect currency is CloudCoin. See http://CloudCoinConsortium.com Note that the most important component of a monetary system is the human mind. Peoples who are not smart enough to add or subtract cannot have monetary systems. Money tells people what to do and we use this "data" to make decisions. Without money are civilization would collapse as barter limits grows to only a few hundred people. The word "money" comes from the Greek word to Advise or Command.

Answer 6

Money is the special commodity that can be exchanged with all other commodities that are in the market. Money is, according to Marx, the thingnified object that contains human-labor-in-general ( but it is a "dead" labor in the form of thing visible not "live" labor ). "Money" can be used as an independent commodity, too, like when you look at gold rings or wire bonds in the PC's core memory. What distinguishes money from the other commodity is the characteristic that since it has the nature that "every commodity can be exchanged thorough Money, even sometimes human's conscience, ( see the war award in the war time in middle age ), so that people "pursuit" or try to "amass" it. As Roy Ronston points out at the message line, it is interesting that there are many money-related words, such as "capital" ( punishment ), a"mass"-acre or "mass", "save" for the save in the heaven in religious world, credit as a trust, debit starts with d same with as "debt", currency like stream ( or meaning now ( between the countries )). Money "can walk alone". Stocks are bought and sold independently regardless of its value and the "real" economic atmosphere. Money thorough the "Commodity Fetishism", turns the human-relationships into the economic-relationships ( therefore Money stands at the throne of its kingdom ). Money would be abolished only after conquering the Reification, which "currently", personally thinking is impossible. ( We would have to wait probably until the real A.I is born. )