Money, the origin of which is closely connected with the development of commodity relations and the formation of the valuation of products, today is an integral and significant part of the world economy. The history of their formation began many centuries ago, however, even at the moment we can observe their further development and transformation.
Money. Origin
Two theories of the formation of means of payment are officially recognized:
- Rationalistic, more based on history.
- Evolutionary, scientifically researched, created and described in detail by Karl Marx.
According to the first, money appeared as a payment instrument as a result of an agreement between people. With their help, it was much easier to exchange goods for various purposes.
The founder of the second theory is K. Marx, who presented his scientific work “Capital”, where he outlined in detail his own theory of the evolution of means of payment. A product is a person’s material wealth, it is evaluated by quality, time and labor costs in its manufacture. It turns out that each product has an
exchange value. The emerging disagreements in the process of commodity exchange have become a catalyst for the allocation of a special category of equivalent. It was in him that they began to express the estimated value of the products of production. This special category was money, the origin of which is inextricably linked with the development of barter exchange and society as a whole.
Evolutionary theory runs counter to rationalism and proves that the state and the conscious agreement of people did not have the proper impact on the origin of money. In short, the created product already has a price, which is formed on the basis of yesterday’s demand criterion. Up to this point, any thing does not carry monetary functions.
Payment Functions
The cost of goods express money. The origin, nature and function of them is important to know. Tasks of means of payment are reduced to the following points:
- The measure of value. The main function that confirms the value of money as the world value equivalent, which is expressed in the price of goods.
- Medium of circulation. Responsible for the process of movement of products on the market according to the scheme: product-money-product.
- Instrument of payment. Money is an intermediary in the event of an exchange of goods, as the result of a transaction is not always cash settlement. Often firms use borrowed funds or loans, as well as deferred payment. Funds paid after a certain period serve as the final stage of the transaction.
- Means of accumulation, investment and savings. Money, the origin of which is associated with the exchange of goods, is a means to acquire additional benefits and improve the quality of life. Therefore, many are busy with increasing wealth today.
- World money. They serve as an international means of payment and expression of public wealth. Previously, gold coins played this role, but today it is also foreign currency, and a reserve share in the IMF, and special drawing rights.