Money: Difference between revisions
Pestergaines (talk | contribs) Created stub for Money |
Pestergaines (talk | contribs) m added a few details |
||
| Line 2: | Line 2: | ||
People wishing to achieve their ends often have to [[trade]]. They can exchange their [[good]]s ''directly'', if they have matching preferences and suitable goods, or ''indirectly'', with the help of another good, the '''medium of exchange'''. | People wishing to achieve their ends often have to [[trade]]. They can exchange their [[good]]s ''directly'', if they have matching preferences and suitable goods, or ''indirectly'', with the help of another good, the '''medium of exchange'''. | ||
A commonly used medium of exchange is called '''money'''. | |||
==Medium of exchange and money== | ==Medium of exchange and money== | ||
Interpersonal exchange is called indirect exchange if, between the commodities and services, that are the ultimate end of exchanging, are one or several media of exchange. | Interpersonal exchange is called indirect exchange if, between the commodities and services, that are the ultimate end of exchanging, are one or several media of exchange.<ref name="Goods">Ludwig von Mises. [http://mises.org/humanaction/chap17sec1.asp "1. Media of Exchange and Money "], ''Chapter XVII. Indirect exchange'', [[Wikipedia:Human Action|Human Action]], referenced 2009-04-27.</ref> | ||
<ref name="Goods">Ludwig von Mises. [http://mises.org/humanaction/chap17sec1.asp "1. Media of Exchange and Money "], ''Chapter XVII. Indirect exchange'', [[Wikipedia:Human Action|Human Action]], referenced 2009-04-27.</ref> | |||
A commodity that comes into general use as a medium of exchange is defined as being a money. Evidently, the concept of a "medium of exchange" is precise, unlike the concept of "money". The point at which a medium of exchange comes into "common" or "general" use is not strictly definable, and whether or not a medium is a money can be decided only by historical inquiry and the judgment of the historian. However, for purposes of simplification, and since there is a great impetus on the market for a medium of exchange to become money, we shall refer to all media of exchange as moneys.<ref name="Rothbard_medium"> [http://mises.org/rothbard/mes/chap3a.asp#2._Emergence_of_Indirect "2. The Emergence of Indirect Exchange"] Chapter 3-The Pattern of indirect exchange, ''[[Man, Economy and State]]'', online edition, referenced 2009-05-05.</ref> | A commodity that comes into general use as a medium of exchange is defined as being a money. Evidently, the concept of a "medium of exchange" is precise, unlike the concept of "money". The point at which a medium of exchange comes into "common" or "general" use is not strictly definable, and whether or not a medium is a money can be decided only by historical inquiry and the judgment of the historian. However, for purposes of simplification, and since there is a great impetus on the market for a medium of exchange to become money, we shall refer to all media of exchange as moneys.<ref name="Rothbard_medium"> [http://mises.org/rothbard/mes/chap3a.asp#2._Emergence_of_Indirect "2. The Emergence of Indirect Exchange"] Chapter 3-The Pattern of indirect exchange, ''[[Man, Economy and State]]'', online edition, referenced 2009-05-05.</ref> | ||
==Origin of money | ==Origin and properties== | ||
Historically, items like shells, livestock, spices, cigarettes, etc. have been in use as money. What constitutes a 'good' medium of exchange and is likely to become money? | |||
==Types== | ==Types== | ||
| Line 21: | Line 21: | ||
... | ... | ||
<references /> | |||
Revision as of 09:10, 6 May 2009
People wishing to achieve their ends often have to trade. They can exchange their goods directly, if they have matching preferences and suitable goods, or indirectly, with the help of another good, the medium of exchange.
A commonly used medium of exchange is called money.
Medium of exchange and money
Interpersonal exchange is called indirect exchange if, between the commodities and services, that are the ultimate end of exchanging, are one or several media of exchange.[1]
A commodity that comes into general use as a medium of exchange is defined as being a money. Evidently, the concept of a "medium of exchange" is precise, unlike the concept of "money". The point at which a medium of exchange comes into "common" or "general" use is not strictly definable, and whether or not a medium is a money can be decided only by historical inquiry and the judgment of the historian. However, for purposes of simplification, and since there is a great impetus on the market for a medium of exchange to become money, we shall refer to all media of exchange as moneys.[2]
Origin and properties
Historically, items like shells, livestock, spices, cigarettes, etc. have been in use as money. What constitutes a 'good' medium of exchange and is likely to become money?
Types
Commodity money
Natural money
Fiat money
...
- ↑ Ludwig von Mises. "1. Media of Exchange and Money ", Chapter XVII. Indirect exchange, Human Action, referenced 2009-04-27.
- ↑ "2. The Emergence of Indirect Exchange" Chapter 3-The Pattern of indirect exchange, Man, Economy and State, online edition, referenced 2009-05-05.