The Role of Money in my life

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2 years ago

Everyone seems to know from childhood what money is, why it is needed and what role it plays in the economy and life. Meanwhile, a complete answer to the question "What is money?" difficult not only by people far from the economy, but also by well-known scientists-economists. For some, money is just a piece of paper, for someone - where all human actions are aimed at, but for someone money is the meaning of life!

The opening of books on economics and even the classic works of world famous scientists, a curious economist will notice that the higher an author's economic status, the lower he tends to give an accurate, comprehensive definition of the undoubtedly basic economic concept.

Moreover, one should be given recognition in the courage of the lights of the economy who dared to define the type: "Money is what it really is", "Money does it", "Money does not exist naturally. characteristics, but where we provide a numerical value with the help of a conditioned procedure "," Money is a temporary container of purchasing power ". Adam Smith spoke in an original way about money, emphasizing that we use money, freeing ourselves from it, meaning it is a universal kind of thing that one can only use by giving to other people, while other types of things are used by people by taking, taking.

Often, the essence of money is characterized by listing the functions it performs.

From these positions, in most economics and finance books, money is defined as any commodity that represents a means of circulation (payment for other goods and services), a unit of counting (measurement of value) and a means of preserving (aging) wealth. Sometimes money can be associated not with three, but as many as five functions: mode of circulation (exchange), method of payment, method of accumulation, steps of value, steps of deferred payment. In some cases, money is associated with another function, or rather, the role of world money. Raizberg BA -Course of Economics. Textbook.

Money in its development appeared in two forms: real money and signs of value (alternatives for real money).

Real money is money in which the nominal value (the value indicated here) corresponds to the real value, i.e. the value of the metal from which it was made. Metal coins (copper, silver, gold) have different shapes, first piece, then weight. Coins in the later development of money circulation have unique features established by law (appearance, weight content). The circular shape of the coin became the most convenient for circulation (less erased), the front part of which was called obverse, the back - the reverse and the side - the edge. To prevent coin damage, the flock was cut. VI Vidyapin -Bachelor of Economics. Volume 3

Money acts as a special material object in various civil civil relations. These are the main purpose of the legal relationship with credit agreements (debt agreements), settlements (cash and non-cash). Money can also act as a counter-provision in most contracts.

Money can be exchanged and divided into objects, their value depends on the size of the currency units indicated to them. As a universal equivalent, they can replace anything else and are used to assess some intangible benefits. Andreev VK, -Legal regulation of business activity.

The emergence of money. In economic literature, two concepts of the origin of money are primarily considered: rationalist and evolutionary. The first concept was passed by Aristotle in his work "Nicomachean Ethics". He reigned until the end of the 18th century. and explained the origin of money as a result of an agreement between people. Some modern economists (JK Galbraith, P. Samuelson and others) interpret money in a similar way. The concept of evolution explains the origin of money as a product of the development of commodity production and the process of exchange. The most consistent supporter of this concept was K. Marx, who taught that value is created by abstract labor, but it cannot be noticed in a commodity even with a microscope. As a social asset of a commodity, value can only be expressed by equating one commodity with another in the exchange process, i.e. as an exchange rate.

The essence of money. Money is a special commodity that serves as a universal equivalent. In the literature, there is also the meaning of money as a way of expressing to society the economic value of a virtue. It is a completely liquid exchange medium, meaning the product with the greatest sales capability. Liquid product means an easy-to-buy product. Money is one of the most important elements in the economic life of society. Like KR McConnell and SL Brue in Economics, People Sending Money. Because of them they suffer, they work for them. They are welcome! There are the most specialized ways of getting them, the most specialized way of applying them. Money is the only commodity that can not be used otherwise to remove it. They will not feed you, dress you, give you shelter, or entertain you until you spend or invest them. People will do almost everything for money, and money will do almost everything for people. Money is an enticing, repetitive, mask-changing puzzle.

Historically, it has happened that gradually the function of the universal equivalent began to function as metals and not immediately gold. In Sparta there was iron money, in Rome - copper. For centuries, silver played the role of a universal equivalent, and it did not immediately give its position to gold. For a long time this role in the countries of Western Europe was played by gold and silver at the same time. Since the end of the XIX century. only gold began to act as a universal equivalent, and from this moment the form of monetary value begins.

Gold plays the role of money because, in comparison to other goods, it has a number of advantages: diversity, preservation, high-quality homogeneity, portability (high cost in a small quantity) , its relative natural instinct, durability that allows money to be used for a long time, real, made up of the complexity of making counterfeit money. Bazylev NI, Gurko SP - Economic theory

Entrepreneurs in their economic activities continue to communicate with the currency units of their country and foreign countries. Money is a category of historical nature in commodity making. Before the money was made, the exchange took place.

The oldest types of money included goods that were used daily, and in exchange served as universal equivalents: food (beef, salt, tea, grain, rice, etc.), fur (skins of fur animals) ), tools (hoes, axes, knives, shovels), jewelry (rings, bracelets, chains). Gradually, the role of money was passed on to metals, first in the form of ingots of various shapes, and from the 7th century. BC. - in the form of mined coins. Before capitalism, the role of money was played by copper, brass, silver, and in some countries (Assyria and Egypt) even in ancient times (two thousand BC) - gold. With the development of commodity production, gold and silver became commodities.

We are more accustomed to paper money. They first appeared in China in 812. The earliest issues of banknotes in the world were made in Stockholm in 1661. In Russia, banknotes (bills) were first introduced under Catherine II (1769).

Honoré de Balzac argues that "money is the sixth sense that allows us to enjoy the other five." Economists refer to them more strictly and dry. A. Smith called money "the wheel of circulation", K. Marx - "universal equivalent." Bulatov AS -Economy

Metallic theory of money. One of the earliest theories of money was the metal theory of money. The representatives of early metallism were the English mercantilists: William Stafford (16th century), Thomas of Maine (VXII century) and the Italian mercantilist Galliani (8th century).

The emergence of metal theory is associated with the emergence of mercantilism. Mercantilism is a current economic thought, considering the accumulation of money as the main source of social wealth and asserted in the development of goods.

The ideas of mercantilism were especially developed in the 16th century. and the 17th century, when the development of factories and commercial capital gained considerable importance in the economics of Western countries. The accumulation of money and precious metals was the main purpose of the commodity and served as the most important prerequisite for the development of industry, commodity, and the accumulation of funds in the country.

The theory of metal is based on the basic premise of mercantilism that gold and silver are the only types of wealth. So it follows the statement that gold and silver are the only kind of money. Continuing from misconceptions about the essence of money and not understanding the laws of money circulation, money forms fetishist views. They argued that gold and silver were natural money, that they were money according to the nature of metal. Accordingly, they designated these precious metals in the functioning of bearers of social relations.

Metal workers are confused by the simple exchange of goods in the circulation of goods. That is why they do not combine such monetary functions: one form of payment and one form of circulation. They believe that money fulfills only two functions: a measure of value and a means of accumulation. In this regard, metalworkers refused to replace gold with any other monetary symbol. They generally consider banknotes to be something unnatural.

From the above it is clear that metalworkers did not try to understand the laws of money circulation, but only tried to understand their essence.

Nominalistic theory of money. The essence of nominalist theory lies in the assertion that money has no value of its own and is merely a conditional abstract unit, a simple label and a number of sign established by the state. Proponents of this theory believe that money has no internal connection to goods and receives its power from the state. The views, close to the nominalists, were expressed by the ancient philosophers: - Plato and Aristotle.

Money, - says Aristotle, - does not come by nature, but by law. They are recognized by the method for measuring the value of a good.

The further development of nominalistic views on money is associated with the widespread practice of counterfeit coins. This was the case in the Middle Ages, when lawyers justified the falsification of coins, arguing that the value of money and money itself was entirely created by the power of the state.

The views of 17th-century nominalist theory were developed by English economists: Nicholas Barbon, George Berkeley. A detailed validation of the nominalist theory of money was given by the German professor Knapp, who considered all the phenomena of economic life to be legal. He denied the existence of economic law purposes. Economic laws, in his view, are arbitrarily established by the will of the people. All economic categories, including money, are considered by Knapp as a product of law, a product of state activity. This is why Knapp called his money theory the state money theory.

The main misconception of nominalists is the denial of the connection between money and goods.

For nominalists, money has only one type of function - a form of payment. Money is just account tokens. According to Knapp, money is like the number of a theater hanger. The only difference is in the presentation of the number we receive a coat, and when we show money, we receive goods in exchange for them. If more he draws an analogy with a theatrical figure, then it, like money, contains some legal meaning - the right to receive a certain object (coat or some other product).

It becomes clear that the nominalist theory of money is inherently idealistic. It replaces the laws of economic functioning of certain legal provisions and denies the relationship between money and socially productive relationships.

The amount of money theory. Now this is the most common in terms of its application in practice.

The amount of money theory reduces the essence of money in a single function - the functioning of a circulation medium. As a means of circulation, money, according to proponents of quantitative theory, cannot have intrinsic value. Their value is determined by their quantity.

The volume of theory received its validation and development in England at a time when commodity independence was the main requirement of industrial capital and, in general, the further development of the country’s economy.

Remaining representatives of this concept of money are: Montesquieu, Hume, Ricardo. The main points of these economists are as follows:

Commodity prices are determined not by the primary value inherent in goods, but by the ratio between the total quantity of goods and the total amount of gold and silver available worldwide (Montesquieu);

2. The prices of goods and the value of money are determined not so much by the absolute value of goods and money as their quantity in circulation. Hume proved his position in raising prices for goods that took place at that time. However, he established a causal relationship caused by rising gold masses and rising commodity prices. Meanwhile, the real reason for the price increase is the increase in labor productivity in the gold mining industry and the discovery of new gold deposits in America. (Hume);

3. the value of money is primarily, and the value of gold depends on its value, that the value of gold decreases due to an increase in the quantity of gold (Ricardo);

Thus, the essence of volume theory lies in the expression that the value of money, be it gold or paper money, depends only on the amount of money.

The place of Keynes' views on this theory seems interesting. Keynes and his followers follow the same quantity and nominalist concept of money. Keynes believes that the direct correlation between money and the mass of goods is only a sign of balance. In practice, this thesis leads to the assertion that the conjuncure can be fully mastered. For this, a recipe is suggested: adjust the debt terms and there are no booms or crises. To maintain balance, it is necessary to manage not only the circulation of money, but also income in money. Also, in the interest interest, it is necessary to strictly limit wages.

What is the role of money in our lives? What prevents most people from living the life they dream of? Money Money is not accidentally present in our lives. They allow you to have a higher level of freedom of choice, and likewise - this is a certain symbol of prosperity, which we judge.

However, the importance of money should not be overestimated. When is money really important? When they are not enough. For those with financial difficulties, all thoughts are covered by money. This problem has to be dealt with thoroughly one day to properly handle the money. Money should be a servant, not a master, in our lives.

The role of money is interesting - to provide for our current needs. Money provides comfort. They are equivalent to our usefulness in society.

Psychologists identify three types of people:

1. those who want and earn money;

2. those who reject the need for money, because they do not know how to earn it;

3. and, finally, those who suffered from lack of money, believing it was not the most important thing in life.

It is hard to deny the fact that each of us needs money. Nonsense to argue here. No money, no life. Money provides food, clothing, shelter, warmth, light, pleasure, travel, recreation, power and confidence in the future. What value can you put next? Almost nothing.

The main thing that money gives is freedom (freedom of choice, freedom of movement). If you want, you can work where you want, and not where you SHOULD be (because of money). And if you don't want to, you don't have to work somehow. Money does not matter when it is! And this is for everyone ... Money, in our time, is needed as air.

Having money is a sign of a person's success. Material security, having housing is very important when choosing a life partner, when creating a family. While we girls hate to admit it, money matters in relationships. After all, if a person has no money, he is not confident, begins to have complexities, therefore jealousy and then the relationship becomes a dispute. Lack of money in the family provides misunderstanding, conflict, unity is disturbed. And living in a hut is also unpleasant. And not everyone will agree. I think girls are looking for potential husbands for themselves mainly according to security standards,

A poor person will be destroyed, "robbed", destroyed others to achieve prosperity, to get rich. And a man who has everything, he does not need anything, does not know the need for money, he will create, will strive for beauty, because he does not know the troubles and does not know that money can be bad. Money is valued by those who are not here. I believe that only when all people live in prosperity, fully satisfied with their needs, will the world be "kind" and "beautiful".

How much money does it take to be happy?

There is so much not to worry about lack of money and not wonder about arranging free money - to live on money balance.

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2 years ago


Just a suggestion: Work on your formatting styles. This would have been a great article if you only put some extra effort into your layout and visuals. Setting those aside, you did a great job with your topic.

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Thanks to your suggestion. In my next article i will do my best to put a layout. Thank you.

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