Money function

In economics , the money function refers to the various forms of benefit that money can provide. In general, a distinction is made here between means of payment , store of value and value measurement functions. The better a good fulfills its money function, the more likely it is to be viewed as money.

Means of payment

The process of “paying” is synonymous with the valuation of goods and means of production on the one hand and the transfer of money ownership on the other . The concept of payment thus affects the most fundamental property of money, namely its mobility. Hence it can be said that the concept of money is synonymous with that of paying (money does not “exist” in that it “is”, but in that it is paid). Money (a currency) can be stored, but its constantly changing value cannot.

Money is a medium of exchange and debt repayment. A means of payment is understood to be a medium with which exchanges can be carried out. In general, two forms of exchange can be distinguished:

• Direct : good versus good (e.g. work versus bread; bread versus clothing and culture)
• Indirect : good for money, money for good (e.g. work for money, money for bread, clothing or culture, etc.)

In an economy without a generally accepted means of payment (e.g. money), for a successful transaction between two economic subjects there must be a double agreement of their exchange wishes.

Example: A farmer wants to sell grain and needs tools. At the same time, a craftsman wants to exchange his tools for meat. No trade can take place between these two, since the farmer's intention to sell does not match the artisan's wish to buy. Both of them will likely have to search a long time before they come across someone with appropriate transaction requirements. If money comes into play, this process is greatly simplified: the farmer can sell his grain to a third party and exchange the money received from the craftsman for tools. The craftsman can use the money received to buy meat from a fourth. All that is needed is a simple agreement of wishes and an agreement on the price .

Store of value

Money acts as a store of value, as long as there is no cost to it. The promise of equivalent value for other goods (goods or services) can be stored in money and redeemed at another time and place. To this end, a store of value must be able to retain its value over the long term. That is why non-perishable goods were almost always agreed as “money” (e.g. gold, diamonds).

In today's economy, however, money only fulfills a store of value function for individual economic operators, but not for the economy as a whole. Because today money is exclusively drawn kreditär and therefore always provides a demand / liability is that the creditor on the asset side of its balance sheet recorded as a receivable, the debtor on the liability side of its balance sheet as a liability (s. A. Credit theory ). Central bank money is a claim of a non-bank or commercial bank on the central bank and thus its liability, sight deposits at commercial banks are a claim on the commercial bank and thus its liability, as can be seen at all times from central bank balance sheets and commercial bank balance sheets. For example, every central bank note in the cash register of a non-bank or commercial bank that is booked there as assets on the assets side corresponds to an equally high liability (debt) in the central bank's balance sheet (liability item “banknotes in circulation”).

Since the credit of the creditor on the debtor side is matched by debts in the same amount, all credit and debts always add up to zero for reasons of balance mechanics (and therefore purely logical) regardless of the amount of credit / debts . In terms of the economy as a whole, there is therefore no net financial wealth in a credit money system, only tangible or real assets. Money therefore does not fulfill a store of value function in the economy as a whole , because its value is always zero in the economy as a whole : a closed economy as a whole can today, for purely logical reasons, never “save” in the sense of “accumulate net financial assets”. For the same reason, a closed economy, in which money is created exclusively through credit, can never be in debt or even over-indebted.

Value measuring or arithmetic unit

Money is a measure of value . It also serves as a benchmark for the amount of wage labor, goods and services that can be paid or acquired with it. The amount of money someone owns corresponds to the share of the national product that he can earn if he spends the money. The value of a monetary unit is called the purchasing power of money.

If money serves as a general measure of value, all prices in an economy are expressed in monetary units (MU). The efficiency advantage can be seen in the number of exchange ratios. In an economy with 1 million goods there are around 500 billion relative prices, which indicate the paired exchange relationships between the goods (e.g. 1 hour of work = 5 loaves of bread = 1 pair of trousers). With n  goods there are ½ · ( n ² -  n ) value ratios (relative prices). If money is used as a general measure of value, this is again reduced to n  exchange ratios (e.g. 1 hour of work = 5 GE = 5 loaves of bread), which makes the price comparison less tedious.

Social function

Niklas Luhmann presents money as the communication medium within the economic system. Within this system, communication can only be carried out using money. Other information has an effect on the economic system and the monetary communication that takes place within it only through the structural coupling of the economy with other systems, but is not directly communicated within the economy according to Luhmann's system definition.

See also

• Monetary history
• Cash

literature

• Karl Marx : Capital. First Volume, First Section: Commodities and Money and Second Section: The Transformation of Money into Capital . Dietz Verlag, Berlin 1972, pp. 49–191.
• Bernhard Felderer, Stefan Homburg : Macroeconomics and New Macroeconomics . 7th edition. Springer Verlag, 1999, ISBN 3-540-66128-X .

Web links

• Fritz Helmedag: Money functions. (PDF; 145 kB) WISU, 8–9 / 1995

Individual evidence

1. ^ Alfred Lansburgh (as Argentarius): Vom Gelde - letters from a bank director to his son. 1921, reprint from the publishing house of the Bokelberg collection, Hamburg 1982. P. 56 ff.
2. ↑ “The central bank money consists of claims on the central bank, the giro money maintained with the commercial banks consists of claims on the commercial banks. (...) Since the existence of a claim is always an expression of a credit relationship, we can also say that the means of payment in today's economy are a creature of credit. The character and essence of our current means of payment cannot therefore be understood without penetrating into the nature of the credit industry . ”Erich Schneider: Introduction to Economic Theory . III. Part: money, credit, national income and employment . Mohr Siebeck, Tübingen 1973, pp. 9/11
3. ^ Rolf-Dieter Grass, Wolfgang Stützel: Economics . Munich 1988, p. 10f .: The financial wealth in the world
4. ↑ Johannes Schmidt: Saving - Curse or Blessing? Notes on an old problem from the perspective of the balance mechanics. In: Lessons from the macroeconomic crisis . Marburg 2012, Series Normative and Institutional Basic Questions of Economics , Volume 11 ( wordpress.com ( Memento of the original from October 23, 2013 in the Internet Archive ; PDF; 125 kB) Info: The archive link was inserted automatically and has not yet been checked. Please check the original - and archive link according to the instructions and then remove this note. ) 
5. ^ Niklas Luhmann : Money as a communication medium . In: Die Wirtschaft der Gesellschaft , 1988, ISBN 3-518-28752-4 , Chapter 7, pp. 230-271