The Purpose Served By Money
Money seems to divide the world into the have’s and have not’s. Given this disparity, one might wonder why whether it is worth it. Well, here is your answer!
In the beginning of the social interaction between human beings, the barter system worked quite well. The barter system is basically a trade arrangement and requires that two or more parties have a mutual desire to trade and have goods that the other one wants to acquire. In the small and primitive cultures of pre-history, this was often enough. The only commodities that anyone had any interest in were food, clothing, and weapons. If one man had a weapon, and the other had some food, a deal could be easily arranged.
The barter system could not last forever. It was because of the ability of the human mind to under stand symbols and to assign value to them that we were able to develop a means of moving past the barter system. Money became the means by which civilization and socialization took place. Now, when a person wished to do something beyond the production of the basics, such as a work of art, he did not have to wait for someone willing to trade the food he desired for his art. He could trade the art for money, and trade the money for the food. Money became the middle man that allowed diversification and growth.
Money had to accomplish three distinct missions in order to become a workable replacement for the barter economy. It had to be a medium of exchange. This means that people needed to recognize its value and be willing to except it in trade for goods or services. This acceptance and recognition had to be universal within the society. If your money was not accepted for the goods or services you desired, it was worthless.
Money also served as a unit of account. This means that it must have a set value that could be assigned to a product or a service to determine where it stood in the overall economic picture. If you made a piece of art, you needed to be able to set a money value on it, and that same money value needed to be accepted by a food merchant. In the barter system if one art piece was worth four cows, then the cows must have a value of one unit of money and the art piece must be worth four units.
You must also be able to store the money at value. This means that the money and its value had to be durable and relatively unchanging. This means that you did not have to go and buy four cows as soon as you sold your art piece. You could save your money, and accumulate it for use at another time. This was the beginning of the idea of wealth. Money has been called the root of all evil, but actually it is the root of all growth.
Winston Goldstein is with MoneyMakerstop.com - your source for advice and information on money.
In the beginning of the social interaction between human beings, the barter system worked quite well. The barter system is basically a trade arrangement and requires that two or more parties have a mutual desire to trade and have goods that the other one wants to acquire. In the small and primitive cultures of pre-history, this was often enough. The only commodities that anyone had any interest in were food, clothing, and weapons. If one man had a weapon, and the other had some food, a deal could be easily arranged.
The barter system could not last forever. It was because of the ability of the human mind to under stand symbols and to assign value to them that we were able to develop a means of moving past the barter system. Money became the means by which civilization and socialization took place. Now, when a person wished to do something beyond the production of the basics, such as a work of art, he did not have to wait for someone willing to trade the food he desired for his art. He could trade the art for money, and trade the money for the food. Money became the middle man that allowed diversification and growth.
Money had to accomplish three distinct missions in order to become a workable replacement for the barter economy. It had to be a medium of exchange. This means that people needed to recognize its value and be willing to except it in trade for goods or services. This acceptance and recognition had to be universal within the society. If your money was not accepted for the goods or services you desired, it was worthless.
Money also served as a unit of account. This means that it must have a set value that could be assigned to a product or a service to determine where it stood in the overall economic picture. If you made a piece of art, you needed to be able to set a money value on it, and that same money value needed to be accepted by a food merchant. In the barter system if one art piece was worth four cows, then the cows must have a value of one unit of money and the art piece must be worth four units.
You must also be able to store the money at value. This means that the money and its value had to be durable and relatively unchanging. This means that you did not have to go and buy four cows as soon as you sold your art piece. You could save your money, and accumulate it for use at another time. This was the beginning of the idea of wealth. Money has been called the root of all evil, but actually it is the root of all growth.
Winston Goldstein is with MoneyMakerstop.com - your source for advice and information on money.
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Source: http://www.articlealley.com/article_126530_63.html
foreclosure foreclosure homes foreclosure listings foreclosure properties foreclosure search buying foreclosure foreclosure loans foreclosure loan real estate real estate loan real estate loan rates real estate loan rate real estate loan calculator real estate interest rates real estate mortgage loan real estate loans real estate loan broker business bisniz investment loan student loan mortgage
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