Money is the universal equivalent of services and goods in value. There are several types of them: cash and non-cash, defective and high-grade money. By the way, the most common interpretation of the name speaks of the Turkic origin of this word, where the coins were called tenge.
History of commodity relations
Before full-fledged money appeared, people used barter, that is, a direct exchange of goods. When the subsistence economy began to develop into production, there was a need for a certain commodity equivalent, which for a long time was served by a wide variety of things - furs, cattle, pearls, etc., depending on the region. Then silver and gold became money - first in bullion, then coins.
It was so convenient that the rest of the goods were rather quickly forced out and ceased to circulate as money. It was convenient to store full-fledged money from expensive metals due to its small volume and weight, they could not be spoiled during unforeseen force majeure, such as skinsanimals. And they were expensive, which is extremely convenient for the exchange.
Process started
Now the exchange of goods is divided into two equal parts: first you need to sell yours, get full money, then buy the right one, already in any other place and after any time. The functions of money become an independent process. Producers of goods can store them in anticipation of a better investment. This is how monetary relations arose and began to develop, in which it became possible to accumulate for purchases, loans and repayment of debts.
As a result of this process, money and goods began to have independent movement, but this was not the end. Banknotes acquired much more significant functions and even greater independence when they received the abolition of their fixed content in gold, as full-fledged money.
Everyone has examples of this. Paper and metal (not gold and not silver) money, stocks, bonds, etc., is something that does not have its own value. Thus, banknotes were issued in accordance with the turnover and regardless of the gold backing.
Views
There are extremely many varieties of money, with a lot of subspecies and diverse forms that unite them. There are differences in the type of monetary material, and in the method of circulation, and in use, and in accounting for the money supply, and in the possibilities of transferring from one type of money to another. History has identified four main types:
- credit;
- fiat;
- secured;
- commodity.
The last two types have been preserved in functioning as full-fledged money. Examples in the name itself: this is real money, real, material, natural - commodity and secured.
This includes all equivalents, that is, products that have independent utility and value (grain, livestock, etc.), as well as metal money - copper, bronze, silver, gold - something that has its own fullness. The secured ones can be exchanged for a certain amount of the desired product or coins, that is, they are initially representatives of commodity money. The reasons for the transition from full-fledged money to inferior ones are due to the constant development of commodity-money relations.
Defective money
Fake, decreed, paper, symbolic money is called defective, because they themselves are worth nothing and are not commensurate with the face value. They have only certain functions: the state can accept them in any capacity as payments on its territory, including taxes. These are banknotes and the money that is in banks - non-cash, as well as credit money as debts formalized in a certain way - securities. This is the comparative characteristic of full and inferior money.
Full-fledged have their own value, forming a purchasing power that is adequate to their internalvalue (commodity and metallic money), while defective ones have no intrinsic value. This is a charter or monetary surrogate, but which can also be secured or not.
Shape
Security with currency metals or goods gives a representative value, that is, a measure of purchasing power, when defective ones can be exchanged for full-fledged money. At the same time, unsecured ones cannot be exchanged for gold or other currency metals, but they are money if there is their universal recognition and trust in them by business executives.
Hartial types of money are state-supported inferior ones. There is a legislative basis and recognition for them. For example, paper. They first began to be used in China from the thirteenth century. And the use of full-fledged money in Russia lasted until the reign of Catherine the Great, who introduced banknotes in 1769.
Paper money
Paper money is unstable, almost always associated with inflation, their release is affected not only by the need for turnover, but also by unproductive costs. The nature of full-fledged money is much more attractive, although financial maneuvering is much more complicated with them. Depreciation really reduces the purchasing power in relation to services, goods, and then both retail and wholesale prices rise.
Regulation of the circulation of paper money is quite difficult. The difference between the costs of their production and the nominal value gives the state income in the form of emissions. However, the depreciation of money forces the redistribution of national income, moneyno longer trusted.
Cash and non-cash
Money in the hands of the population, servicing retail trade, various payments and settlements, is cash. These are paper signs and metal coins that are passed from hand to hand in their natural form. Non-cash - the bulk of the funds in bank accounts. They are called credit or non-cash deposit money.
Incarnation - the external expression of a particular type of money. That is, their form is differentiated according to the functions performed. It can be electronic money, non-cash money, checks, deposits, banknotes, bills of exchange, loans, as well as paper money and metal coins.
There are practically no full-fledged money in circulation, their advantages and disadvantages are not equal, since it is almost impossible to operate with them for all their stability. Nevertheless, it is they who provide all the defective money.
History of coins
Precious metals primarily belong to high-grade money. Of these, coins began to be minted in the seventh century BC in Asia Minor. These were round standard bars, where the minting pattern guaranteed an accurate value. Coins very soon became a universal medium of exchange in the Old World.
Gold and silver are valuable in themselves, so products made from them could be used in any country where metal money was used. Nevertheless, each state considered it its duty to have its own mint, thus emphasizing itssovereignty. It was real money, since the nominal value of the coin absolutely corresponded to the real price of the metal that was used to make it.
Credit money
This form of money appeared much later, when commodity production had already been built, and the purchase and sale had the opportunity to be carried out on credit - with installment payment. The appearance of credit money is due to the fact that the main function of money has changed: being a means of payment, they began to act as an obligation to repay debts on time. Such relations of purchase and sale would not have been possible without the proper development of commodity-money relations. What is more convenient to use today if there is full and defective money? The comparison is clearly not in favor of the former.
Their main feature is that they are issued clearly with real turnover needs. A secured loan is issued (some kind of inventory, for example), then the loan is repaid with a constant decrease in balances. This is how the volumes of payment means provided to borrowers are linked to the actual need for cash flow.
Credit money has no value of its own, being nothing more than a symbol expressing the value of an equivalent commodity. The path of development of credit relations was as long as the transition from full-fledged money to defective ones: bills of exchange, accepted bills, banknotes, checks, credit cards and, finally, electronic money.
Promissory note
The first type of credit money was a bill,which appeared along with the form of trade, which provided for payment by installments. It arose in the form of a written unconditional obligation, by which the debtor promised to pay the entire amount at the agreed time and in a certain place.
There is a simple and transferable bill. The first is issued by the debtor, and the second is issued by the creditor and sent to the debtor so that he returns it with his signature. Later, treasury bills appeared, issued by the state to cover the budget deficit, as well as friendly bills that one person writes to another for accounting in a bank, and, in addition, bronze bills are used, they do not have a commodity coverage. If the bank agrees with the payment guarantee, an accepted bill is issued.
The characteristic features of the described type of papers are abstractness (the type of transaction is not indicated), indisputability (payment of the debt is obligatory, even if coercive measures are required after protesting the bill), negotiability (giro or endorsement, that is, there may be a transfer of a bill instead of a payment funds when offsetting is possible). It is also characteristic that the promissory note is served only by wholesale trade, where the balance is paid in cash, and that a limited number of persons are involved in the circulation of the promissory note.
Banknote
The central bank of the state issues credit money - banknotes. Previously, they had double security - a commercial and a gold guarantee. The first spoke about the provision of commercial bills associated with the turnover, and the second guaranteed the exchange of banknotes for gold. This is truecalled classic banknotes, highly stable and reliable.
A banknote differs from a promissory note in many respects. Firstly, by urgency, since a bill of exchange is a debt obligation with a certain period, but a banknote is not. Secondly, under a guarantee, since a bill of exchange is issued by an individual entrepreneur and is supported only by his individual guarantee, and banknotes are guaranteed by the Central Bank, that is, the state.
A classic banknote that can be exchanged for precious metal can be distinguished from paper money in four ways.
- Origin. Both banknotes and paper money originated from the function of money, but the latter are medium of exchange and the former are means of payment.
- Emission method. Paper money is printed by the Ministry of Finance, and banknotes by the Central Bank.
- Returnability. Paper money does not return to its manufacturer, unlike banknotes, which, upon the expiration of the bill they provide, are returned to the Central Bank.
- Change. The classic banknote is exchanged for silver or gold, but paper money is not.
But it should be noted that today banknotes are not exchanged for gold, and they are not provided with goods every time. They are issued only in a certain denomination and are state money.
Deposit
Deposits are records of numbers on a bank client's account. When a bill is presented for accounting, a record appears. The bank does not pay banknotes for the presented bill, instead it opens an account, from where it carries outpayment by debiting a certain amount.
Deposit money is convenient in that it allows you to accumulate money through interest, which is obtained by transferring money to a bank for temporary use. Deposits can serve as a measure of value, but not as a means of circulation. A deposit, like a bill, has a dual nature. It is both money capital and means of payment.
Check
Checks are issued by the account holder to a credit institution so that it pays the specified amount to the bearer of the check. There are many types of this payment document. Personal checks cannot be transferred to another person, warrant checks can.
Bearer ones require the payment of an amount purely to the bearer, settlement ones are used strictly for non-cash payments, and accepted ones contain the bank's consent to payment. The essence of a check is that it is a means of obtaining a certain amount of cash, circulation and payment in a non-cash way.
