A History on the Concept of Money

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Money in its primary stage was a physically measurable and usually valuable item, such as gold or cloth. In the middle Ages, the adoption of the Aristotelian doctrine that it is “unnatural for money to engender money; the condemnation of interest as theft, because the capital repaid equals the borrowed capital” (Simmel 2004, page 168) . At the opposite pole from the mentality of the Middle Ages is the credit economy, in which the bill of exchange serves as money. In the modern conception of money based upon metal, the vital point is the working of the substance; and finally, in a credit economy there is a tendency to eliminate substance entirely, and to regard the effects as the only important matter.

Nevertheless, it has since departed from “the concrete form and moved into an ideal form, which is made of a worthless substance” (Simmel 2004; 172). There is no need to differentiate in developed growing economies between everyday barters and once-in-a-while monetary transactions. All exchanges have come to be in money. And, Simmel show, that money has acquired the value it possesses as a means of exchange; if there is “nothing to exchange, money has no value” (Simmel 2004, 154) . Obviously, its significance as a means of storing and transporting values is not of the same importance, but is a derivative of the function of money as means of exchange; without the latter, the other functions could not be exercised, whereas its function as means of exchange is independent of them. “Money has no value either for a person to whom the goods that it can buy are valueless, or for a person who does not need money to acquire them” (Simmel 2004, 155). In short, money is the expression and the agent of the relationship that makes the satisfac...

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...ample of someone drinking the remainder of a medicine not because it will cure an already cured disease, but because money has been spent on it and it should not be wasted.

And finally, money’s greatest characteristic tends to be in quantity. How much of it can be earned, can be stored, can be used. Even though money has a meaningful use – transaction – often people tend toward other ends to the scale, greed from one side, and extravagance from the other one. When one tends toward greed they only keep the money, not the items it should buy. When we have someone that enjoys the extravagance most, they enjoy the consume or spent the majority of the money, neither a commodity or a tool. Simmel also pointed out that in rural societies it is easier to be generous, as it’s more difficult to produce. Nowadays, man lives with everything in terms of its money value.
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