Monetary function

Monetary function

Monetary function refers to the concrete embodiment of the essence of money. Under the condition of developed commodity economy, money has five functions: value scale, circulation means, storage means, payment means and world currency. These five functions of money are gradually formed with the development of commodity economy. Among them, value scale and circulation means are the most basic functions of money. Money is first used as a measure of value to measure whether and how much value a commodity has, and then as a means of circulation to realize the value of a commodity.

Value scale

Value scale is a function used to measure and express the value of commodities, and it is the most basic and important function of money. Just as the ruler for measuring length has its own length, and the weight for weighing things has its own weight, the money used to measure the value of goods is also a commodity with value; things without value cannot be used as a measure of value. Except for electronic money.

Circulation means

Money acts as the medium of commodity exchange. In the process of commodity exchange, the seller converts the commodity into money, and then uses the money to purchase the commodity. Here, money plays the role of exchange medium and performs the function of circulation means. The function of currency as a measure of value is the premise of its function as a means of circulation, and the function of currency's circulation means is the further development of the function of value measure.

The amount of money needed for commodity circulation = total price of commodity / circulation speed of unit currency

Storage means

Money withdraws from the circulation field as an independent form of value and the general representative of social wealth. Money can perform the function of storage means because it is a general equivalent and can be used to buy all goods, so it is necessary to store money.

Means of payment

The function of money as an independent form of value when it moves unilaterally (such as paying off debts, paying taxes, paying wages and rents, etc.).

As a means of payment, money can reduce the amount of money needed in circulation, save a lot of cash and promote the development of commodity circulation. After money performs the function of means of payment, the amount of money needed in commodity circulation can be expressed as follows:

Total commodity price / average circulation times of the same unit currency = the amount of money needed in the circulation of goods

The currency of the world

Money performs the function of general equivalent in the world market. Due to the occurrence and development of international trade, currency circulation is beyond the scope of a country and plays a role in the world market, so money has the function of world currency. As a world currency, it must be gold and silver of full value, and it must take off the regional coat of coinage and appear in the shape of gold and silver. Coinage and paper money, which used to play a role in various countries, have lost their function in the world market.

In domestic circulation, only one kind of monetary commodity can be used as the value scale. In the world, because some countries use gold as the value measure, some countries use silver as the value measure, so in the world market, gold and silver can serve as the function of value scale at the same time. Later, gold gained a dominant position in the world market, and the function of value scale was mainly performed by gold.