Money proves through the functions. Usually allocate such functions of money as:
Measure of value. The diverse goods are equated and exchange among themselves on the basis of the price (factor of an exchange, cost of these goods expressed in number of money). The goods price carries out the same measuring role, as in geometry length at pieces, in the physicist weight at bodies. For measurements it is not required to know thoroughly that such space or weight, is enough to be able to compare required size to the standard. The monetary unit is the standard for the goods.
Currency. Money is used as the intermediary in circulation the goods. For this function ease and speed from which money can exchange on any other goods (an indicator liquidity) are extremely important. At use of money the commodity producer has an opportunity, for example, to sell the goods today, and to buy raw materials only every other day, week, month and etc. Thus he can sell the goods in one place, and buy necessary to it absolutely in other. Thus, money as overcomes a currency временны́е and spatial restrictions at an exchange.
Instrument of payment. Money is used at registration of debts and their payments. This function receives independent value for situations of the astable prices for the goods. For example, the goods have been bought on credit. An amount of debt express in money, instead of in number of the bought goods. The subsequent changes of the price for the goods don't influence any more an amount of debt which needs to be paid money. Money carries out the given function also at monetary relations with financial bodies. The similar role on sense is played by money when in them express any economic indicators.
Accumulation means. The money which has been saved up, but not used, allows to transfer purchasing capacity from the present to the future. Function of means of accumulation is carried out by the money which temporarily isn't participating in a turn. However it is necessary to consider that purchasing capacity of money depends on inflation.
Other functions of money
Also sometimes allocate such functions of money:
Means of formation of treasures. If in the conditions of natural money for balance preservation, between monetary and commodity weights it was required to reduce quantity of active money, they started to be postponed in the form of treasures. Treasures differ from accumulation by that accumulation are the form of accumulation of means for a specific goal; at achievement of the necessary size or in due time they are spent. Treasures do without a specific goal. A principal cause of their formation — impossibility (or unwillingness) an effective utilization of all volume of cash. Treasures start to spend, when the requirement of economy for monetary weight will increase. In modern conditions of symbolical money the role of treasures in regulation of monetary weight is insignificant.
Function of world money. It is shown in mutual relations between economic subjects: the states, legal and the physical persons who are in the different countries. Before the XX-th century a role of world money precious metals (first of all played gold in the form of coins or ingots), sometimes, jewels. Today this role is carried out usually by some national currencies — US dollar, pound sterling, euro and yen though economic subjects can use other currencies in the international transactions. In some countries laws forbid to use for transactions in the country foreign currency, in others it isn't forbidden. The euro is an example associations of currency systems of some the countries which has allowed to solve a problem of interstate payments between these countries by transition to uniform currency.
History of money
It is supposed that before occurrence of money there was a barter — a direct impecunious exchange of the goods.
In various regions of the world used as money various things:
On islands of Ocenia as money cockleshells and pearls served,
In New Zealand as money stones with apertures in the middle were used,
In many countries as money the cattle, furs and skins of animals was used, these forms of money were most ancient and extended,
In Russia hydrochloric whetstones in addition could be used,
Later as money began to use whetstones, ingots, stumps from metals.
Gradually the role of money has passed to metals. At first it were metal subjects (tips of arrows and copies, nails, utensils), then ingots of the different form. Since VII century BC in circulation there are stamping coins. Before capitalism the role of money was carried out by copper, bronze, silver. Only in some countries (in Assyria and Egypt) for 2 millenia BC for money used gold. Fast distribution of coins is connected with convenience of their storage, crushing and connection, relative big cost at small weight and volume that is very convenient for an exchange. With development of commodity manufacture cost and quantity of daily trading operations has promptly increased. The increase in cost of an exchange equivalent Was required. Everywhere gold and silver became the monetary goods, as the goods with the big cost at small weight and volume.
The first paper money has appeared in China in 910 year of our era. The earliest in the world releases of banknotes have been carried out in Stockholm in 1661. The first paper money (bank notes) has been entered into Russia at Catherine II (1769). [4]
The debt nature of modern money
Historically the first banks were a place of storage of money and other values. About presence of money the certificate (receipt) which certified stored stood out that money is at the banker stored and the bearer of this paper will receive the certain sum. Now for payment of large purchase was to transfer the certificate, instead of a rouleau enough. In due course these certificates began to have the same force, as well as real money.
So there was the first paper money which has arisen from practice of use of bank certificates (receipts). The word "banknote" occurs from English words «bank note» that «bank record» means.
Economic essence of a banknote — the bank obligation to give out natural money. However now banks are not obliged to exchange a banknote for sound natural money. Banknote
Kinds of money
Now all modern monetary systems are based on фиатных (symbolical) money. But historically allocate four principal views of money: commodity, provided, фиатные and credit.
The basic properties of a monetary material
The material or the goods of which money is made, usually possesses a number of properties:
Qualitative uniformity (separate copies of the goods, a coin, a denomination shouldn't possess unique properties);
Divisibility and объединяемость (property of exchange, money shouldn't change essentially the properties if them to divide into small parts or to unite in one large part);
Keeping (money should be stored well, without changing the physical and-or chemical properties throughout long time);
Portability (the high cost concluded in small volume);
Recognition (it is possible easily and to define quickly that it for a subject);
Safety (security from plunder, fakes, changes of face value and etc.).
Commodity money
Japanese yen of 1890 with the image of a dragon. Silver
Commodity (material, natural, valid, present) money — money in which role the goods possessing in independent cost and utility act. They can be used not only as money: for example, the gold coin can be melted into jewelry. Such money are all kinds of the goods, which acted as equivalents at the initial stages of development of the commodity reference (cattle, grain, furs, pearls, cockleshells and etc.), and also metallic currency — copper, bronze, silver, gold, platinum sound coins.
Adam Smith told that during its time (XVIII-th century) in some Scottish settlements the custom has been extended between workers to pay to dealers instead of a small coin in iron nails which willingly were accepted and had quite certain cost. The same tells also Shevale about coal districts of France. In the end of a XIX-th century of Shvejnfurt has found at a bongo tribe (in Sudan) use as money of iron tips of copies and a shovel.
The different goods and carry out today a role of money in specific conditions. For example, cigarets at prisoners and prisoners of war, vodka [5] and sugar during the periods of economic crises, the weapon and ammunition in places of confrontations. In the conditions of hunger and inflation products of long storage can become means of accumulation for prosperous people.
But gradually commodity money leaves a turn. They are inconvenient for the frequent reference as are too heavy, indivisible or spoil at storage. But the most important thing — they the expensive in manufacturing. After all, cost of their manufacturing should correspond to their face value, differently natural money won't play a role of the ideal goods acting as an equivalent of cost of other goods. At the same time, with development of economy the requirement for money increases that does monetary system of the state the expensive. Cost of money in such economy is always comparable to the sizes of gross national product, that is too many resources go not on manufacture of the goods and services, and on manufacture of money that reduces the general industrial potential of the country.
Now commodity money is used as a store of value and for collections (an investment coin).
Credit money
Credit money is the rights of the requirement in the future concerning physical or legal bodies (in special way issued debt, usually in the form of a transferred security) which can be used for purchase of the goods (services) or payment of own debts. Credit money differs from the provided money that the payer (debtor) not necessarily should have all time property, sufficient for debt payment. Payment on such debts is usually made in certain term though there are variants when payment is made at any time under the first requirement. Credit money bears in themselves risk of default of the requirement.
Examples of credit money: the bill, the check, the bond, units of value electronic нефиатных payment systems (a version of ecash).
Monetary systems
The monetary system of the state is characterized:
The name and officially acceptThe monetaryed reductions (signs, symbols and abbreviations) monetary unit, its fractions (change monetary units), and also their parity (system of monetary notation);
Kinds of bank notes (metal, paper, проч.), their face values;
Monetary circulation structure, presence or absence of cash, подрядком realization of clearing settlements, in т. ч. With use of monetary substitutes and деривативов;
Order of release (issue) of bank notes, their recognitions lost solvency, and also withdrawals from the reference;
Use order in internal monetary circulation of foreign currencies, an exchange of national currency on foreign and establishments of rates of exchange;
The rights and duties (functions) of the issue center (as a rule, the central bank of the country);
Order of creation and functions of commercial banks;
The state obligation (or its issue center) on the free or limited exchange of bank notes on precious metals or absence of such obligation;
Tools and methods of a monetary and credit (monetary) policy;
In other essential parameters.
The basic characteristics of monetary system, as a rule, are fixed in the country legislation. In the Russian Federation key parameters of monetary system are set by following laws:
The constitution of the Russian Federation;
The law «About the Central bank of the Russian Federation (Bank of Russia)»;
The law «On currency regulation and currency control»;
The law «About banks and bank activity»;
The law «About counteraction to legalization (washing up) of the incomes received by a criminal way, and terrorism financing».
