Basicconcepts
Thespecificmanifestationsofthenatureofmoneyaregraduallybeingcompletedwiththedevelopmentofthecommodityeconomy.Commodityexchangeisgraduallytransformedfrombarterexchangetocommoditycirculation(thatis,commodityexchangeusingcurrencyasamedium).Thisisaprerequisitefortheexistenceofthebasicfunctionsofmoney.Inadevelopedcommodityeconomy,ithasfivefunctions:scaleofvalue,meansofcirculation,meansofstorage,meansofpaymentandworldcurrency.Amongthem,themostbasicfunctionsarevaluemeasuresandmeansofcirculation.
Valuescale
Functions
ValuescaleisusedtomeasureandexpressthevalueofgoodsAfunctionisthemostbasicandimportantfunctionofcurrency.Justastherulerformeasuringlengthhasitsownlength,andtheweightthatweighsthingshasitsownweight,thecurrencyformeasuringthevalueofacommodityisitselfacommodityandhasvalue;thingsthathavenovaluecannotserveasameasureofvalue.Exceptforelectronicmoney.
Expressionofcommodityvalue
CurrencyasthevaluescalemeansthatthevalueofvariouscommoditiesisexpressedasacertainamountofmoneytoexpressvariousThevalueofcommoditiesisthesameintermsofquality,andcanbecomparedintermsofquantity.Thevalueofvariouscommoditiescanbecomparedwitheachothernotbecauseofcurrency,onthecontrary,justbecausethevalueofvariouscommoditiesisthecondensationofhumanlabor,theyhavethesamequalityandcanbecomparedinquantity.Aftercurrencyisproduced,thevalueofallcommoditiesisrepresentedbycurrency,andthevalueofcommoditiesisrepresentedbytheamountofcurrency.Thevalueofacommodityisdeterminedbytheamountofsociallynecessarylabormaterializedinthecommodity.Butthevalueofacommodityisinvisibleandintangible.Itcannotexpressitselfdirectly.Itmustbeexpressedthroughanothercommodity.Intheprocessofcommodityexchange,currencybecomesageneralequivalent,whichcanexpressthevalueofanycommodityandmeasurethevalueofallcommodities.Currencyisusedasavaluescaletomeasurethevalueofothercommodities.Thevalueofvariouscommoditiesisexpressedinacertainamountofcurrency,andcurrencyactsastheexternalvaluescaleofcommodities.Thereasonwhymoneycanperformthefunctionofavaluescaleisthatmoneyitselfisalsoacommodityandthecondensationofhumanlabor.Itcanbeseenthatmoney,asameasureofvalue,isamanifestationoftheintrinsicvalueofcommodities,thatis,labortime.
Whencurrencyperformsthefunctionofvaluemeasurement,itdoesnotneedtohaveactualcurrency,onlyconceptualcurrency.Forexample,ifabicycleisworth1gramofgold,youjustneedtoputalabelonit.Whenpeoplearemakingsuchvaluations,theyonlyneedtohavetheconceptofgoldintheirminds.Althoughthecurrencyusedtomeasurethevalueofcommoditiesisonlyconceptualcurrency,thisconceptualcurrencymuststillbebasedonactualmetals.Peoplecannotpricecommoditiesarbitrarily,becausethereisanobjectiveratiobetweenthevalueofgoldandothercommodities,andtheactualbasisofthisratioistheamountofsociallynecessarylaborconsumedtoproduceboth.Undertheconditionsofacertainamountofcommodityvalueandacertainrelationshipbetweensupplyanddemand,thevalueofthecommoditydependsonthevalueofgold.
Thevalueofacommodityisexpressedinacertainamountofcurrency,whichisthepriceofthecommodity.Valueisthebasisofprice,andpriceisthecurrencyexpressionofvalue.Thefunctionofcurrencyasameasureofvalueistoexpressitasavarietyofpricesaccordingtothevalueofvariouscommodities.Forexample,1cowisworth2taelsofgold,where2taelsofgoldisthepriceof1cow.
DuplicateStandardandSingleGoldStandard
Inhistory,somecountriesonceimplementedagoldandsilverduplicatestandard,withgoldandsilverPreciousmetalsalsoserveasameasureofvalue.Inthisway,allcommoditieswillhavetwodifferentcurrencyperformancesandtwoprices.Usinggoldasameasureofvaluetoexpressthepriceofacommodityisthepriceofcommoditygold.Whenthevalueofthecommodityremainsunchanged,thepriceofthecommoditywillchangeintheoppositedirectiontothevalueofgolditself,thatis,oncethevalueofgolddecreases,thepriceofthecommoditywillincreaseaccordingly;whenthevalueofgoldincreases,thepriceofthecommoditywilldecreaseaccordingly.Usingsilverasameasureofvaluetoexpressthepriceofacommodityisthepriceofcommoditysilver.Whenthevalueofthecommodityremainsunchanged,thepriceofthecommoditywillalsochangeintheoppositedirectiontothevalueofsilveritself,thatis,oncethevalueofsilverdecreases,thepriceofthecommoditywillincreaseaccordingly;whenthevalueofsilverincreases,thepriceofthecommoditywilldecreaseaccordingly.However,thereisnoguaranteethattheratioofthevalueofgoldtosilverwillremainthesame.Therefore,thereisnoguaranteethatthetwopricescancoexistsafely.
Anychangeintheratioofthetwovaluesofgoldandsilverwillcausepriceconfusionanddisturbtheratiobetweenthepriceofgoldandthepriceofsilver.Practicehasshownthatthedualizationofthevaluescaleisincontradictionwiththefunctionofthevaluescale.Inthedomesticcirculationfield,onlyonecommoditycanserveasameasureofvalue.Therefore,inthehistoryofcapitalistmoney,thedoublestandardhasfinallybeenreplacedbythesinglegoldstandard.
MeansofCirculation
Currencyfunctionsasamediumofexchangeforcommodities.Intheprocessofcommodityexchange,commoditysellersconvertcommoditiesintocurrency,andthenusecurrencytopurchasecommodities.Here,currencyplaystheroleofamediumofexchangeandperformsthefunctionsofameansofcirculation.Thefunctionofcurrencyasameasureofvalueisthepremiseofitsfunctionasameansofcirculation,andthefunctionofcurrencyasameansofcirculationisafurtherdevelopmentofthefunctionofvaluemeasure.
Transformationofbarterexchangeintocommoditycirculation
Beforetheadventofcurrency,commodityexchangewasadirectbarterexchange.Aftertheemergenceofcurrency,itplayedamediatingroleintheexchangeofcommodities.Theexchangeofcommoditieswithcurrencyasthemediumisthecirculationofcommodities,whichconsistsoftwoprocesses:commodity-to-money(W-G)andmoney-to-commodity(G-W).W-Gisthestageofselling,whichisthefirstformofcommoditychange.Thisstageisveryimportantanddifficulttoachieve.Becauseifthecommoditycannotbesoldandtheoriginalcommodityformcannotbeconvertedintoacurrencyform,theusevalueandvalueofthecommoditycannotberealized,andthecommodityownermaygobankrupt.G-Wisthestageofbuying,whichisthesecondformofchangeincommodities.Sincecurrencyisthegeneralequivalentofallcommodities,ifcommoditiesaresufficient,commoditiescanbeboughtwithmoney.Thisstageisrelativelyeasytoachieve.Sincecurrencyfunctionsasameansofexchangeasamediumofexchangeincommoditycirculation,itbreaksdirectbarterexchangeandlocalrestrictions,expandsthevariety,quantityandgeographicscopeofcommodityexchange,therebypromotingthedevelopmentofcommodityexchangeandcommodityproduction.
CurrencyCirculation
Currency,asameansofcirculation,iscontinuouslyusedasameansofpurchaseintheprocessofcommoditycirculationtorealizethepriceofcommodities.Afteracertaincirculationprocess,commoditiesmustleavethecirculationfieldandfinallyentertheconsumptionfield.However,asameansofcirculation,moneyhasalwaysremainedinthecirculationfield,constantlybeingtransferredfrombuyerstosellers.Thisconstantchangeofhandsformscurrencycirculation.Currencycirculationisbasedonthecirculationofcommodities,anditisamanifestationofthecirculationofcommodities.Asameansofcirculation,moneyneedstohaveacertainamountcorrespondingtothequantityofcommodities.Inacertainperiodoftime,theamountofmoneyrequiredforcommoditycirculationisdeterminedbyboththetotalpriceofcommoditiesforsaleandtheaveragespeedofmoneycirculation(seethelawofmoneycirculation).
Theamountofcurrencyneededforcommoditycirculationisdirectlyproportionaltothetotalcommodityprice:thelargerthetotalcommodityprice,themorecurrencyneededincirculation;thesmallerthetotalcommodityprice,thelesscurrencyneededincirculation.Theamountofmoneyneededincirculationisinverselyproportionaltothespeedofmoneycirculation:fastermoneycirculationmeanslessmoneyneededincirculation;slowmoneycirculationmeansmoremoneyneededincirculation.Inacertainperiodoftime,theamountofcurrencyrequiredforcommoditycirculationisequaltothetotalpriceofallcommoditiesdividedbytheaveragespeedofcurrencycirculationofthesameunit,whichcanbeexpressedbythefollowingformula:
Theamountofcurrencyneededforcommoditycirculation=commodity’sTotalprice/speedofcirculationperunitofcurrency
Currencyasameansofcirculation
Currencyusedasameansofcirculation,originallyinblocksofgoldorsilverTheshapeappears.Sincethecolorandweightofthemetalbarsaredifferent,itisinconvenienttocheckthecolorandweightheweighteverytimeyoubuyandsell.Withthedevelopmentofcommodityexchange,metalbarsarereplacedbycoinswithacertaincolor,weightandshape.Theemergenceofcoinageenablescurrencytobetterperformitsfunctionsasameansofcirculation.Coinsareconstantlybeingwornoutincirculation,andthenameofthecurrencygraduallyseparatesfromitsactualweightandbecomesamintofinsufficientvalue.Asameasureofvalue,currencycanbeconceptualcurrency,butitmustbefull-value;currency,asameansofcirculation,mustberealcurrency,butitcanbeinsufficient.Thisisbecausecurrencyfunctionsasameansofcirculation.Itisonlyafleetingmedium.Mintcoinsthatarenotworthwhile,orevencurrencysymbolsthathavenovalueatall,canalsobeusedtoreplacemetalcurrencyincirculation.
Usebasemetal,suchascoppercoin,isamintcoinofinadequatevalue.Papercurrencyissuedbythestateandforcedtocirculateispurelyasymbolofvalue.Papermoneyhasnovalue,butinsteadofmetalmoneytoperformthefunctionsofcirculationmeans.Nomatterhowmanybanknotesareissued,itcanonlyrepresenttheamountofmetalcurrencyneededincommoditycirculation.Iftheissuanceofbanknotesexceedstheamountofmetalcurrencyrequiredincommoditycirculation,thentheamountofgoldrepresentedbyeachunitofbanknoteswilldecrease,andcommoditypriceswillriseaccordingly.
Becauseofthefunctionofcurrencyasameansofcirculation,thebuyingandsellingofcommoditiesbreaksthetimelimit.Afteracommodityownersellscommodities,hemaynotbuyimmediately;italsobreaksthebuyingandsellingspace.Theaboverestriction,afteracommodityownersellsthecommodity,hecanbuyothercommoditiesonthespot,orbuyanyothercommoditieselsewhere.Inthisway,theremaybeadisconnectbetweenbuyingandselling.Somecommodityownersonlysellbutnotbuy,andthecommoditiesofothercommodityownerscannotbesold.Therefore,currencyasameansofcirculationhasgivenbirthtothepossibilityofcausingeconomiccrises.
Meansofstorage
Currencyexitsthecirculationfieldasanindependentformofvalueandageneralrepresentativeofsocialwealthandafunctionofstorage.Moneycanperformthefunctionsofstoragemeansbecauseitisageneralequivalentandcanbeusedtopurchaseallcommodities,somoneystorageisnecessary.
Thedevelopmentofcurrencystorage
Currency,asameansofstorage,isconstantlydevelopingwiththedevelopmentofcommodityproductionandcommoditycirculation.Intheearlydaysofcommoditycirculation,somepeopleexchangesurplusproductsforcurrencyandsaveit.Thestorageofgoldandsilverisregardedasanexpressionofwealth.Thisisasimpleformofmoneystorage.Withthecontinuousprogressofcommodityproduction,commodityproducershavetoconstantlybuyproductionmaterialsandmeansofsubsistence,butittakestimeforhimtoproduceandsellhisowncommodities,andheisnotsurewhetherhecansellthem.Inthisway,inordertobeabletobuycontinuously,hemuststoreupthemoneyfromtheprevioussaleofcommodities,whichisthemoneystorageofcommodityproducers.Withtheexpansionofcommoditycirculation,thepowerofcurrencyhasincreaseddaybyday,everythingcanbeboughtandsoldwithcurrency,andcurrencyexchangehasexpandedtoallareas.Whoeverownsmorecurrencyhasgreaterpower,andthedesiretostorecurrencybecomesstronger.Thisisacurrencystoreofsocialpower.
Currencyperformsthefunctionofvaluemeasurement
Itcanbeconceptualcurrency,andcurrencyasameansofcirculationcanbereplacedbycurrencysymbols.Butthecurrencyusedasameansofstoragemustbebothrealcurrencyandmetalcurrencyofsufficientvalue.Therefore,onlygoldandsilvercoinsorbullionbarscanbeusedasstoragemeans.Intermsofquality,currency,asageneralrepresentativeofmaterialwealth,canbedirectlytransformedintoanycommodity,soitisinfinite;butintermsofquantity,eachspecificamountofcurrencyislimitedandonlyservesasalimitedmeansofpurchase.Thecontradictionbetweenthequantitativefinitenessandthequalitativeinfinityofmoneyforcesmoneyhoarderstogreedilyaccumulatemoney.Thegreedofmoneyhoardersisendless.Theremayevenbesuchasituation:"Themoneyhoardersacrificeshisownphysicalenjoymentforthegoldenidol"(TheCompleteWorksofMarxandEngels,Vol.23,p.153).Currencystorageisgenerallydirectlyintheformofgoldandsilverbars,butotherstorageformscanalsobeadopted,suchasstoringgoldandsilverintojewelryandotherornaments.
Theroleofcurrencystorage
Currency,asameansofstorage,canspontaneouslyregulatecurrencycirculationandactasareservoir.Whenthecirculationofcommoditiesinthemarketshrinksandthereistoomuchcurrencyincirculation,partofthecurrencywillexitthecirculationandbestored;whenthecirculationofcommoditiesinthemarketexpandsandthedemandformoneyincreases,someofthecurrencyinthestoragestatewillbestoredagain.Re-entercirculation.
Therearedifferentopinionsonwhetherbanknotescanbeusedasameansofstorage.Thetraditionalviewisthatonlyareal,full-valuemetalcurrencycanpeoplebewillingtopreserveitandserveasameansofstorage.However,somepeoplebelievethatifthenumberofbanknotesissueddoesnotexceedtheamountofmetalcurrencyrequiredincommoditycirculation,banknotescanrepresentthecorrespondingamountofmetalandmaintainastablesocialpurchasingpower.Undertheseconditions,banknotescanalsoperformthefunctionsofstoragemeans.Ofcourse,ifpapercurrencyisissuedtoomuch,itwillnotbeabletomaintainitsoriginalpurchasingpower,andpeopleareunwillingtopreserveit.Itcanbeseenthatevenifbanknotescanperformthefunctionsofstoragemeans,itisconditionalandunstable.
Meansofpayment
Thefunctionsperformedbycurrencyasanindependentformofvalueduringunilateralmovements(suchaspayingoffdebts,payingtaxes,payingwagesandrents,etc.).
Generationandcharacteristics
Thefunctionofcurrencyasameansofpaymentisproducedtomeettheneedsofcommodityproductionandcommodityexchangedevelopment.Becausecommoditytransactionswereinitiallypaidincash.However,becausetheproductiontimeofvariouscommoditiesisdifferent,somearelonger,someareshorter,andsomeareseasonal.Atthesametime,thesalestimeofvariouscommoditiesisalsodifferent.Somecommoditiesaresoldlocallyandthesalestimeisshort,andsomecommoditiesneedtobeshippedandsoldoutofthecountryandthesalestimeislong.Thedifferenceinthetimeofproductionandsalescausessomecommodityproducerstopurchasesomecommoditiesoncreditfromothercommodityproducersbeforetheirowncommoditiesareproducedorsold.Thetransferofcommoditiesandtherealizationofpricesareseparatedintime,thatis,thephenomenonofbuyingoncreditappears.Afterthecreditpurchase,whenthedebtispaidoffontheagreeddate,thecurrencywillperformthefunctionofthemeansofpayment.Asameansofpayment,moneywasinitiallycausedbythecreditpurchaseandadvancepaymentofcommodities,andthenslowlyexpandedbeyondthefieldofcommoditycirculation.Inthecapitalistsocietywherecommodityexchangeandcreditbusinessaredeveloped,ithasincreasinglybecomeacommonmodeoftransaction.
Undertheconditionthatcurrencyisusedasameansofpayment,therelationshipbetweenbuyersandsellersisnolongerasimplerelationshipofbuyingandselling,butarelationshipofcreditor'srightsanddebts.Equivalentcommoditiesandcurrenciesnolongerappearatthesametimeatthetwopolesofthesalesprocess.Atthistime,moneyisfirstusedasameasureofvaluetomeasurethepriceofgoodssold.Second,currencyisusedasaconceptualmeansofpurchase.Whencommoditiesaretransferredfromsellerstobuyers,nocurrencyistransferredfrombuyerstosellersatthesametime.Whenmoneyfunctionsasameansofpayment,thepurposeofconvertingcommoditiesintomoneychanges.Generally,commodityownerssellcommoditiestoexchangecommoditiesintomoneyandthenexchangemoneybacktothecommoditiestheyneed;moneyhoardersTurningcommoditiesintomoneyistopreservevalue;debtorsturncommoditiesintomoneytorepaydebts.Whenmoneyisusedasameansofpayment,theprocessofchangesintheformofcommoditieshasalsochanged.Fromtheperspectiveoftheseller,thecommoditychangeditsposition,buthedidnotobtainthecurrency,whichdelayedhisfirstformofchange.Fromthebuyer'spointofview,thesecondformofchangeiscompletedbeforetheirproductsareconvertedintocurrency.Whenmoneyperformsthefunctionofameansofcirculation,sellingone’sowngoodsprecedesbuyingothers’goods.Whenmoneyperformsthefunctionofameansofpayment,buyingotherpeople'sgoodsprecedessellingone'sowngoods.Currencyasameansofcirculationisafleetingmediumincommodityexchange,whilecurrencyasameansofpaymentisthefinalresultoftheexchangeprocess.Thevaluescaleofcurrencyexecutionisconceptualcurrency,andthecirculationmethodofcurrencyexecutioncanbeinadequatecurrencyorvaluesymbol,butthecurrencyusedasameansofpaymentmustberealcurrency.
Function
Currencyasameansofpayment,ontheonehand,canreducetheamountofcurrencyneededincirculation,savealotofcash,andpromotethedevelopmentofcommoditycirculation.Afterthecurrencyperformsthefunctionsofthemeansofpayment,theamountofmoneyneededincommoditycirculationcanbeexpressedasfollows:
Totalcommodityprice/averagenumberofcirculationsofthesameunitofcurrency=amountofmoneyneededincommoditycirculation
Ontheotherhand,currencyasameansofpaymentfurtherexpandsthecontradictionsofthecommodityeconomy.Inthecaseofbuyingoncreditandsellingoncredit,manycommodityproducershavehadadebt-to-debtrelationship.Ifoneofthemfailstopaywhentheyaredue,itwillcauseaseriesofchainreactions,whichwillcausethewholebodytobeaffected.Thecreditrelationshipisdestroyed.Forexample,ifacertainpersondoesnotsellhisgoodswithinthespecifiedtimelimit,hewillnotbeabletorepayhisdebtsontime.Theinterruptionofacertainlinkinthepaymentchainmaycauseacurrencycreditcrisis.Itcanbeseenthataftercurrencyisusedasameansofpayment,thepossibilityofeconomiccrisishasfurtherdeveloped.
Fromthefunctionofcurrencyasameansofpayment,creditcurrency,suchasbanknotes,promissorynotes,moneyorders,checks,etc.,areproduced.Withthedevelopmentofcapitalism,themorethecreditbusinessunfolds,thegreaterthefunctionofmoneyasameansofpayment,sothatcreditmoneyoccupiesthefieldoflarge-scaletransactions,whilethemintingisdrivenintothefieldofsmall-valuetrading.
Afterthedevelopmentofcommodityproductionandcurrencyeconomytoacertainextent,notonlythecommoditycirculationfield,butalsothenon-commoditycirculationfieldalsousescurrencyasameansofpayment,actingasanindependentformofexchangevalue.Forexample,landrent,taxes,wages,etc.arealsopaidincurrency.
Becausemoneyactsasameansofpayment,inordertorepaydebtsatmaturity,moneymustbeaccumulated.Therefore,withthedevelopmentofcapitalism,thestorageofmoneyasanindependentformofenrichmenthasdecreasedordisappeared,whilethestorageofmoneyasameansofpaymentintheformofreserveshasincreased.
WorldCurrency
Currencyperformsthefunctionofgeneralequivalentintheworldmarket.Duetotheoccurrenceanddevelopmentofinternationaltrade,currencycirculationexceedsthescopeofacountryandplaysaroleintheworldmarket,socurrencyhasthefunctionofworldcurrency.Asaworldcurrency,itmustbegoldandsilverinfullvalue,andmusttakeofftheregionalcoatofcoinageandappearintheshapeofgoldandsilvernuggets.Coinsandbanknotesthatusedtofunctioninvariouscountrieshavelosttheiruseintheworldmarket.
Indomesticcirculation,generallyonlyonecurrencycommoditycanbeusedasameasureofvalue.Internationally,becausesomecountriesusegoldasameasureofvalue,andsomecountriesusesilverasameasureofvalue,goldandsilvercansimultaneouslyserveasameasureofvalueintheworldmarket.Later,intheworldmarket,goldachievedadominantposition,andgoldperformedthefunctionofvaluemeasurement.
Inadditiontothefunctionsofthevaluescale,theworldcurrencyhasthefollowingfunctions:①Asageneralmeansofpurchase,onecountrydirectlypurchasesgoodsfromanothercountrywithgoldandsilver.②Asageneralmeansofpayment,itisusedtobalancethebalanceofinternationaltrade,suchasrepayinginternationaldebts,payinginterestandothernon-productivepayments.③Actingasameansofwealthtransferbetweennations.Currency,asarepresentativeofsocialwealth,canbetransferredfromonecountrytoanother,forexample,topaywarreparations,exportcurrencycapital,ortransfergoldandsilvertoforeigncountriesforotherreasons.Incontemporarytimes,themainfunctionofworldcurrencyistoserveasaninternationalpaymentmethodtobalancethebalanceofinternationalpayments.
Theflowofgoldandsilverasaworldcurrencyistwofold:ontheonehand,goldandsilverarescatteredfromitsplaceoforigintotheworldmarket,absorbedbythecirculationofvariouscountries,andcompensatedforworn-outgoldandsilvercoins.,Usedasmaterialsfordecorationsandluxurygoods,andsolidifiedintostoragecurrency.Thisflowembodiesthedirectexchangeoflaborproductsbetweencommodityproducingcountriesandgoldandsilverproducingcountries.Ontheotherhand,goldandsilvercontinuetoflowbetweencountriesinresponsetochangesininternationaltradeandforeignexchangemarketconditions.
Inordertoadapttothecirculationoftheworldmarket,eachcountrymuststoreacertainamountofgoldandsilverasreserves.Thisworldcurrencyreserveincreasesordecreaseswiththeexpansionorcontractionofcommoditycirculationintheworldmarket.Incapitalistcountries,thegoldreservesinbanksareoftenlimitedtotheminimumnecessaryfortheirspecialfunctions.Excessivemoneystorageisarestrictiononcapital,andtoacertainextentitalsomeansthestagnationofcommoditycirculation.