The most commonly used medium of exchange
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  • FreedomPedia
  • Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money.

    • Gold Standard - A monetary system in which currency values are defined in terms of gold

    Bibliography

    Money and Banking - Online Library of Liberty
    More than 40 titles, including works by Alexander Hamilton, Eugen von Böhm-Bawerk, Nassau William Senior, William Graham Sumner, Ludwig von Mises and Irving Fisher
    "As modern economics began to emerge in the late 18th century the role of money and banks in the economy was quickly identified as a vital sector. It was especially important to establish what was the proper role of government in the issuing of coins and the regulation of interest rates and other banking activities."

    Articles

    Austrian "Inflation," Austrian "Money," and Federal Reserve Policy, by Richard H. Timberlake Jr., The Freeman, Sep 2000
    Response to Joseph T. Salerno's October 1999 article which critiqued Timberlake's essays in the April, May and June 1999 issues; discusses the words "inflation" and "money" and Federal Reserve policies, in an Austrian economics context
    "The question of which items economists should include in the definition of money has been debated for two centuries. Obviously, any item that is directly exchangeable for goods and services over the counter as a medium of exchange is money. Currency and demand deposits, subject to check, are clearly money. However, what about time and savings deposits, savings and loan share capital, and cash surrender values of life insurance policies—the items Salerno (and Rothbard) include in the accounted money stock?"
    "Bad Money Drives Out Good", by Charles W. Adams, Future of Freedom, Dec 2003
    Explains Gresham's Law, recounting how Queen Elizabeth I restored pure silver coinage and how the Romans debased the Greek silver drachma
    "It was formulated by Sir Thomas Gresham to explain to Queen Elizabeth I what was happening to the English shilling. ... Henry VIII, had been adulterating the English shilling ... by replacing 40 percent of the silver in the coin with base metals ... Of course it was discovered and this 'bad money' drove out the pure silver shillings then in circulation. "
    Related Topic: Gold Standard
    Francisco's Money Speech, Atlas Shrugged, 1957
    Francisco D'Anconia's speech about money being the root of all evil
    "'So you think that money is the root of all evil?' said Francisco d'Anconia. 'Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. ... Money is made possible only by the men who produce. Is this what you consider evil?"
    Government Money Deserves a "Swift" Abolition, by Nicholas Curott, Mises Daily, 5 Oct 2006
    Recounts Jonathan Swift's campaign against currency debasemen in 18th century Ireland and decries modern day inflation brought on by government-controlled money
    "... just as Swift had forewarned, [t]oday we no longer have the comfort of laws preventing the government from forcing us to take whatever money it pleases. ... We must demand our right to use whatever money we wish to, whatever good or commodity individuals free from coercive interference would spontaneously adopt. Once we have a market supplied money, we can finally burn the paper trash that fuels government plunder and causes macroeconomic fluctuations. It will be our elegy to the tyranny of money theft."
    Related Topic: Inflation
    Monetary Central Planning and the State, Part 30: The Gold Standard as Government-Managed Money, by Richard M. Ebeling, Future of Freedom, Jun 1999
    Describes how, by allowing central banks to manage gold-backed currencies, the road was paved for central planning in other areas
    "While the goals for monetary policy may have been considered modest and limited in the eyes of the classical liberals of the 19th century, it remained a fact that the monetary system was a subject for national government policy. ... And as such, even most of the advocates of economic liberty argued for monetary socialism and monetary central planning. They failed to call for and defend the privatization of the most important commodity in a market economy – the medium of exchange."
    Monetary Central Planning and the State, Part 32: Friedrich A. Hayek and the Case for the Denationalization of Money, by Richard M. Ebeling, Future of Freedom, Aug 1999
    Shows the progression of Hayek's thinking on money from 1945 when he was agreeable to central monetary control to 1976 when he advocated a system of private competing currencies
    "The consequence was the constant abuse of the printing press and a resulting price inflation to feed the seemingly insatiable demands of privileged and politically influential groups. Hayek now concluded that some method had to be found to free the ordinary citizen from the government's monopoly control of the medium of exchange. The answer, he suggested, was allowing individuals the freedom to use whatever money they chose ..."
    Related Topic: Friedrich A. Hayek
    Paper Money and the Constitution, by Rick Lynch, Future of Freedom, Jan 2009
    Examines the historical period of the Articles of Confederation and how it led to controls on the issuance of paper money in the U.S. Constitution
    "The story of paper money is a simple one of greed and corruption fueled by the power of unchecked democracy degenerating into oppression and turmoil. For the Framers, the paper-money crisis was the manifestation of all their fears of mob rule followed by chaos, and it was paper money, far more than anything else, that prompted them to convene the assembly that gave birth to the Constitution."
    Robert Morris to President of Congress, by Robert Morris, The Papers of Thomas Jefferson, 15 Jan 1782
    Report, as U.S. Superintendent of Finance, to the Congress (under the Articles of Confederation); examines weights, measures and money practices in various states and countries, particularly England and France, and recommends coinage of U.S. dollars
    "As we are now shaking off the Inconveniencies of a depreciating Medium the present Moment seems to be that in which a general Currency can best be established so as that in a few Months the same Names of Money will mean the same Things in the several Parts of the United States. ... Altho most Nations have coined Copper yet that Metal is so impure that it has never been considered as constituting the Money Standard. This is affixed to the two precious Metals because they alone will admit of having their intrinsic Value precisely ascertained."
    Related Topic: Gold Standard
    The Federal War on Gold, Part 2, by Jacob G. Hornberger, Future of Freedom, Sep 2006
    Continues with the brief monetary history of the United States, discussing Abraham Lincoln's war loans and legal tender law, and the Supreme Court cases of Hepburn v. Griswold and Knox v. Lee
    "Through the U.S. Constitution, the American people brought into existence one of the soundest monetary systems in history. It wasn't perfect in that it didn't provide for a free market in money, but, by establishing gold and silver coin as the official money for the United States, it did protect the American people from the inflationary ravages of paper money."
    The Internet and the End of Monetary Sovereignty, by William A. Frezza, The Future of Money in the Information Age, 1997
    Considers how cyberspace promises of privacy and anonymity may lead to new monetary institutions and "a practical realization of laissez-faire capitalism" as advocated by Ayn Rand
    "It is possible, then, that a referent to external physical commodities or existing fiat currencies may not always be necessary to establish the value of money within cyberspace. While a self-supporting cyberspace currency may be impractical today, the possibility of achieving independence from external referents will certainly increase as the portion of the world's wealth that exists in cyberspace grows."
    The Organization of Debt into Currency: On the Monetary Thought of Charles Holt Carroll, by Robert Blumen, Mises Daily, 27 Apr 2006
    Review of the fractional reserve banking and monetary arguments made by Charles Holt Carroll, a 19th century Massachusetts merchant, in a collection of 36 essays re-published in 1964 in Organization of Debt into Currency and Other Papers
    "Carroll advanced several brilliant arguments against the system of 'fictitious money': that it is based on a confusion in thinking; that it creates a state of permanent indebtedness; that it leads to national impoverishment rather than prosperity; that it results in price inflation; and that it inevitably leads to bank runs and then to systemic banking crises; and that it unjustly redistributes wealth from the honest and industrious to bankers and their accomplices."
    An Empire Built of Paper, by Llewellyn H. Rockwell, Jr., The American Conservative, 27 Mar 2006
    A review of Empire of Debt: The Rise of an Epic Financial Crisis by William Bonner and Addison Wiggin
    "In the commercial republic of Jefferson, money was gold and silver. Government had no power to print currency. ... If the wall of separation between money and the state was not as high as it might have been, there was still a barrier that put a curb on power-mongering."
    Aristotle Understood the Importance of Property, by Richard M. Ebeling, 27 Sep 2016
    Discusses Aristotle's views on private property and property rights (contrasting them with those of Plato), the "ends" of human life, economics ("household management"), wealth acquisition, prices, money and related topics
    "Money, in Aristotle's view, was to serve as a medium of exchange. In itself, money was not 'productive,' but was merely a device for the transfer of commodities, and, therefore, of values. The problem was, Aristotle argued, that the use of money was open to 'unnatural' or chrematistic moneymaking – the accumulation of money for its own sake. Always looking for the 'happy medium,' in Aristotle's mind, this was one of those excessively 'extreme' types of action to be condemned on moral grounds."
    Ludwig von Mises, socialism's greatest enemy: His life and times, by Jim Powell
    Lengthy biographical essay on Mises, including details on Menger and Böhm-Bawerk
    "Mises began writing about money. ... He attacked the popular view that government officials could dictate the value of money, promoted by Georg Friedrich Knapp ... He maintained that, on the contrary, markets determined the value of money. ... Mises insisted that inflating the money supply is futile, because people will bid up prices. The beneficiaries are those who, starting with government itself, spend new issues of currency before prices go up."
    Our Secret Desires, by Claude Frédéric Bastiat, 1848
    Originally "Abondance, Disette" (Abundance, Scarcity), an essay in Economic Sophisms, translated in 1964 by Arthur Goddard
    "But, you say, if foreigners flood us with their products, they will carry off our money! Well, what difference does that make? Men are not fed on cash, they do not clothe themselves with gold, nor do they heat their houses with silver. What difference does it make whether there is more or less money in the country, if there is more bread in the cupboard, more meat in the larder, more clothing in the wardrobe, and more wood in the woodshed?"
    Related Topics: Free Trade, Labor, Prices
    Robert A. Heinlein's Soaring Spirit of Liberty, by Jim Powell, The Freeman, Jul 1997
    Biographical essay, including multiple quotes from fellow authors and significant excerpts from Heinlein's novels and stories
    "In Job: A Comedy of Justice (1984), Heinlein explores the shocks of moving suddenly from one era to another. Among other things, he talks about money. 'I had figured out,' the narrator says, 'that while paper money was never any good after a world change, hard money, gold and silver, would somehow be negotiable, as bullion if not as coin. So, when I got a chance to lay hands on hard money, I was stingy with it and refused to take paper money in change for hard money.'"
    Teaching Basic Economics to Fifth Graders, by Arthur E. Foulkes, Mises Daily, 21 Jun 2006
    Recounts the experience of teaching economics to fifth graders, one concept per week, for five weeks, focusing on trade, money, savings, competition and prices
    "This gave the egg farmer a supply of wheat that he did not wish to consume but rather to employ as a 'medium of exchange' to allow him to obtain shoes. In other words, he used wheat as a form of money. We then talked about what makes some goods better suited as money than others. For instance, wheat is better than eggs or fish because it lasts longer and is more easily divisible into units of equal quality. We then discussed things even better suited as money, such as gold or silver."
    The Essence of Liberty: What is it that really makes one a libertarian?, by David F. Nolan, Libertarian Party News, Mar 1995
    Discusses five points of "no compromise" that Nolan considered essential to libertarianism
    "The fifth and final key test of anyone's claim to being a libertarian is their support for an honest money system; i.e. one where the currency is backed by something of true value (usually gold or silver). Fiat money-money with no backing, whose acceptance is mandated by the State-is simply legalized counterfeiting and is one of the keys to expanding government power."
    The Federal War on Gold, Part 1, by Jacob G. Hornberger, Future of Freedom, Aug 2006
    Discusses some of the provisos in the U.S. constitution regarding coinage and the issuance of paper money
    "The paper money of today still contains a hint of what it once represented — a promise to pay money, rather than money itself. Take a dollar bill out of your billfold. Notice that at the top it states, 'Federal Reserve Note.' Why is it called a 'note'? Because it represents, somewhat perversely, what such a note once constituted for our American ancestors — a promise to pay something, namely gold."
    The Federal War on Gold, Part 3, by Jacob G. Hornberger, Future of Freedom, Oct 2006
    Describes Franklin Roosevelt's executive order confiscating gold and nullifying gold clauses in contracts, its constitutional ramifications and subsequent related history
    "The ultimate solution to this financial chaos, destruction, and morass lies in sound money. The ideal is a free market in money, as the Nobel Prize-winning economist Friedrich A. Hayek observed. The second-best solution is the type of gold standard established by the Framers, where gold and silver coin are the official money and where the federal government is required to redeem all bills and notes in such money."

    Books

    A Monetary History of the United States, 1867-1960
        by Milton Friedman, 1963
    Partial contents: The Greenback Period - Silver Politics and the Secular Decline in Prices, 1879-97 - Gold Inflation and Banking Reform, 1897-1914 - Early Years of the Federal Reserve System, 1914-21 - The High Tide of the Reserve System, 1921-29
    Money and the Nation State: The Financial Revolution, Government and the World Monetary System
        by Richard H. Timberlake Jr. (Editor), Kevin Dowd (Editor), 1997
    Partial contents: An Evolutionary Theory of the State Monopoly Over Money - National Sovereignty and International Monetary Regimes - From Gold to the ECU: The International Monetary System in Retrospect - The Gold-exchange Standard in the Interwar Years
    Selected Writings of Ludwig Von Mises: Volume 2, Between the Two World Wars: Monetary Disorder, Interventionism, Socialism, and the Great Depression
        by Ludwig von Mises, Richard M. Ebeling (Editor), 2002
    Partial contents: The Quantity Theory - On the Currency Question - Remarks Concerning the Establishment of a Ukrainian Note-Issuing Bank - Foreign-Exchange Control Must Be Abolished - Direct Taxation in City and Country
    What Has Government Done to Our Money?, by Murray N. Rothbard, 1963
    Partial contents: Money in a Free Society - The Value of Exchange - Indirect Exchange - Benefits of Money - The Monetary Unit - The Shape of Money - The "Proper" Supply of Money - Government Meddling With Money - The Monetary Breakdown of the West

    Videos


    Bitcoin the Cryptocurrency (Parody of Rudolph the Rednosed Reindeer)
    "You know dollars, and Euros and Yen and Pound Sterling, Reais, and Rubles, and Rupees, Renminbi, But do you recall? The most digital coin of them all ..."

    I Want My Bailout Money, by Michael Adams, the Health Ranger, 6 Jan 2009
    Hip hop satire song about Federal Reserve and U.S. Treasury policies

    Money, Banking and the Federal Reserve, by Ludwig von Mises Institute, 1996
    Explains the origins of money and banking, how and why the Federal Reserve was created and the effects it has had on society. Dedicated to Murray Rothbard.

    The introductory paragraph uses material from a Wikipedia article, which is released under the Creative Commons Attribution-Share-Alike License 3.0.