Is money a concept

Theory of money - the concept


The properties of modern money

By Jürg Conzett

There was always money. But money as we know it today has not always existed, and certainly not everywhere. When money emerges, for example in the form of coins, it is not what we know as money today for a long time. It only becomes this in the transition to the 17th century. The economic development in Western Europe at that time led from an earlier use of money to the one who has money today. It is the transition that money no longer only plays a role on the fringes of economic activity, but takes on the main role in it. This fundamentally changes the way of doing business as well as the money itself, which is used for business. Now this type of money has spread all over the world.

We have identified 12 properties of today's money. These form a kind of totality, and "money" can only be understood in the overarching combination of these properties. The first four properties form the basic elements of money, the second four properties belong in the field of social sciences, i.e. how people interact with one another, and the remaining four elements belong in the field of economics.


  • Money is Medium of exchange: the means to buy other things. The function of money is to be exchanged for something that is not money. And basically every thing, every activity, every real thing can be bought - and can thus become a commodity in exchange for money. Money is only money if and as long as it can be used to buy something of these goods.


  • Money is Exchange value: Money is the value we pay for a commodity of corresponding value. In other words: monetary value measures the value of goods - their exchange value.
  • Monetary value is one Amount without substance. Money can be made of anything, but its value is nothing. As value, money has no substance. Most of the money is kept in accounts anyway. The number in an account testifies to the existence of a certain amount of monetary value, but that amount in itself consists of nothing more than that it is so testified. As value, money consists solely in its exchange function.
  • Needs moneyMakes. Because money is a lot without substance, it is only made into money through power. Money needs a power to ensure that this amount counts. That power is the states. The states create money as currency, forbid any money creation that is not under their power, and stipulate the use of money created in this way. This means that states are making their money legal tender. States use their power to force people to recognize money as power: as the power to get goods in return - that is, to be purchasing power.
  • People always pay people with money. We pay money for something, but always to someone. The fact that goods cost something always means that people demand this payment from other people. Money assumes that people have the things they and others need as property. In certain Asian countries the concept of property has not developed as far as in Europe; there it will be interesting to see how money develops.
  • Money always means that Exclusion other people. Money excludes people from what they need so that they have to buy it. In principle, all people who cannot or cannot pay money for them remain excluded from the goods that can be bought. Therefore only those goods are used that find a buyer, someone who pays and can pay money for them. Goods that cannot find such a buyer are withdrawn from use by other people: they are destroyed.
  • Money is Power of disposal about the work of others. Money makes people do something that others pay money for. Today we live mainly from things that we have to buy. For that we have to get money. In order to get money, everyone has to sell something to others: usually something they do or manufacture, or in the rarer case something from their property. Most of the time, it is people's work performance that we get for money. That is why one can also say: with money, people have people.
  • Money promotes and conditions competitorfor money. Since everyone has to get money from others, everyone has to compete for money. And everyone can only get money from others. So everyone is in competition with what they have to offer and what they are trying to get money for - unless they are the only ones who have something to offer. States are also in competition with one another.
  • Money acts as Way of thinking. Dealing with money requires us to think in terms of money. That means: when we deal with money, we have to think about its value. The more comprehensively we deal with money, the stronger the reflex to see in everything a pure, empty unity, quantifiable but without content. As universally as everything is available for money, we apply this form of thinking to everything universally - even where it is not about a purchase. We interpret the world according to this way of thinking, which we adopt when dealing with money. So we think, for example, that everything in the world, every thing, every being, every activity is ultimately comparable with all the others: something of the same one unity. We first have to learn again that not everything is comparable.
  • Money is called capital used. Money has to serve as money more money become. Because in order to live on money you have to make profits - in money. A society whose supply is based on money lives from business that the individual conducts for money, whether in the production of goods or in trading them. Every business and every company depends on making a profit. In such a society, this does not have to be successful without exception, but mainly. The money invested must function as capital: as money that generates more money. That is the Capital function of money.
  • Money therefore needs one Finance. In order to serve the capital function of money, financial papers are needed. Money needs more added value than the sale of goods generates. In the long run, the profits generated by the production of goods cannot meet this ever-increasing need for added value. Profits expected later can, however, be anticipated in the form of securities; On the one hand, they promise this profit and, on the other hand, can already be traded as value themselves. Financial securities become money through profit expectations, but only as long as the profit expectations persist.
  • Money as Credit. Money is created as credit. Countries do not create money with the banknote press, but rather by granting banks credit from the central bank at a certain interest rate. All financial assets - with the exception of cash - are held by banks: Anyone who has money in an account with banks lends them this money as a loan, for which they (mostly) pay interest. They in turn pass the money on to other economic subjects in the form of loans and demand interest in return. All the money is therefore already available twice: as credit for the account holder who "has" the money in the account, and as money in the hands of the borrower who can use it to pay and do his business.


  • The modern monetary system, better known as the market economy or capitalism, has survived every crisis so far. The reason is that the 12 properties described above form a coherent system that is extremely resistant.
  • Capitalism is a success story, punctuated by periodic breakdowns. A skilled worker on the Acropolis in ancient Greece received 14 grams of silver per day. A worker in Zurich around 1900 received four times more for his 10 hours of work, i.e. 60 grams of silver or two talers or 10 francs. Today, 10 francs is the minimum wage for an hour; most of them earn many times as much. Worldwide prosperity has increased enormously over the past 100 years.
  • In the 21st century, however, the system is reaching its limits, which are manifested in «crises», i.e. in problems that cannot be solved by traditional means: global warming, migration crises, social dissatisfaction, land grabbing, terrorist attacks. All of these crises are related to our modern monetary system.
  • Reforming the system with measures that focus on individual properties - such as sovereign money, gold cover, transaction tax - will fail. Reform would have to be more radical to take effect. The question of whether money could even be abolished can no longer be imagined. But here is the key. Our money is historical, so it could be changed again historically.