MONEY. The word "Money" is believed to be derived from Moneta, an attribute of the Roman goddess Juno, because the ancient Roman Mint was established in the Temple of Juno Moneta. It is possible however that the goddess's attribute Mo neta was itself derived from the use of the Temple as a Mint.
Money is often described as a medium of exchange. If a man exchanges his labour for money, and exchanges the money for food, he is in effect exchanging his labour for food. The money intervenes as a means or medium, received only to be parted with; the end is the food.
Price.—The exchanges in which money is or may be used as a medium are of a certain definite type ; they are exchanges organ ized through markets. In order to arrive at a more precise con ception of money, it is essential to make clear what this means. We can imagine casual and isolated exchanges being effected in a primitive state of society. A man exchanges a cow for an orna ment. He prefers the ornament to the cow and his neighbour prefers the cow to the ornament, and these preferences are them selves sufficient to bring the exchange about. In a market, how ever, exchanges are not isolated. The market is so organized that any one contemplating an exchange can compare the things which different people are willing to give for what he has to dispose of, and can select the most favourable offer. He will not exchange an ornament for a cow if he knows that someone else will offer a cow and two sheep. But suppose someone else offers twelve sheep or a carpet, how is he to decide among them all? What is needed is some common basis of comparison of the offers. A solution is to be found in the selection of one of the products dealt in, to be used as a medium of exchange. If all the different things are exchanged in the market for specified quantities of this medium, the desired comparison becomes possible. For any particular product no one will offer more or accept less of the medium than his neighbours. The market equalises the terms on which, at any one time and place, all the exchanges are made. In a market so organized every product has its price, the quantity of the estab lished medium for which it will exchange. The price is a definite quantity at a given time and place because, in virtue of the equal izing effect of the market, similar things do not exchange for differ ent quantities of the medium. The comparison of exchanges is a
comparison of prices. At the time the comparison is made, the prices are those involved in hypothetical exchanges. Once an ex change has been concluded, it ceases to play a part in the com petition of the market ; it is no longer available as an alternative.
To quote a price is to make an offer. Acceptance of the offer creates an obligation on the seller's part to deliver the goods to the buyer. On the other side it creates a debt from the buyer to the seller. The debt is discharged by the delivery of money. Thus the market. is composed at any time of a number of competing offers of goods at a price, or alternatively of a number of com peting bids for goods at a price. Money, the medium of exchange, supplies the unit in which price is reckoned, the measure of value. Money is the means appointed for the payment of debts.