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Nowadays, most people see money and currency as interchangeable concepts. However, throughout history, many societies employed things other than currency as a medium of exchange. Hence, any means of payment can be defined as money. Other functions of money include being a store of value and a unit of account (University of Minnesota, 2016). The broad definition of the concept includes fiat money and commodity money. The currency used in all countries nowadays is an example of fiat money, meaning that it lacks intrinsic value (University of Minnesota, 2016). It meets all the criteria associated with the concept of money. It is a medium of exchange (one can buy things with the currency), it holds value over time, and it serves as a consistent tool to measure the value of the assets. However, the fact that the currency is subject to inflation makes it a less reliable store of value than commodity money in certain circumstances.
Before the introduction of fiat money, commodity money was used as the medium of exchange in most cultures. During the last few millennia, coins made from precious metals were the prevalent type of money. Before that, crops and animals were used as a means of payment (Fontefrancesco, 2019). However, alternative types of money regularly emerged in different societies until modern times. For example, tobacco was used as a means of payment in some parts of colonial America (University of Minnesota, 2016). The amount of produced tobacco was impossible to control, as farmers were constantly increasing their production (University of Minnesota, 2016). This example illustrates one of the main problems associated with commodity money significant fluctuations in quantity.
In the Bible, money is often denounced as the source of temptation, and earthly wealth is usually juxtaposed with the treasures of heaven. For instance, Matthew states that you cannot serve God and money (The Holy Bible, New International Version, 2011, Matthew 6:24). While most people hardly follow these principles nowadays, some of the ideas expressed in the Scripture apply to the modern world. For example, the rich rule over the poor, and the borrower is the slave of the lender (The Holy Bible, New International Version, 2011, Proverbs 22:7). This proverb remains viable millennia later, and the student loan system in the US before the reform could serve as a perfect real-life example of the concept.
References
Fontefrancesco, M. F. (2019) Food commodity market: History and impact of food trading toward SDG2. In Leal Filho W. et al. (Eds.), Zero Hunger. Encyclopedia of the UN Sustainable Development Goals (pp. 1-9). Springer.
The Holy Bible, New International Version. (2011). Zondervan.
University of Minnesota. (2016). Principles of Economics. University of Minnesota Libraries.
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