Theory of money-Manish Padhi

                                    Theory of Money- Manish Padhi

A further step in the path of economic development to higher

levels of well-being can be regarded as having been taken when

the artisans themselves begin to procure the raw materials for their

products, even though they still produce these products for the

consumers only on order. This state of affairs can still, with few

exceptions, be observed in small towns, and to some extent even in

larger places in some trades. The artisan does not yet manufacture

products for later, and hence uncertain, sale. But he is already, to

the extent of his labor power, in a position to meet the needs of his

customers by making it unnecessary for them to expend efforts on

purchasing or producing raw materials in a frequently highly

uneconomic manner.

 But in scientific discourse a need was felt for a term designating

all economic goods held ready for sale without regard to their tangibility,

mobility, or character as products of labor, and without

regard to the persons offering them for sale. A large number of

economists, especially German economists, therefore defined commodities

as (economic) goods of any kind that are intended for sale.

The commodity concept in the popular sense is nevertheless of

importance not only because law-givers3 and a large number of

economists employ the term in the popular sense, but also because

some of those who are aware of the wider, scientific, sense of the

term sometimes employ this or that element of the narrower, popular,

meaning in their definitions.

Money is not the product of an agreement on the part of economizing

men nor the product of legislative acts. No one invented

it. As economizing individuals in social situations became

increasingly aware of their economic interest, they everywhere

attained the simple knowledge that surrendering less saleable

commodities for others of greater saleability brings them substantially

closer to the attainment of their specific economic

purposes. Thus, with the progressive development of social

economy, money came to exist in numerous centers of civilization

independently. But precisely because money is a natural

product of human economy, the specific forms in which it has appeared were everywhere and at all times the result of specific

and changing economic situations. Among the same people at different

times, and among different peoples at the same time, different

goods have attained the special position in trade described

above.

Money is not the product of an agreement on the part of economizing

men nor the product of legislative acts. No one invented

it. As economizing individuals in social situations became

increasingly aware of their economic interest, they everywhere

attained the simple knowledge that surrendering less saleable

commodities for others of greater saleability brings them substantially

closer to the attainment of their specific economic

purposes. Thus, with the progressive development of social

economy, money came to exist in numerous centers of civilization

independently

As the price of a commodity is the average cost of production, it includes the fact that a tiny proportion of commodities may be found, although finding goods is hardly typical of modern manufacturing processes.

Marginal utility as the source of value meant that the perceived need for an object was seen to be dictating the value, on an individual rather than a general level. The implication was that the individual mind is the source of economic value.

Although Menger accepted the marginal utility theory, he made deviations from the work of other neoclassical pioneers. Most importantly he fundamentally rejected the use of mathematical methods insisting that the function of economics was to investigate the essences rather than the specific quantities of economic phenomena.