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The forms of money

The functions of money in their evolutionary process were fulfilled, and continue to be fulfilled, by both objects and obligations.

Money has different forms over time and space. The form of money in the economic sense must be understood to mean the type of material goods which fulfils the function of money at the appropriate level of economic and legal development of society (Fig. 6).
The prevalence of and demand for one form of money or another is defined by indicators such as negotiability, convenience, portability, durability, divisibility, demand, and sufficient amount in circulation.
It is necessary to point out the following basic forms of money which arose in the process of evolution:
  1. natural money:
    • non-standardised goods including metals by weight (commercial metals);
    • precise-weight metal ingots;
  2. credit money:
    • commercial bills;
    • banknotes of private banks;
    • currency:
      • cash currency:
        • state banknotes (treasury notes) backed by metal;
        • state banknotes (treasury notes) not backed by metal;
        • coins with nominal value;
      • non-cash money Ч deposit money (checkable accounts);
  3. financial money:
    • "quasi-money;",
    • stock which fulfils the function of money to a limited extent.
These forms sprang up successively, as a rule, and were prevalent in certain periods of time (Table 3). New forms of money arose primarily because it was necessary to minimise trading costs and to accelerate accounting and trade operations (Fig. 7).

Key commodities
1. Natural exchange
Products (livestock, fur, fish, etc., metals and, finally, silver and gold)
2. Regular trade
Gold and silver
3. Capitalist production of the free competition era
Products (consumer and investment goods); land; workforce (labour); monetary capital
Gold and silver; credit money (commercial bills, banknotes, deposit money)
4. Modern capitalism
Products (consumer and investment goods); land; workforce (labour); business; monetary capital
Credit and financial money (commercial bills, banknotes, deposit money, bonds, shares and other securities)

They all have the right to exist even today, and only public (or State) recognition can force one kind of material goods or another out of circulation or confer on it the status of legal money.
Looking at these forms of money in consecutive order, we shall try to define their properties as objects and as obligations.


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