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Object and liability components of money

The physical properties of money do not appear as essential. Money does not have common physical properties, and some types of money do not even have a material form. (table 7)

Object and liability components of different money forms

It is essential to note that precise calculations of the object and liability components of different types of money are only possible with concrete examples.

For example, if the cost of manufacturing US Dollar banknotes equals 50 cents, then the object component value of one-dollar coin will equal 50% , and in 100 dollars it will be 0.5. Equally, when attempting to define the object component of non-cash currency, it is possible to carry out the following calculation: information about the name of the owner of the account and the state of his bank balance occupies no more than 40 bytes. A hard disc with a capacity of 40 gigabytes nowadays costs no more than 100 dollars. Therefore, the cost of storing such information is 10-7 dollars. If a certain account-holder only has 1 dollar in his account, then the object component will equal 10-5 %,and if he has 1 billion dollars, then the object component will equal 10-14%.

Yu. Maltsev and I. Shkarinov write: The legislator calls money an object only because of the convenience and expediency of regulating the legal relations linked to owning and managing money in accordance with proprietary law, although in essence these relations are ones of obligatory/ liability nature.

"... The consumer value of money lies in the fact that it serves as a general equivalent, mediating the exchange of all other property. Its economic character of general equivalent has not yet been reflected by the law and is the cause of misunderstandings, which the formation of purely legal constructions leads us to In fact, insofar as it is impossible to effectively apply methods of defence (vindicatory and negatory lawsuits), characteristic of the law of estate/proprietary law, to the demand for cash, then the status of money as some sort of material object loses its meaning177

Having analysed the forms of money, we obtain a graph of their proportional prevalence at different times (fig. 24).

Legal relations, arising during the use of different money forms

From fig. 24, we can conclude that, with the development of civil and industrial relations, the demand for exchange value of money is higher than for its direct consumer value.

However, during an industrial crisis and the resulting crisis of public confidence in the national currency, a reverse process takes place, when all those involved in the circulation of goods, expecting to go completely bankrupt, try to convert exchange value into consumer value. In this way, a societys turning away from one form of money during a time of crisis bears witness to the fact that this type of money has lost the function of money and therefore is being ousted from monetary circulation. Up until the crisis it was regarded as money, but during and after the crisis it is simply no longer accepted.

However, in case of normal development, the object component/ value of different forms of money strives towards zero, since an improvement in the circulation of money leads to reducing representation of liability information in object form. We can illustrate this with the following example..

In Ancient Babylon liabilities (promissory notes) were written on stone tablets weighing up to a kilogram, in Ancient Rome they were written on clay tablets weighing up to 300 grams. After that the bearer of such information became a parchment with a weight of 100 grams, from the fifteenth century onwards it became paper (10g) and nowadays the information is carried nearly everywhere on electronic bearers, where one liability occupies approximately 100 thousand molecules of silicon: much less than 1 mg. Bill Gates development of electronic technology and the reduction of the co-efficient of information friction" 178 with the creation of the quantum computer will reduce the electronic bearer to between 10 and 100 atoms.

Now the value of a product is fully separated from its physical form and appears in a distinct, public form, without the need to be attached to some or other type of material commodity body. It represents a public symbol of a physical commodity and functions in the same vein, relying only on public guarantee. Its value now is expressed simply by a number, confidence in which is confirmed by the agreement of separate parties, and also by the agreement of the public and the government. The latter guarantees this confidence in the name of the public and on the basis of the power invested in it by the people, by means of the corresponding legislation and established procedures.

Thus, the public role of money, as a representative of value, signifies that every type of commercial money is full-bodied money, regardless of whether or not it has a physical content. Whether money is fullbodied is defined not by its existence in a purely material form, but by its ability to completely fulfil the functions dictated by the demands of the corresponding stage of commercial relations development 179


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