Theoretical and methodological approaches to the issue of money as an economic concept

Abstract

The article highlights the need to thoroughly study the issue of money as an economic concept, which enables the shaping of an adequate idea of the complex system of economic relations and implementing policies for the state’s influence upon the market economy through institutions of the credit system. The paper provides a critical analysis of the theoretical and methodological approaches to the issue of money, which view the phenomenon through external forms of manifestation or functionality. Some competitive approaches applied for under- standing the issue of money are critically considered. It is concluded that they define money depending on its material nature, particularly commodity or non-commodity nature. It is stressed that money represents the very possibility of economic life of the society and serves as a basis for continuous and permanent economic activities of people. In this regard, there are attributes according to which money should be seen as a social phenomenon, which supports institutional sustainability of economic life and provides social connections in the reproduction process, and thus ensuring its continuity. It is justified that the most appropriate way to define the essence of money is through the concept of overall equivalent, or a measure of value of all goods and services. This reflects the correlation of all goods and money, a universal measure of value, and therefore makes goods suitable for exchange. It is emphasized that money, being necessary for everyone as an equivalent, can be considered as a specific economic good which is able to definitely and freely be accepted as payment for all goods and services and measurement of their value. Such theoretical and methodological approach implies that in order to determine the essence of money, it is necessary to specify its particular attribute that allows money to perform all their functions. The circumstances under which the essence of modern money reflects the process of transforming money from a product of commodity exchange into a completely independent economic phenomenon are defined. Thus, money is able to influence both the production of goods and their exchange, indicating the role of money as a driver of human civilization.