The essence of money in the modern world. The concept of money turnover

Money is an important link in all production relations. They, along with the goods have a common essence and similar origin. The currency is an inseparable part of the market world and at the same time is opposed to it. If the goods are used in circulation for a limited period of time, the essence of money is so important that without the finance this sphere can not exist.

Commodity-money relations

Money is a special kind of product, while acquiring a unique value. If we consider them separately, the essence of money and their functions are that they are an intermediary in the exchange of market values.

The necessity of the existence of commodity-money relations (and therefore of such concepts as finance, credit, etc.) is conditioned by the existence of various forms of ownership. Also great importance is attached to strict accounting and control over the volume of labor and consumption.

Full accounting and control of the most diverse types of concrete work is simply physically impossible because of its socio-economic heterogeneity, which manifests itself as follows:

1) The work of the physical and mental is largely different from each other.

2) Qualified and unskilled work is also a polar category.

3) There is a relationship between harmful and easy work.

Accounting and control are carried out by the method of reducing various types of concrete work to a homogeneous abstract concept. The essence of money is to distribute the products of labor, depending on its quality and quantity. In addition, they participate in the commodity exchange between organizations and enterprises of various forms of ownership.

From the need for finance follows the essence of money and money circulation. They serve as a mass commodity equivalent, which is used to express, measure and control social labor, organize the exchange of goods, distribute work products among employees and perform material incentives.

The product is a unity between its cost and value for consumers. Therefore, it became necessary to keep it recorded both in kind and in value.

The main functions of money

In modern society, the following functions of money were formed:

1) The essence of money in the modern world is that they are a tool for intensive control of financial units. That is, the consumer supervises the manufacturer, the payer over the supplier and vice versa, the bank checks the process of issuing and repaying loans to customers, etc.

2) Perform a key role in the organization of settlements in the economy (the need to maintain a balance between income and expenditure and to ensure that the former regularly exceed the second).

3) They are the main criterion in the distribution of quality and quantity of work (elimination of leveling, use of a wide range of pay for the work done, stimulate the productivity of employees).

4) This is an integral component of trade processes (each employee spends his money received to buy things that contribute to meeting his needs).

5) The essence of money in the economy consists in the fulfillment by them of the function of the means of organizing the relationships between agriculture and cities, other forms of ownership.

6) Promote the spread of different types of products of society.

The totality of mankind's output manifests itself in two forms: commodity and money. This provision is relevant both in the definition of this concept and in the distribution of its components. Due to the components, a so-called reimbursement fund is formed. Its main task is to cover the costs of production. Also on this basis, a national income is formed , which includes savings, insurance reserves, administrative expenses, defense funds and social and cultural activities.

Preservation of foreign exchange balance

What money is there? To ensure the stability of the currency, not only gold is used, but also huge volumes of goods available to the state. They contribute to the stabilization of the financial masses due to the fact that they are based on concrete social work.

It is extremely important to maintain a balance between the volume of money in circulation and the goods that arrive on the shelves. This fact explains why bills are issued only in case of real need for them.

Gold serves as an international means for purchases and sales, therefore the state reserves of this precious metal occupy a special place in the process of ensuring the stability of the currency. Thanks to them, there is an opportunity to increase the level of imports and lower, respectively, exports. This method is used to expand the turnover within the country and increase the material support for the currency.

How to make money? The lion's share of ensuring the stability of national finance falls on the foreign exchange reserves that foreign countries invest in our country.

So, in brief, the functions of money look like this:

1) Determining the measure of value and price scale.

2) The means of circulation.

3) The facility for savings and savings.

4) World money.

Let's consider each of these points in more detail.

What is a measure of value

The measure of value is the indicator by which the price of the commodity is actually determined. It is an expression of the quality and quantity of work that was required for its manufacture. In practice, there are many specific types of labor that are measured in monetary terms.

The labor materializing in commodity objects, more precisely, its cost, is defined in the form of the price of production, but it, as a rule, differs from its cost, as it often deviates from it.

In order to increase the purchasing power of money, it is necessary to reduce prices. But this can serve as the emergence of a shortfall in profits. And their increase will have a negative impact on the purchasing power of the currency. This is another aspect in which the essence of money is revealed, the modern aspect of which has many facets.

Often, the requirements that are imposed on the price of products, contradict each other. In order to eliminate this problem, it is necessary to take the following measures:

- to increase real incomes of the population;

- minimize the consumption of goods that are harmful;

- organize incentives to purchase products for the population, which are considered unprotected.

The measure of value is the basis for exercising control over the national monetary unit according to the scheme "there is money, there is no money".

Regulation of the measure of value

To reduce individual costs to the level of the need that society needs, the following measures should be taken:

1) Properly implement the planning of current prices.

2) Adjust the cost price.

3) To set adequate tariffs.

4) Conduct the control of rates.

These steps can create incentives for legal entities to engage in lower costs and begin to increase labor productivity.

To measure the price of goods, you need to equalize them within a single scale, which is defined as the weight of gold that is used in a particular country in order to determine prices. This is another facet in which the essence of money manifests itself.

Another significant stage in the increase in the scale of production is the performance of banknotes in the function of circulation. At the same time, there is an interaction between the turnover of goods and finance. That is, the currency plays the role of an intermediary involved in the exchange of products. In this case, one type of product is exchanged for another.

The essence of money also lies in the fact that they are constantly in motion. They can not be removed from the process of market relations completely. While the products sold come and go, the currency remains in circulation and continues to function endlessly.

As a means of circulation, money is controlled by the consumer. He spends them only on the products that meet his needs. After providing the next cycle of turnover, the currency is returned back to the bank, but a certain part of it can be withdrawn from circulation in order to perform other functions.

Money as a means of payment

The function of money as a means of payment was formed as a result of the commodity turnover process, that is, thanks to it, the currency acquired the status of a medium of circulation. Finance becomes solvent at a time when the goods are purchased without paying for it at this very minute. On the basis of this task, obligations and claims are formed, which are of a long-term nature.

Mutual relations, which are based on the function of money as a medium of circulation, are fleeting. But the work of currency as a means of payment is carried out in the process of long-term relationships, for example, which include the payment of salaries, repayment of loans, payment of taxes. On its basis, conditions are created that contribute to cash savings during payments with cards, when material means replace account entries. That is, there is money, there is no money.

Finance as a Means of Accumulation and Saving

Being a means of accumulation and saving, money makes it possible to keep the value in its mass form. In this situation, it can at any time become part of the circulation as a means of payment.

When finance plays the role of a means of circulation and payment, they are a kind of substitute for gold, that is, they become signs of value, a manifestation of what money is - nationwide banknotes.

Accumulations from the currency cease to be an end in itself, when they act as one of the forms of creating funds in the expansion of production. For enterprises, they become profit, funds for economic stimulation, balances on bank settlement accounts.

As a means of accumulation, the currency differs from the object of circulation in that it functions not as a fleeting equivalent form, but as a representative, own speaking, of value, which personifies it for a long period of time. Therefore, it is very important to determine whether inflation of money will ensure their stability so that they can fulfill their accumulation tasks, which otherwise becomes meaningless.

World Money

In connection with the existence of the constant development of commodity relations between countries, such a concept as world finance has appeared. This is another essence of money. Money as money and money as capital are part of the world's financial turnover. Within each country, they work in the form of signs approved by law. At the same time they possess both the ability to purchase and the strength of solvency.

Outside their state, money lives in the universal form of ingots of valuable metals, that is, they are expressed in the universal commodity equivalent. In the course of the history of international settlements, in order to preserve national currencies between former members of the Council for Mutual Economic Assistance, it was decided to establish a financial exchange in the form of clearing. For its base, a transferable ruble was chosen, which has a gold content, but does not exist. Its value was slightly less than 1 g of valuable metal, which was used to determine the price scale in the world's mutual settlements.

What is the money turnover

When the process of purchase and sale occurs during the commodity-money relations, payments and settlements appear. They also take place during the distribution of funds, which is the essence of money. The concept of money turnover includes the totality of all payments.

In these conditions, the population and enterprises communicate with each other through two market groups. People use earned income to purchase consumer goods. Enterprises, in turn, are engaged in selling their products to the people, as well as other organizations in order to get revenue for further production processes.

The resource market offers companies a wide variety of goods (material, energy, labor, natural) that are required for production. If you depict the interaction of resources and payments in the form of a clockwork mechanism, the former will move at the rate of the arrow, and the second - in the opposite direction.

Among all the flows, the most important role belongs to the national (cumulative) product. It represents the total value of goods and services produced, from which the essence of money and credit follows. And also it includes the national income, which is formed from all the means received by the population (including wages, rent, interest payments and profits).

In order to quantify the flow of goods, finance is used. Figuratively speaking, the movement of goods is pipes, and circulating money is the fluid that flows through them. The national product takes the form of estimating the current velocity of this "liquid", and the amount of currency is expressed in its volume.

In the event that investments and savings join the circuit, two ways are formed for the passage of funds from the objects that act as their owner to the markets for the products:

1) The costs are intended specifically for consumption. This is the straight path.

2) Means move through savings, investment and financial markets - the so-called indirect path.

Mediators have a significant influence on the turnover of money and goods. Since they are part of the financial system, these people are engaged in redirecting funds from creditors to borrowers. Often they use these financial resources not in the state, but in their personal interests.

Cash management

In order to conduct further analysis of how the product and revenue cycle is going on, it is necessary to include in the list of public sector facilities purchases and loans that the country conducts.

The expenses that the population makes when paying taxes to the state budget are partially compensated for by means of payments in the form of transfer payments. Without taking them into account, we will get the amount of taxes in pure form.

When there is a budget deficit, the state covers it in financial markets through loans. That is, it sells securities to both financial intermediaries and ordinary people.

If you lower taxes, this will give an incentive to increase savings and consumption, and this, in turn, will positively affect the growth of the national product. Increasing the size of public procurement also serves as an incentive for him, as it raises the level of income from the sale of goods and services (in the event that the salary increases).

Among the instruments of government influence on the circuit is monetary policy. By it in general terms are meant actions of the authorities aimed at changing the amount of money that are in circulation.

The model of money turnover is a closed economic system, on which there are no connections with the outside world. It will have a much more complex structure if its elements are supplemented by monetary relations that are based on international relations: the export and import of services and goods, loans and credits between countries, purchases and sales of financial assets on an international scale.