What Makes The Money Valuable?

The idea of having a thing like , money is very fascinating ever developed by man. Most of the people do not know the origin of this idea, and also why money is valuable.

Money was not used, thousands of years ago. ‘Barter’ system was prevalent among men. Under the system if someone wanted something, he had to find someone who had this article. Then an offer had to be made in exchange. If the man did not need the thing offered, then naturally he could not own his article.

During the passage of time, certain things came to be used as money because practically every one would take these things in exchange. Cow, grain, tobacco, salt, skin and beads were used as money among who were always ready to accept.

Finally, all these varieties of money were replaced by pieces of metal, especially gold and silver. These coins were later on, made to some size and standard, including parity and weight. These coins in return represented amounts of various objects. So many coins represented a cow or 50 pounds of to bacon and so on.

Now we have bills and coins used in Government and everybody accepts and uses this money. Money, broadly speaking does four main things for us.

Firstly, it makes possible exchange of trade. Take for a case, a person needing a bicycle, in return of lawn mowing. But the owner of the lawn does not have a bicycle to give. The owner of the lawn gives money in lieu and with money. a bicycle can be owned from the bicycle shop. Money made it possible to exchange the work for something that we need.

In the second place, money is a “yard stick of value”. This means money may be say Rs. 50 an hour to mow a lawn. A bicycle may cost Rs, 800/- each. We now get an idea of the value of a bicycle in terms of work.

Thirdly, money is a “store house of value”. Crop of tomato cannot be stored, because they are perishable. But by selling them we can store money for future use. Fourth thing, that money serves us as a “standard for future payments”. We make a part of the payment, say Rs. 50/- towards the cost of bicycle and promise to pay the balance, later on. One does not pay in tomatoes, tables or balls. The buyer and the bicycle shop owner have agreed on immediate and later payment and its mode.