Introduction
The word “money” has been defined differently by many people throughout history. The role and nature of money have been changing within the past ten centuries. People have been using different forms of money. Barter trade entailed the use of commodities and goods. People could exchange such commodities depending on their needs. Money has been a powerful force in the establishment of many communities and social relationships (Weber, 1904). This essay describes how the purpose and significance of money have changed within the past years. The essay also describes how my ideas about money have evolved during the term.
Definition of Money
Money is, therefore, defined “as a medium that can be used to purchase specific services and goods” (Weber, 1904, p. 3). Money is used by people to measure the value of assets, commodities, and services in different markets. Money can take various shapes, such as coins, notes, gold, and checks. Personally, I think money is a medium that makes it easier for people to purchase different commodities. Money is also a sign of power and autonomy. It makes it possible for individuals to get whatever they want. I also believe that money has a powerful role in modern society. Money brings people together. It has become a strong force that can make or break human relationships. The role and significance of money in society should never be interpreted lightly.
How the Purpose and Significance of Money has Changed Historically
The history of the world cannot be described effectively without identifying the function of money. Many ancient societies and communities lived without money. Such societies functioned effectively. For example, the Inca Empire of South America never used money (Ferguson, 2008). This community focused on the aesthetic value of rare metals such as gold. However, the history of the world changed when people began to monetize different commodities.
After a few decades, governments were established, thus resulting in the creation of credits by financial institutions. Such banks could not use precious metals and other commodities. The above historical development “led to the creation of bonds” (Ferguson, 2008, p. 65). The bond would become the greatest revolution in the history and evolution of money. Throughout the 20th century, the issue of property ownership became common in different parts of the world. A small number of people began to own property in an attempt to maximize their profits. The game of Monopoly shows the role played by money in the world today.
Money has also been a critical aspect of our modern social system. For instance, some landlords have been collecting rents from poor tenants (Ferguson, 2008). People began to look for money through hard work. This fact explains why the middle class began to take new positions, as outlined by Karl Marx. They also began to purchase or construct their own houses.
Money “was the crystallized relationship between buyers and sellers” (Ferguson, 2008, p. 341). It later became the medium of exchange between debtors and creditors. Money has become the image of mankind. Money reveals every working hour or day. This fact explains why “human beings can value themselves and the resources around them” (Ferguson, 2008, p. 358). The history of money might appear complex to many people. However, the outstanding fact is that its rules have not changed. People have become “financial beings who can accurately determine the monetary value of every resource around them” (Ferguson, 2008, p. 358).
The above discussion shows clearly that “financial intermediation has the potential to permit an efficient allocation of resources” (Ferguson, 2008, p. 341). Karl Marx presents a unique view of money under capitalism. According to Marx, the behavior of money appears to predict the economic activity of every society. However, the “focus on money can be described as inadequate because production is a powerful social institution” (Ferguson, 2008, p. 132).
The production of various products and goods is something that follows a social process. This process has given rise to “class struggles, antagonistic relationships, and dependency on exploitation” (Marx, 2004, p. 3). It is agreeable that capitalists use money in order to become rich. Capitalists will always start with a small amount of money. They will transform money into new commodities. They will go further to transform such commodities into more money.
This kind of knowledge goes further to support the evolution of money. More people have been focusing on money as the biggest measure of value. This fact explains why even the leading communist nations cannot live without money. According to Max Weber, money is something that can purchase power. This was the same case in Germany and America. However, Weber goes further to describe how money cannot buy social honor. A person can use the money to acquire a specific status in society (Ferguson, 2008). Throughout the years, money has been a unique aspect of every society. Money should be used to define and analyze the practices of every society in the world.
It is agreeable that the role of money has changed significantly within the past centuries. The medium that was once used to purchase different commodities eventually became a critical aspect of many societies. Money has been used to measure the value of resources and financial markets. Weber also explores how money has the potential to purchase power (Ferguson, 2008). These aspects of money make it a vital force in every society. Money has also “made human beings financial creatures” (Ferguson, 2008, p. 65).
How My Ideas about Money Have Evolved Throughout the Term
I used to treat money as a means of exchange before the beginning of the term. I also believed that money was a tool used to value resources. However, I have gained new ideas regarding the role, history, and significance of money in society. Most of the major revolutions and changes experienced in different societies have been fuelled by money. The wave of capitalism was motivated by the desire to accumulate more wealth.
The middle-class also struggled in order to achieve their goals (Ferguson, 2008). Many governments have participated in the historical development of money. It initially became the tool of capitalist exploitation. It eventually became a form of commoditized labor. It satisfies the desires of the capitalist class.
Financial institutions emerged in order to dictate, control, and monitor money. This goal has eventually created a world that treats money as the measure of every available resource. I have also understood why human beings might never understand the complexities associated with money. Money has become the true measure of every human being. Money is used to define and allocate resources (Ferguson, 2008). This understanding explains why money has become a powerful force that can replace or re-pattern all human relationships. The role of money will also change in the future.
Reference List
Ferguson, N. (2008). The Ascent of Money: A Financial History of the World. New York, NY: Penguin Group.
Marx, K. (2004). The Manifesto of the Communist Party. Web.
Weber, M. (1904). The Protestant Sects and the Spirit of Capitalism. In M. Weber (Ed.), The Protestant Ethic and the Spirit of Capitalism (pp. 1-4). New York, NY: Routledge.