Introduction
The history of money is inevitably interrelated with the history of social development. The invention of money is associated with the issues of morality and justice. Conferring the first metal coins with value became an attempt to balance the social and to measure the quality of goods and services. These moral preconditions of the emergence of money, the social conventions that regulate and control it, and the evolvement of its status in the present-day world can be regarded as the most significant events in the history of money. Although the philosophers and the government officials considered money as a remedy for the variety of the social and political problems, the difficulties that have happened in the past and have transformed into the new challenges in the modern society make it clear that the nature of money is far more complex than it can appear at first glance. The economic, social, and ethical problems that the global society currently faces prove that the money policies existing now do not provide solutions and are inefficient. It also proves that the systematic changes in the money regulations are required.
Ethics of Money
It is considered that people used the direct interchange of goods before the money invention. However, it was problematic because sometimes people didn’t want or didn’t need the goods which the other person offered. The method of barter couldn’t provide security and equality because the goods of different quality could be exchanged. Money became the mean for the creation of equality among the goods and services of different kinds. The idea of reciprocity lies on the basis of the money conception.
According to Aristotle, “reciprocity in accordance with a proportion and not on the basis of precisely equal return” holds the relations between the community members (Aristotle 1). In the ideal image, money is meant to serve for justice and equality. When a person commits a crime, it is expected that he or she will be punished. The same is with rewarding. When a person acts decently, he or she wants to be rewarded deservedly.
The opposition between good and bad can be applied to the goods produced by people and their prices. When money obtained its value, it began to be perceived as a reward. The goods of high quality and accepted by the members of the community as valuable were priced according to their high value. The consideration of money as a reward brings forward the issue of value that is controversial in its nature. However, the main purpose of money implementation was the establishment of a mutually beneficial and profitable relationship between people with distinct professions and occupations, and this purpose became efficiently fulfilled.
Money became a measure of all things, and now it “makes goods commensurate and equates them” (Aristotle 2). The products became paid according to demand, and the trade relations became more convenient and justified with it. Nevertheless, money failed to support the idea of socioeconomic equality because of its misuse. The overuse of money always was an issue in every society. According to Aristotle’s perspective of just distribution, the excess and defect are the characteristics of injustice that are opposite to proportion. “To have too little is to be unjustly treated; to have too much is to act unjustly” (Aristotle 3). It is fair to say that the conception of money is closely interrelated with ethics and morality. And up to now, the ideal view of the proportionate distribution of the financial wealth didn’t prove to be practical or realistic.
Social Conventions and Standards
The forms of money varied in dependence on the culture and time. It considered that money started obtaining its conventional form in the first millennium B.C. At the beginning of monetary history, there were coins made of different kinds of metals and alloys. During the time, the official institutions that produced money and were controlled by governments started to appear, and the standards of money production were elaborated to avoid the forgery.
The mint standards were adopted by the governments at the beginning of the second millennium, and those who attempted to counterfeit coins were persecuted and punished. In the 13th century in England money was made of silver, copper, and gold. At those times, the most common methods of the coins authenticity verification were “distinguishing them by the eye or trying them by assay” (Oresme 1). However, there were numerous varieties of alloys and metals, and the cases of forgery thus were frequent. For decreasing the fraud emergence the strict regulations and standardization were required. Therefore, the conventional form of coins and imprints were elaborated. The authenticity of money could also be tested by weight – twenty-four grains were equal to a pennyweight.
The lack of consistency in the money issue caused the emergence of many challenges of a political character. The coins standardization allowed the government to establish a more structured economic system and increase the social control by the adoption of the punishment policies controlling the law violations.
Since the 13th century, money has evolved both in form and qualities. It passed through the stages of notes and bills of exchange and ultimately transformed into paper money. With the appearance of the paper banknotes, money became more liquid and allowed greater commercial and financial freedom. These changes also were followed by the transformation in the legal policies and regulations because the high level of liquidity made the government’s economic state insecure. The illegal economic activities also put at risk social stability by violating the idea of proportional and equal distribution. When money evolved, and the international exchange became available, the links between the social and economic issues became even more evident.
Money in the Modern Society
One of the most prominent problems of socioeconomic character is unemployment. This issue indicates the inefficiency of the current economic policies on a global scale. For centuries, economists dispute the origins of and the reasons for the issues of economic inequality and unemployment. Some of them blame the excessive consumption, and others see the reasons for it in “the evil of thrift” (Keynes 1).
Some theoreticians believe that when money is saved by individuals or states, it causes the stagnancy in the money circulation and provokes the economic decline. In the 16th and 17th centuries, “real income was believed to diminish by the amount of money which did not enter into exchange” (Keynes 1). Comparatively a few supporters of this theory claimed that wastefulness is a human vice but it stimulates the economy, and, on the contrary, the exceeding saving jeopardizes trade relations and economic development.
To some extent, the theory of the “insufficiency of the propensity to consume” was proved in the 20th century, when technological innovations boosted economic growth (Keynes 1). The international trade development and the increased number of industries caused the rise of consumption and demand for products and services. The newly emerged large companies recruited a lot of employees. Mass consumption was widely promoted and strived. However, the rates of unemployment and poverty remain high. It means that even the development of new markets and industries and the high level of spending cannot provide the efficient distribution of wealth and a sufficient number of workplaces. These facts demonstrate that the solution is not in the increase of consumption or the severe retrenchments but in the rational attitude toward money.
Conclusion
From antiquity to the present day’s money has passed through the variety of the transformations. The main idea that lies in the foundation for the concept of money is the possibility of equal and just wealth distribution among the members of society. The money allowed the introduction of sound, convenient, and well-controlled commercial and trade relations both within the country and cross-borders. When money acquired the qualities of greater mobility and liquidity, the regulations and the legal control of the financial circulation inevitably took place. However, the cases of financial crimes, though less than before, still take place. These issues jeopardize political, economic, and social security. The more social issues of economic inequality, poverty, and unemployment prove the failure of the economic policies, and in addition to this, the incidents of the money misuse also can be regarded as the manifestation of the unhealthy and unethical attitude towards money.
Works Cited
Aristotle. Nichomachean Ethics, Book V, sec. 5, 350 B.C.E.
Oresme, Nicholas. A Treatise on the New Money, 1280.
Keynes, John Maynard. The General Theory of Employment, Interest and Money, 1936.