Revised November 14, 2013
The symbol called money was invented and put into use in order to simplify and standardize exchange value. The money symbol also led to the simplification and standardization of the economic system. It became apparent that when the supply of money units was held constant the economic system became very stable and prosperity increased.
This money symbol is usually printed and coined by governments. Paper is the most common form of material used for the printed money. Metal is the most common form of material used for coining money coins. Money is a symbol that can be carried and counted conveniently. The money symbol not only simplifies the complex problem of defining exchange value of products and services in terms of each other, it standardizes economic systems.
The money symbol is nothing more than paper and metal until a universal agreement is made by the Producers to have this paper and metal represent the exchange value that production by mankind has created. This agreement is made and maintained every time each one of us uses this symbol when exchanging it for commodities, trades, goods or services. The Producers have created this agreement. They create the commodities, trades. goods and services and thus agree to use the money symbol to represent the value present in the commodities, trades, goods and services they have created. When this agreement is made, we can say the person who created the commodities, trades, goods and services also creates the exchange value and production value which money represents. Without a product, exchange value and production value do not exist.
The person who created the product which has the exchange value has in effect created the money that represents the exchange value. The person who created the production has also created the agreed upon reality of: The money symbol represents the value of the commodities, trades, goods and services he has created. Money without exchange value is not money at all but a piece of paper or a piece of metal.
The Producer is the initial creator, of the reality, of a money symbol representing exchange value for commodities, trades, goods and services marketed on the Open Market. The non-producer and counter-producer came along later with their out-exchange ways to take money without an exchange for it.
Let’s look at exchange value expressed in money units. We will start by having one dozen eggs equal to two (2) money units in exchange value. We will have one gallon of milk equal to four (4) money units in exchange value. One coat could have an exchange value of two hundred (200) money units in exchange value. One computer could have an exchange value of one thousand (1000) money units and one car has the exchange value of thirty thousand (30,000) money units. As can be seen, this is a system where all products created by mankind are now having their exchange values defined in terms of money units, a medium of exchange, instead of in terms of each other. This has made a much more refined and efficient system in dealing with exchanging products that one produces for products that others have produced.
