Wednesday, March 08, 2006

The Contractual Nature of the Medium of Exchange.

Money can actually more aptly be described as a medium of exchange. By this description it can be seen that money facilitates the exchanges that take place in human life. It is by this indirect method that people can get what they want, and they can sell what they have to offer, without worrying about matching commodities. It is an advancement over barter.

Historically the commodities that were recognized to have value universally and that were easy to transfer to others, these were the commodities that served as mediums of exchange. The tendency towards having a universal medium of exchange narrowed the field to one or a very few commodities.

A medium of exchange represents a contract. The medium of exchange has value inasmuch as the contract is honored. Ever since its beginnings the best of the mediums of exchange were measurable and verifiable.

The justice on which the divine economy model is based assumes trustworthiness. Laws need to be strengthened to protect the contractual nature of the medium of exchange.

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