The Function Of Money

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s a measurement of value. This function is then expressed directly in commodity money. For example, gold is used to acquire another commodity based on its value. The use of this function depends on social aspects, as this determines the suitability of a commodity as commodity money. The state is however responsible for creating a standard of price. With a standard of unit of money, a commodities value is divided by money to create an accounting system of price. Marx saw the standard of price as a standard splitting up of money. The accountings system to him even if conceptual has social aspects taken into consideration in getting the value of commodities, which is not connected to the outcome of the standard of price. He also saw unsure ness in getting quantities of units of money changed into prices.
It is difficult to see if Marx felt money possessed value to enable it to measure the value of commodities and to set prices. This is as it brings the question of something else is being used for the accounting system of prices. However money does not have effect on the profits made by capitalists, through the reallocation of surplus value in a capitalist economy. Therefore it is acceptable to use units of commodity money without such value for accounting.


Money as a means of exchange or purchase is the only function of money seen even in the past traditional economies and is done in simple market processes. In this function, money acts as a sort of middleman for the exchange of commodities. Marx formula for simple commodity exchange, in which currency is produced by the state is, a commodity (C1) is exchanged for money (M), which is then exchanged for another commodity (C2), the sell purchase (C1-M-C2).
In this process of exchange the currency is always in circulation g, going from market transaction to market transaction, unlike the commodities that are bought and sold, as they enter and leave the market. ‘Money velocity is an ...