NationMaster - Encyclopedia: Representative money

Representative money refers to money that consists of a token or certificate that can be exchanged for a fixed quantity of a commodity such as gold, silver or potentially water, oil or food. This is to be distinguished from commodity money which is actually made of that real physical commodity. Money Money is any marketable good or token used by a society as a store of value, a medium of exchange, and a unit of account. ... Jump to: navigation, search General Name, Symbol, Number gold, Au, 79 Chemical series transition metals Group, Period, Block 11, 6, d Appearance metallic yellow Atomic mass 196. ... Jump to: navigation, search General Name, Symbol, Number silver, Ag, 47 Chemical series transition metals Group, Period, Block 11, 5, d Appearance lustrous white metal Atomic mass 107. ... Jump to: navigation, search Water (from the Old English word wÃ¦ter; c. ... Oil is a generic term for organic liquids that are not miscible with water. ... Commodity money refers to money whose value comes from a commodity out of which it is made. ...

Representative money is widely believed to have originated in ancient Sumeria where small baked clay tokens in the shape of sheep or goats were used to replace barter in trade. Over time, they were sealed in clay vessels which contained a certain number and had that number written on the outside - but it was only possible to verify the number of tokens inside by shaking the vessel and guessing, or by breaking it. At which point, the number written on the outside originally became subject to doubt. Apparently, however, this system was good enough to have discouraged much counterfeiting - penalties for "short-sheeping" or selling the same goat twice were quite severe, and often such activities in ancient societies were thought to offend one or more gods. Sumer (or Shumer, Sumeria, Shinar, native ki-en-gir) formed the southern part of Mesopotamia from the time of settlement by the Sumerians until the time of Babylonia. ... Barter is a form of trade where goods or services are exchanged for a certain amount of other goods or services, i. ... A counterfeit is an imitation that is made with the intent to deceptively represent its content or origins. ...

A key feature of representative money is that its value is very directly perceived by the users of this money, who recognize the utility or appeal of the tokens as they would recognize the goods themselves. That is, the effect of holding a token for a barrel of oil must be (to the holder) the same both emotionally and economically as actually having the barrel at hand. This thinking guides the modern commodity markets, although they use screens full of software-based tokens and a sophisticated range of financial instruments that are more than one-to-one representations of units of a given type of commodity. They still, however, guarantee the moving a certain amount of a commodity to, or on behalf of, the owner. This is usually only to a well-known point of delivery. Chicago Board of Trade Commodity market Commodity markets are markets where raw or primary products are exchanged. ... Financial instruments package financial capital in readily tradeable forms - they do not exist outside the context of the financial markets. ...

A gold standard dollar bill. Note the words "Will Pay to the Bearer on Demand", which were removed when the dollar was floated.

In the late 19th and early 20th century most currencies were examples of representative money in that they were based on the gold standard in which a currency could be exchanged for a fixed amount of gold, at least in theory. In fact, in many countries, such exchange was discouraged, difficult and likely almost impossible except for a few with access to the commodity markets in major capital cities, or in some cases, any but those in government or with proven foreign exchange needs that were supported by the government. This is a file from the Wikimedia Commons, a repository of free content hosted by the Wikimedia Foundation. ... This is a file from the Wikimedia Commons, a repository of free content hosted by the Wikimedia Foundation. ... 1922 U.S. gold certificate The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold and currency issuers guarantee, under specified rules, to redeem notes in that amount of gold. ... Chicago Board of Trade Commodity market Commodity markets are markets where raw or primary products are exchanged. ... In politics a capital (also called capital city or political capital â€” although the latter phrase has an alternative meaning based on an alternative meaning of capital) is the principal city or town associated with its government. ... Foreign exchange has several meanings: In telecommunications, Foreign exchange service is a type of network service. ...

For example, the United States claimed to have representative money from the U.S. Civil War (when "greenbacks" were first issued) to 1970 when the gold standard was officially abandoned. But U.S. citizens were barred from trading directly in gold, and thus could not go to Fort Knox and redeem their dollars for gold. Such tactics were typical, and characterize the long shift from commodity money to representative money to fiat money. The American Civil War was fought in the United States from 1861 until 1865 between the northern states, popularly referred to as the U.S., the Union, the North, or the Yankees; and the seceding southern states, commonly referred to as the Confederate States of America, the CSA, the Confederacy... Jump to: navigation, search 1970 was a common year starting on Thursday. ... 1922 U.S. gold certificate The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold and currency issuers guarantee, under specified rules, to redeem notes in that amount of gold. ... There is also a Fort Knox in the state of Maine, across the Penobscot River from Bucksport. ... Commodity money refers to money whose value comes from a commodity out of which it is made. ... Fiat money or fiat currency, is money such as paper money, that is current or legal tender as satisfaction for money debts by government fiat, that is by artificial law. ...

More recently, some Green economists have suggested a form of money based on ecological yield. As natural capital yields nature's services, investing in it via environmental finance would give one the right to receive the yield as benefit. This is in effect an abstraction of owning land that makes it economically irrational to damage it. The global ecology movement is one of several new social movements that emerged at the end of the sixties, its growth has been stimulated by the widespread acknolagement of the ecological crisis of our planet. ... Jump to: navigation, search This is an alphabetical list of well-known economists. ... Natural capital refers to the mineral, plant, and animal formations of the Earths biosphere when viewed as a means of production of oxygen, water filter, erosion preventer, or provider of other natural services. ... Natures services is an umbrella term for the ways in which nature benefits humans, particularly those benefits that can be measured in economic terms. ... The field of environmental finance, part of both environmental economics and the conservation movement, exploits various financial instruments (most notably land trusts) to protect biodiversity. ...

Other proposals, such as time-based money, reflect a modern service economy, and rely on the availability of human labour within a community, or free time as a standard, as suggested by Amartya Sen in Development as Freedom. These are forms of representative money that give the holder the right to have work done on their behalf, or be left alone to do as they like, possibly with physical capital that is owned by the community. The complex relationship between access to commodities, labour, play, well-being and "the right to live as we would like" renders it more likely that future representative money will have something to do with our human life time in some way, as, this is the only thing that is absolutely irreplaceable in our experience. Michael Benedikt has proposed a theory of value along these lines. In economics, a time-based currency is a currency where the unit of exchange is the hour. ... Service economy can refer to one or both of two recent economic developments. ... In classical economics and all micro-economics labour is one of four factors of production, the others being land, capital and enterprise. ... There is also an album by Blur called Leisure. ... Amartya Sen Amartya Kumar Sen (born November 3, 1933) is an Indian Economist best known for his work on famine, human development theory, welfare economics, and the underlying mechanisms of poverty. ... Development as Freedom is a book written by Amartya Sen. ... In general physical capital refers to any non-human asset made by humans and then used in production. ... The well-being or quality of life of a population is an important concern in economics and political science. ... See also Cost-of-production theory of value Marginal theory of value Labor theory of value Categories: Stub ...