chapter  6
The origin of money and the most marketable good
Pages 14

Introduction Possibly one of the relatively less well-known approaches to the origin of money is the one which implies that money originated from the most marketable goods. This view equally presupposes a division between a moneyless economy and a monetary economy. A moneyless economy is distinguished by having some distinctive characteristics from that of a monetary economy. The most distinctive trait of such an economy is evidently the absence of money. These early moneyless economies also share other characteristics that are considered to be the building blocks of any economy devoid of money. These economies are considered to be self-sufficient. By that it means the entire production is directed towards self-consumption. It follows from this premise that in such a state of affairs there would not be any surplus product. The further point of difference is that whatever is being produced is shared between the members of the selfsufficient family units or the self-sufficient communities. So these economic units would also lack the institution of private property ownership. All these characteristics are caused by and are the inevitable consequence of the inadequate development of the division of labour and specialization of employment. We can detect two types of exchange: the exchange that is relevant to moneyless economies and exchange that characterizes a money-using economy. This is the type of classification of exchange that we find in Menger’s work on money. In a moneyless economy the exchange is in order of one use value being exchanged for another use value. In this sense every use value stands in exchange for every other use value in an economy. As long as this order dominates the economy would operate with no money. In the next stage of development of exchange a few use values would be selected and the rest of other use values are exchanged against them. Eventually one use value among the selected use values would emerge victorious and stands as generally accepted medium of exchange. It is at this stage that the primitive moneyless economy would be replaced with more advanced money-using economic structure. All three terms, greater marketability, greater liquidity and greater saleability, describe the same attribute of money. They can be used interchangeably. Menger tends to use marketability and saleability more often than the term liquidity.