chapter  48
8 Pages


The economic concept of payment is presupposed in the phrase, means of payment by credit. In attempting to define this concept, so important to an understanding of the institution of money, we shall assume an undeveloped economic condition where there are no credit media and the only means of payment is ready cash. At first we shall also assume for the sake of simplicity that we are dealing with a static economy which obtains the same social income year in and year out through a frictionless, undisturbed process of production and acquisition and which distributes this income to its members by similarly frictionless sales. We shall first examine the effects on the institution of money resulting from change, friction and disturbances in production, acquisition and the market. We shall then pass to changes in the value of money.