The origin of money

Humans exchange goods and services in order to satisfy their wants. We always trade something we posses for something we desire more. Exchange is therefore a trade of less urgent needs for more urgent and important. Every exchange involves acquisition and payment. We always try to increase value for themselves while miniming it's cost. Creation of value requires expenditure in terms of other value. Creation of any good, service and commodity takes sacrifice of time, energy and effort. Nothing is for free. Therefore the desired end of any exchange is acquisition of goods. The means for exchange are other good. Money serves only as intermediary medium and temporary store of value. Money allows to preserve time and energy necessary for production of a good before it is consumed. In order to increase productivity, save costs, energy and time, people also need to divide between themselves their labor and physical efforts, so that everyone can concentrate his work on something he creates most effectively and efficiently. That way everyone can produce more goods and services and share them with their partners and collaborators. Such division of labor and trade requires common medium of facilitating exchange. Money also help to perform calculation of value. As value we impute on goods is subjective, we always rank satisfaction of our desires they convey in relative or marginal and orderly terms. Money is such universal unit of account that allows expression of ordinary numbers and subjective values in cardinal or absolute terms.

Money emerged spontaneously as the most marketable or saleable commodity with highest and stable marginal or relative value. These feature qualify this commodity as common unit of account, medium of exchange and store of value whose purchasing power or exchange value against other goods and services is most stable.

As with all inventions, emergence of money was not sanctioned by legislative act of the state. Money appeared naturally due to certain economic relationships independent from the power of the state.