Re: Theories of Money

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

On Sat, Aug 12, 2006 at 09:54:53AM -0400, Jayson Funke wrote:
>
> How can money be a "universal" store of value and unit of exchange?

Here is my overly hasty take on your question.
Money is not quite a universal store of value in the sense that it does the same
thing around the world, unless you believe that the same work done in China and the
United States has different values.
Price systems differ from country to country.  They did so under the gold standard.
They would do so under a universal dollar standard.
Under a gold standard, an ounce of gold would be worth an ounce of gold wherever you
go.  In that sense, it would be a universal store of value.
What the market does is to create a uniformity of exchange of values, which are
represented by prices.  If prices do not equal values but are perturbed by forces,
such as monopoly or the tendency of rates of profit to even out.
So, within a highly monetized domestic economy money does represent a store of value,
but until the world becomes more commercially integrated I am not sure that you could
make that assertion.
In short, I think that the causation goes from what you called the McDonaldization
(that is, an integration of the world economy) to a monetary form that would be a
universal store of value.


>
> I am asking this because I am trying to determine if the globalization
> of the US dollar can be argued to also be a process of social and
> cultural homogenization - (but not in the most commonly cited way
> through the cultural McDonaldsization of the world), but rather more
> subtly as the imposition of the value system underlying the dollar on
> the rest of the world?
>
> If, as I suspect, money in its various guises, developed at local
> (perhaps regional) levels among people with shared common values, then
> money is only capable of acting as a true store of value and unit of
> exchange among people with the same social values (or else, how does
> money reflect the differences in values of different societies?). In
> other words, does money necessitate that those who use it must
> necessarily share the same social measures of value?
>
>
> Jayson Funke
>
> Graduate School of Geography
> Clark University
> 950 Main Street
> Worcester, MA 01610

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
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