Characteristics of Sound Money According to Aristotle
You need some form of money to buy products and services or to settle financial obligations. Money serves three basic functions – it works as a means of commerce, a unit of account, and a store of value. Some people use it regularly, while others invest it in gold and silver investment companies for future incidents.
Aristotle’s Views on Money
Aristotle was a Greek philosopher who learned from Plato and later taught Alexander the Great. His work includes the discovery, formulation, and analysis of the problem of “commensurability,” or the difficulty of measuring dissimilar quantities using the same scale.
He figured out the best way to determine proportions for a trade of various commodities. He looked for an underlying principle that can permit comparing things that appear to be radically different from one another at first glance.
Aristotle discovered that by using money as a standard unit of account. It is feasible to compare and even out disparities between various entities. He argued that when a substance takes the form of money, it becomes a purpose.
He further argued that by inventing money, humans had established a standard of value by which all transactions could be made fairly and equitably. Therefore, according to Aristotle, everything can be defined in terms of money because it was developed to meet the need for equivalence in all forms of transaction. It can be used or saved in precious metals IRA accounts.
Characteristics of Sound Money
From this perspective, Aristotle outlined the qualities of a good currency, which include:
- Money must be resilient, meaning it can withstand normal wear and tear and extreme conditions. Nothing about it should degrade, corrupt, corrode, or alter over time.
- Money should be lightweight and large enough to hold a significant amount of value.
- Money should be relatively easy to separate and re-combine without changing its core qualities. The principle is expanded upon by the requirement that the thing is fungible.
- The value of money should come from within, not from outside factors like supply and demand.
There are numerous reasons why the other choices raise more doubts about currency. Since a firm will eventually fail, it cannot be used as a kind of currency. However, it might be possible to split it up into individual shares of stock. It is valuable in and of itself since it can be used to generate income. However, as a business can’t endure forever, it can’t be termed money and hence fails the “durable” test.
Alternatives include exchange-traded funds (ETFs). All the things involved are valuable; however, their practicality as money is in question. Certainly, they can be converted to dollars or other fiat currencies for use in purchasing goods and services. Yet the underlying assets breach issues of longevity and mobility. Even though these mechanisms effectively preserve wealth, they are entire as reliable as money in the Aristotelian sense.
Fiat paper currencies are helpful for spreading wealth and stabilizing economies. But the fourth and most crucial premise of Aristotle, the idea of intrinsic worth, is one that fiat currencies fail to meet in a spectacular fashion. All fiat currencies are completely dependent on the good faith of their issuer and have no value of their own. Time and again, history shows that the quantity of such currencies has increased rather than decreased. Therefore, no fiat currency has ever survived for more than a couple hundred years at the most.
French attempts at fiat currency have been equally dismal. The new paper currency quickly became oversupplied, prompting a renewed demand for coins.
Final Word
Aristotle had quite an innovative view of money, which is arguable and debatable. While many people can argue it is best to prepare for the declining future and reserve your money in the form of precious metals exchange companies. Contact Orion Metal Exchange, an exceptional gold and silver investment company, for further assistance.
