It's no secret that money, in fact, is a means of selling their value in the process of circulation of goods. This means that the starting and at the same time key function in the system of monetary relations is the function of a measure of value. What does it consist of? What are its main features? Is this topic relevant today?
The defining aspect of a measure of value
A measure of value is the most important function of money, which allows you to qualitatively change and correctly express the value of an object in monetary terms. So, a particular thing is assigned a price form. The influence of this function does not depend on the government bodies of any country. The price scale is an expression of the value of the object and is exclusively legal in nature.
The function of money as a measure of value has a very interesting feature, which consists in its ability to correctly measure labor costs, to recombine a certain share of national income (for example, in the event of price mismatch), as well as correctly evaluate goods through a pricing system.
Price, measure of value and their main features
Like any other function of money, a measure of value is endowed with specific and nonspecific features. First, only full-fledged money can perform this function, and price serves as a form of recognition of money as a measure of value. Thus, in the case of balancing the goods and a certain amount of money, you can change the value in a quantitative way. Secondly, a measure of value is a function that allows you to fully carry out planning and accounting, perform distribution operations on a public product, and also calculate aspects of production costs. Thanks to it, today it’s easy to maintain quality relations between various economic entities (for example, enterprises and employees, enterprises and intermediaries, or two enterprises of a similar orientation in terms of production and sales of products).
Money measure function
Relying on the information presented in previous chapters, we can give a detailed and most accurate definition of the concept under consideration. Thus, a measure of value is the economic function of money, the activity of which is in no way connected with the state. The price scale is endowed with a legal character and expresses nothing but the price of the goods. For a competent determination of the value of fixed assets, the least measure is the simultaneous implementation of the following conditions:
- Absolute equality in terms of pricing relative to the common economic space.
- A decent degree of development of categories such as market relations and competition.
- The relative stability of the national currency.
- Equivalence in terms of exchange.
Pages of history
A measure of value is a category in the study of which the main focus is on gold. Indeed, the key function of the metal is to fully ensure the monetary determination of the price of goods, to make them comparable with each other both in qualitative and quantitative terms. Over time, society preferred to abandon gold, thereby transferring the function considered in the article to the more convenient equivalent, money. Thanks to this, an easy-to-use circulation system has been formed.
It is important to note that today absolutely every country has an individually established measure of value (this aspect is called price scaling and is discussed below). For example, in the USA, the national currency (US dollar) is used as a measure of value, in Mexico - the peso, in Japan - the yen, in Russia - the ruble and so on.
Basics of the formation of a measure of value
As it turned out, today, with the help of national monetary units, it is possible to measure the value of absolutely all objects (see above: a measure of value is …). This is how the most important ability of money is manifested - to act as a measure of value and as an intermediary in the process of determining it. Nobody knew about paper money before - ordinary goods served as their replacement. This ensured the appearance of an equivalent price for the monetary units of the goods (of course, taking into account certain laws of value) in a single way. In addition, both the objects of the transaction (specific things) and money had a common basis for comparison, which was labor (it should be noted that this concept is abstract in nature). Therefore, through the function of the measure of value, the goods can be attributed to money in the same way as to the general equivalent. To solve this issue, it is important to correctly determine the scale of prices.
Price scale concept
The scale of prices is nothing but the object of determining the value of a commodity in money. This concept consists in strictly fixing the weight ratio of gold (as a monetary metal) to the domestic currency (called the national currency) in a particular country. At a time when commodity production was actively practiced, banknotes could be exchanged in various markets (both within a certain state and in the international arena). Naturally, in the process of transition to a currency of non-monetary nature, this function was leveled: credit funds can perform an exclusively representative function, that is, serve as a means of account.
Inflation and Cost Measure
It should be noted that the measure of the value of the goods is a component of the most important system, of which inflation is also considered a part (it plays a decisive role in the process of cheapening money). A vivid example of this phenomenon can serve as prices for travel in public transport. Let's say you have 100 rubles. In fact, nothing changes in the nominal plan, but a real examination of the situation reveals that last year it was possible to buy 10 coupons for travel for the money, and in the current one only 8 or 7.
History recalls that in the 1990s, hyperinflation took place in Russia. Then the money was subject to depreciation at a frantic rate. Even students at that time tried to spend their own scholarship as quickly as possible, because during the month period this amount could easily lose a significant part of it. But after 1998 in the country, inflation of approximately 20% can be observed annually, and the 2008-2009 crisis gave an impetus to stabilize inflation at the level of 7-8 percent.
