Definition of Money
Money is defined by the different economists in different ways. Some definitions are too extensive while others are too narrow. While economists like Prof. Walker have defined it in terms of its functions, other like Robertson and Seligman have laid emphasis on its basis characteristic, namely, general acceptability.
According to Prof. Walker, “Money is what money does,” that is to say, whatever serve the purpose of money important than of its concreter as money. According to this view, functions of money are more important than that of its concrete form. This definition is not very satisfactory because money performs many functions which are also performed by other commodities, so that from this point of view separating of money becomes extremely difficult.
According to D.H. Robertson, money is “anything which is widely accepted in payment for goods or in discharge of other kinds of business obligations.” G.D.H. Cole has defined money as “anything that is habitually and widely used as a means of payment and is generally acceptable in the settlement of debts.” According to Kent, money is “anything which is commonly used and generally acceptable as a medium of exchange or as a standard of value, “Seligman has defined money as “one thing that possesses general acceptability.”
These definitions are too narrow. These lay emphasis only on one or the other function of money. The definitions given by Robertson and Seligman lay stress on general acceptability. In the same way, the definition given by Cole lays stress on the stranded for deferred payments while Kent emphasizes two functions of money, viz., medium of exchange and stranded of value.
Thus, we arrive at the conclusion that all these definitions are incomplete and unsatisfactory.
A suitable definition of money must emphasise not only the important functions of money but also its basis characteristic, namely, general acceptability. Looking from this criterion, we find that Crothers’s definition is the most suitable one.
He defines money as “anything that is generally acceptable as a means of exchange (i.e., as a means of settling debts) and that at the same time, acts as a measure and as a store of value.”
This definition covers all the three important functions of money and also stresses its basic characteristic namely, general acceptability.
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