Abstract

The received view defines money by four basic functions: unit of account, store of value, a medium of exchange, and standard of deferred payment. The two main grand views on the nature of money regard either its function as a unit of account (chartalism), or its function as a general medium of exchange (metallism) as the fundamental characteristic of money and try to derive the other functions of money from the proposed fundamental characteristic. Both chartalism and metallism fail to see, however, that all four accepted functions of money are rather necessary expressions of the nature of money and not elements of its definition. My thesis is that all four basic functions of money can be explained by regarding money as an instrument for measuring an extensive magnitude of things and poietic actions that is called commonly ‘value’. However, value is not a fundamental magnitude, but is in a certain way the representation of human freedom in the material world. Thus money is in fact an indirect instrument for determining and measuring at least an aspect of human freedom. From this definition of the nature of money also the obligation for the institution of a conditionally guaranteed minimal income can be defended.