Articles or books on the different functions of money

May 1, 2019 4:22 AM

I keep seeing articles that mention that money serves different functions (e.g., a medium of exchange, a store of value, a means of determining ownership of assets, etc). But it's always in passing and they never really dig into it. Are there articles or books that discuss how these different functions interact and how those functions don't always work well together?

For example, if I save money (store of value) I can spend it later (medium of exchange). But in an economy experiencing deflation that dual role becomes a problem because the incentive structure for saving vs spending is out of balance. It seems this sort of thing is taken for granted but I'd like to read something that explicitly discusses how these roles interact.

posted by Tehhund to Work & Money (12 answers total)

This is the stuff of Econ 101. A textbook might get at what you’re looking for.
posted by jon1270 at 4:46 AM on May 1, 2019

This may be a bit too law-focused for your needs, but the first couple of chapters of this book provide a pretty accessible summary of the economic and legal functions of money. The footnotes might then be a good starting point for more economic analysis.
posted by Aravis76 at 5:07 AM on May 1, 2019

Typically college level courses explicitly ignore the role of money in the productive economy and treat it as pure numeraire, especially introductory microeconomics.

An empirical, classic, low level treatment would be "The Money Market on Lombard Street," by Bagehot.
posted by PMdixon at 5:07 AM on May 1, 2019

The book "The Panic of 1907," helps introduce these concepts by discussing how money worked in the before times and why it didn't really work and how the federal reserve system helps to smooth things over. It's also an interesting and entertaining story about the "masters of the universe" of that era and how different robber barons saw their responsibilities differently.
posted by wierdo at 5:51 AM on May 1, 2019

I've just finished reading the very book you need : Tim Harford's The Undercover Economist Strikes Back.

It's a book for the general reader (i.e. not academic or for specialists), and devotes some time - as well as other topics - discussing the different functions of money, with illustrations from different countries and different historical periods about how one or more can go wrong, and be put right in different ways.
posted by vincebowdren at 8:45 AM on May 1, 2019

You want to read David Graeber's book Debt, which goes deep into the social functions of money and other means of exchange.
posted by suelac at 10:41 AM on May 1, 2019

Seconding Graeber's Debt, though it covers a lot. A lot of fascinating stuff, worth reading, but a lot. A more conventional (if less insightful) view can be found in Niall Ferguson's The Ascent of Money. Both approach money from a historical viewpoint, which can clarify some of your questions, though I don't know that either one answers them exactly.
posted by clawsoon at 12:47 PM on May 1, 2019

I haven't read Naked Money, but did read Naked Economics for Econ 101. Assuming the author used a similar approach, I think parts of Naked Money might cover what you're looking for.
posted by yeahlikethat at 4:37 PM on May 1, 2019

The economics book that I always recommend on Metafilter has a chapter on this topic, as I recall. It's not the entire focus of the book, but would be a good starting place, and has a bibliography of recommendations for further reading. The book is "Economics For Everyone" and it also has a web site that goes along with it, but I am on my phone right now so linking is inconvenient (apologies).
posted by eviemath at 11:21 PM on May 1, 2019

Nthing Graeber's Debt: The First 5,000 Years. It's big and in-depth, but is more of an anthropological study than an economics text, so you won't get bogged down in charts, graphs and formulas. It's a big book, but a surprisingly easy read, IMO. It forever changed my understand of debt, money and economics.
posted by asnider at 2:57 PM on May 2, 2019

I've now read most of vincebowdren's suggestion, and I can confirm that it spends a fair amount of time on the conflicts that arise between the different roles of money, using lots of vivid examples.
posted by clawsoon at 4:08 PM on May 2, 2019

Glad it helped you clawsoon!
posted by vincebowdren at 6:25 AM on May 7, 2019