On the Nature of Money

The topic of the nature or essence of money has produced an abundant literature that has failed to come to a uniform conclusion. Regardless of the evolution of money, some passages by AristotleAristotle shed light on the meaning and nature of it. This chapter looks into them. The first section presents Aristotle’sAristotle thoughts on money, while the second section analyzes money as a unit of measurement, and the third section deals with its conventional nature. The fourth section draws on two theories of signs to explain the nature of money as a sign, before offering a conclusion in the end. Building on Aristotle’sAristotle ideas, the chapter distinguishes three levels of understanding money: (1) universal money or moneyness; (2) money as instantiated in particular currencies with nominal face values (money of account) that measure this potential purchasing value; and (3) currency in exercise that actualizes money/currency potentialities through specific prices, signs of exchange values, and needs/wants. The fact that the nominal face value of money means potential purchasing value shows that this value can actually change when exercised. Currencies are performative signs, in the sense that they have a potentiality or purchasing power.