We sell our products and services for money, and then use it to buy the products and services of others. Money also permits us to comparison shop. Since all goods are traded for money, every item in the market has its own money price. Consumers and producers are easily able to evaluate the relative money costs of consumer goods as well as the resources with which these goods are manufactured. This allows an efficient and economical use of the resources and commodities in society.
Money also enables an efficient transfer of resources between savers and investors.
This process has been the basis upon which entrepreneurs and businessmen have been able to invest in the plant equipment and new and improved machinery that has given us our high standard of living. Finally, money tends to keep people honest. If I want to buy what others have for sale, I must have money to do so. But, ultimately, the only way I can acquire money in a free-market economy is if I have earned it by producing something for which other people are willing to pay me. Thus, my ability to obtain what others have produced is dependent upon first having produced something which others wish to buy from me.