In short, money is the thing that all other goods and services are traded for. This fundamental characteristic of money must be contrasted with other goods. For instance food supplies the necessary energy to human beings. Capital goods permit the expansion of the infrastructure that in turn will permit the production of a larger quantity of goods and services. Contrary to the mainstream thinking then, the essence of money has nothing to do with financial deregulation, as the essence of money will remain intact in the most deregulated of markets.
Some commentators maintain that money s main function is to fulfill the role of a means of savings.
Others argue that its main role is to provide services of a unit of account and to function as a store of value. Whilst all these roles are important they are not fundamental. The fundamental role the essence of money, is that of a general medium of exchange. It is because of this that all other functions can emerge. Namely, the fact that an entity becomes the medium of exchange gives rise to it s other functions like the unit of account, the store of value and means of savings.