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Aristotle on Money

Posted by packy @ 17:52 on September 26, 2015  

Aristotle, in the 4th century B.C., recognized that a good money has five characteristics: it’s

durable (which is why wheat isn’t good money),

divisible (why diamonds aren’t good money),

convenient (so much for lead),

consistent (why real estate doesn’t work), and is

useful in itself (which is why paper doesn’t make the cut).
Gold succeeds on all counts
plus there is

Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution. Examples of highly fungible commodities are crude oil, wheat, orange juice, precious metals, and currencies.

Fungibility has nothing to do with the ability to exchange one commodity for another different commodity. It refers only to the ease of exchanging one unit of a commodity with another unit of the same commodity.


Liquidity. A good is liquid and tradable if it can be easily exchanged for other money or another different good. A good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place.


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Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.