Money as the Ability and Some Related Issues

The chapter addresses some relevant issues before progressing to analyse inflation. Firstly, the relationship between purchasing power and the ability to obtain is analysed. Purchasing power is useful in a situation characterised by the acts of buying and selling, i.e. in a market. However, ability is a superior concept and applicable to all human transactions. Secondly, the issue of money creation, destruction, and transfer is addressed. It has been noted that money in no form is always transferable. Money creation and destruction depend on the context and transferability of ability. Thirdly, the universality of money is discussed, and it is noted that money is universal as human beings have always and will always transact with each other. However, its form depends on social and individual idiosyncrasies. Lastly, it is noted that money has many names, and is called using different names in different contexts. But the names should not confuse us, as whatever is called, whatever form it takes—the ability to obtain goods and services from others is money.