Money of Account(redirected from Unit of account)
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Money of Account
(accounting money), the denomination of a country’s monetary units—for example, dollars, pounds, marks, and rubles—which serves as the form society accepts for expressing ideally such phenomena as the prices of goods and services, the values of debts, and securities prices. The ideal existence of money of account rests on its inner link with the mass of real money and with commodity circulation. Money of account is directly related to money’s function as a measure of value and yardstick of prices.
Originally, a country’s monetary unit was the name given to a certain amount (by weight) of a precious metal; in England, for example, the pound sterling was a pound of silver. With the transition to developed coinage circulation, the denominations of the monetary units and the monetary units’ metal content came to diverge—the result of wear and debasement of coins. Certain quantities of gold and silver were “clothed” in “national uniforms”—credit money (banknotes) and paper money. Thus, money of account acquired a functional autonomy and a relative independence.
With developed commodity production, the value of commodities does not find its monetary expression directly in the use value of the universal equivalent (gold) but in ideal monetary units, that is, in money of account, behind which stands a specific quantity of specie. “Money as the measure of value,” wrote Marx, “is not expressed in amounts of bullion, but rather in accounting money, arbitrary names for fractional parts of a specific quantity of the money substance” (K. Marx and F. Engels, Soch., 2nd ed., vol. 46, part 2, pp. 304–305). Marx criticized the treatment of money of account by the bourgeois economists, who denied any internal connection between money of account and the real money material, instead identifying money of account with the physical dimensions of weight and length (ibid., vol. 13, pp. 63–67).
As credit relations have developed (seeCREDIT) and as the volume of noncash payments through the financial and banking system has increased, the importance of money of account has grown. The rise and development of computer-based elements in the payment-clearing mechanism and the emergence and rapid growth of “electronic money” in the form of entries in bank accounts or electrical impulses fixed in computer “memories”—in the USA in the early 1970’s—attest to the growing use of money of account. Nevertheless, such new phenomena in the system of money circulation change neither the nature of money nor the role that money plays in commodity production.
REFERENCESMarx, K. K kritike politicheskoi ekonomii, ch. 2. In K. Marx and F. Engels, Soch., 2nd ed., vol. 13.
Marx, K. Ekonomicheskie rukopisi 1857–59 gg. In ibid., vol. 46, part 2. Pages 304–21.
Eidel’nant, A. “‘Bumazhnoe zoloto’ i zoloto.” Mirovaia ekonomika i mezhdunarodnye otnosheniia, 1971, no. 8.
Usoskin, V. M. “Kapitalisticheskii platezhnyi mekhanizm v usloviiakh nauchno-tekhnicheskoi revoliutsii.” In ibid., 1974, no. 12; 1975, no. 1.
A. A. KHANDRUEV