The Creature from Jekyll Island: A Second Look at the Federal Reserve

Griffin argues that the definition of money has been intentionally confused by those in power. Therefore, his goal in this chapter is to demystify the concept of money and offer a functional definition. He distills various concepts of money into one working definition: “money is anything which is accepted as a medium of exchange” (142).

Griffin gives a brief history of barter and exchange to show how money evolved within human society. In barter economies, people exchanged items that had intrinsic value for other items with intrinsic value. Then came commodity money, in which items that everyone wants, like food, store value that can then be traded. With the advent of metal mining, metal became the most common commodity of money. Metal is ideal money because it is inherently valuable, can be broken down into smaller pieces for smaller purchases, is reliably measurable, is limited in supply, and is non-perishable. Initially, gold, silver, and copper were the primary units of money used throughout the world. All three are easy to transport and separable, and determining their purity and weight is reliable and simple.

In this system, the overall supply of money is unimportant because prices will adjust based on the currently available supply of money.