Money, a specific kind of commodity which acts as a universal equivalent in commodity exchange; it is a product of the spontaneous development of exchange and of the form of value. Money emerged as a consequence of the development of commodity production and the growth of its contradictions. With the advent of money the entire world of commodities polarised into commodities and money. Money is the embodiment of value, of social wealth. It is a manifestation of the social labour concentrated in it and the social relations between people. Since money came into existence, the world of commodities has had a form for expressing its value, so money is a measure of the abstract social labour spent on manufacturing all other commodities; money expresses the value of commodities; particular, concrete labour expended in gold mining and embodied in gold, becomes an expression of the abstract social labour expended in the production of all other commodities. It is not until the product of concrete labour, the commodity, has been exchanged for money that the labour expended in its production is acknowledged by society. Money helps to take indirect stock of the social labour embodied in commodities. The functioning of money in the context of private ownership of the means of production turns it into a tool for exploitation of the working people. The essence of money manifests itself in its functions: 1. Money as a measure of value. In this function, money expresses the values of commodities as uniform, qualitatively identical and quantitatively comparable magnitudes. This is achieved by equating the value of all commodities to gold. Gold functions as the measure of value for all the commodities. A specific feature of this function is that money performs it ideally, as mentally imagined money. To express the price of a commodity (monetary expression of commodity value), it must mentally be made equal to a certain amount of gold. The particular weight of gold specified by the state as the monetary unit is referred to as the scale of prices. 2. In its function as a means of circulation, money acts as the mediator in commodity circulation and must exist in reality. Money performs this function in a momentary form by constantly changing hands. The momentary nature of this process makes it possible to replace full-value money with less valuable money (e. g., copper coins) or paper signs of value. The function of money as a means of circulation is a further development of the contradiction of commodity production which is expressed as the time and space gap between the acts of purchase and sale. This fact engenders the formal possibility of crises. 3. The function of money as a means of forming hoards of money arises because the circulation process may be interrupted for some reason. Money ceases to circulate and settles down. This function requires full-value money in the form of golden coins and money material in the form of gold bullion. Accumulation of money as treasure is caused by the need for every commodity producer to have a certain reserve against the contingencies of the market. This function is also important in the regulation of money circulation. If gold is in short supply in circulation, it flows in from the treasures; if there is a surplus, it leaves the circulation sphere. 4. In the sale of commodities on credit, with deferred payment, in deals on money loans, in payment of taxes, ground rent, wages, etc., money performs the function of a means of payment. This function makes it possible for debts to be mutually cancelled, which means that less cash is required. 5. The function of world money is performed by money on the world market and in the international payment turnover between countries. Gold is the world money. The development of money’s functions is a manifestation of the development of commodity production and its 232 contradictions. As capitalism emerges and develops, the role of money changes significantly. It becomes a tool for the exploitation of hired labour, for appropriating the unpaid labour of wage workers. The need for money in a socialist economy is attributable to the existence of commodity relations and the action of the law of value. Under socialism, money performs its function as universal equivalent of a specific kind, employed in a planned way for organising cost accounting, taking stock, and supervision of the production and distribution of social product, and of the measures of labour and consumption. The socialist state makes use of money to rationally run the economy, as a material incentive to enterprises and workers for expanding production, and for the steady improvement of living standards. The new social significance of money under socialism is that it embodies social labour united through socialist ownership, and so cannot become a tool of exploitation. The functions of money under socialism become functions of planned economic management.