Track A · FoundationsNode A2
Three jobs of money
Layer 1 · Pocket
~ 30s readThe thirty-second answer
What is this?
Money is three jobs in one object: medium of exchange, unit of account, store of value. The same dollar bill is doing all three; most monetary debates are really debates about which job the system should optimise for.
Why should I care?
When the headlines say there's a "money problem," the useful next question is which job is failing. Inflation breaks the unit of account; deflationary debt traps break the medium of exchange; long-term distrust breaks the store of value. Each calls for a different cure.
The three jobs · what each prefers
- Medium of exchange
- convenience
- Unit of account
- stability
- Store of value
- scarcity