Money, Motivation and Store

Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021. Trump received a Bachelor of Science in economics from the University of Pennsylvania in 1968, and his father named him president of his real estate business in 1971. Trump renamed it the Trump Organization and reoriented the company toward building and renovating skyscrapers, hotels, casinos, and golf courses. After a series of business failures in the late twentieth century, he successfully launched side ventures that required little capital, mostly by licensing the Trump name. From 2004 to 2015, he co-produced and hosted the reality television series The Apprentice. He and his businesses have been plaintiff or defendant in more than 4,000 state and federal legal actions, including six business bankruptcies. Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote.[a] During the campaign, his political positions were described as populist, protectionist, isolationist, and nationalist. His election and policies sparked numerous protests. He was the first U.S. president with no prior military or government experience. The 2017–2019 special counsel investigation established that Russia had interfered in the 2016 election to favor Trump's campaign. Trump promoted conspiracy theories and made many false and misleading statements during his campaigns and presidency, to a degree unprecedented in American politics. Many of his comments and actions have been characterized as racially charged or racist and many as misogynistic. As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.-Mexico border, and implemented a policy of family separations for migrants detained at the U.S. border. He weakened environmental protections, rolling back more than 100 environmental policies and regulations. He signed the Tax Cuts and Jobs Act of 2017, which cut taxes for individuals and businesses and rescinded the individual health insurance mandate penalty of the Affordable Care Act. He appointed Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett to the U.S. Supreme Court. He reacted slowly to the COVID-19 pandemic, ignored or contradicted many recommendations from health officials, used political pressure to interfere with testing efforts, and spread misinformation about unproven treatments. Trump initiated a trade war with China and withdrew the U.S. from the proposed Trans-Pacific Partnership trade agreement, the Paris Agreement on climate change, and the Iran nuclear deal. He met with North Korean leader Kim Jong Un three times but made no progress on denuclearization. Trump refused to concede after losing the 2020 presidential election to Joe Biden, falsely claiming widespread electoral fraud, and attempted to overturn the results by pressuring government officials, mounting scores of unsuccessful legal challenges, and obstructing the presidential transition. On January 6, 2021, he urged his supporters to march to the U.S. Capitol, which many of them then attacked, resulting in multiple deaths and interrupting the electoral vote count. Trump is the only American president to have been impeached twice. After he tried to pressure Ukraine in 2019 to investigate Biden, he was impeached by the House of Representatives for abuse of power and obstruction of Congress; he was acquitted by the Senate in February 2020. The House impeached him again in January 2021, for incitement of insurrection, and the Senate acquitted him in February. Scholars and historians rank Trump as one of the worst presidents in American history.[1][2] Since leaving office, Trump has remained the de facto leader of the Republican Party and is a candidate in the 2024 Republican presidential primaries. In 2023, a jury found that Trump sexually abused a woman. He was also indicted in New York on 34 felony counts of falsifying business records, in Florida on 40 felony counts related to his mishandling of classified documents, in Washington, D.C., on four felony counts of conspiracy and obstruction for efforts to overturn the 2020 presidential election, and in Georgia on 13 charges of racketeering and other alleged felonies committed in an effort to overturn the state's 2020 election results. Trump pleaded not guilty to all charges. Personal life Early life A black-and-white photograph of Donald Trump as a teenager, smiling, wearing a dark pseudo-military uniform with various badges and a light-colored stripe crossing his right shoulder Trump at the New York Military Academy in 1964 Donald John Trump was born on June 14, 1946, at Jamaica Hospital in Queens, New York City,[3] the fourth child of Fred Trump, a Bronx-born real estate developer whose parents were German immigrants, and Mary Anne MacLeod Trump, an immigrant from Scotland. Trump grew up with older siblings Maryanne, Fred Jr., and Elizabeth and younger brother Robert in the Jamaica Estates neighborhood of Queens, and attended the private Kew-Forest School from kindergarten through seventh grade.[4][5][6] At age 13, he was enrolled at the New York Military Academy, a private boarding school,[7] and, in 1964, he enrolled at Fordham University. Two years later, he transferred to the Wharton School of the University of Pennsylvania, graduating in May 1968 with a Bachelor of Science in economics.[8][9] In 2015, Trump's lawyer Michael Cohen threatened Trump's colleges, high school, and the College Board with legal action if they released Trump's academic records.[10] While in college, Trump obtained four student draft deferments during the Vietnam War era.[11] In 1966, he was deemed fit for military service based upon a medical examination, and in July 1968, a local draft board classified him as eligible to serve.[12] In October 1968, he was classified 1-Y, a conditional medical deferment,[13] and in 1972, he was reclassified 4-F due to bone spurs, permanently disqualifying him from service.[14] Family Main article: Family of Donald Trump In 1977, Trump married Czech model Ivana Zelníčková.[15] They had three children: Donald Jr. (born 1977), Ivanka (born 1981), and Eric (born 1984). Ivana became a naturalized United States citizen in 1988.[16] The couple divorced in 1990, following Trump's affair with actress Marla Maples.[17] Trump and Maples married in 1993 and divorced in 1999. They have one daughter, Tiffany (born 1993), who was raised by Marla in California.[18] In 2005, Trump married Slovenian model Melania Knauss.[19] They have one son, Barron (born 2006).[20] Melania gained U.S. citizenship in 2006.[21] Religion Trump went to Sunday school and was confirmed in 1959 at the First Presbyterian Church in Jamaica, Queens.[22][23] In the 1970s, his parents joined the Marble Collegiate Church in Manhattan, which belongs to the Reformed Church in America.[22][24] The pastor at Marble, Norman Vincent Peale,[22] ministered to the family until his death in 1993.[24] Trump has described him as a mentor.[25] In 2015, the church stated that Trump was not an active member.[23] In 2019, he appointed his personal pastor, televangelist Paula White, to the White House Office of Public Liaison.[26] In 2020, he said he identified as a non-denominational Christian.[27] Health habits Trump has called golfing his "primary form of exercise" but usually does not walk the course.[28] He considers exercise a waste of energy because he believes exercise depletes the body's energy "like a battery, with a finite amount of energy".[29] In 2015, Trump's campaign released a letter from his longtime personal physician, Harold Bornstein, stating that Trump would "be the healthiest individual ever elected to the presidency".[30] In 2018, Bornstein said Trump had dictated the contents of the letter and that three Trump agents had seized his medical records in a February 2017 raid on the doctor's office.[30][31] Wealth Main article: Wealth of Donald Trump Ivana Trump and King Fahd shake hands, with Ronald Reagan standing next to them smiling. All are in black formal attire. Trump (far right) and wife Ivana in the receiving line of a state dinner for King Fahd of Saudi Arabia in 1985, with U.S. president Ronald Reagan and First Lady Nancy Reagan In 1982, Trump made the initial Forbes list of wealthy people for holding a share of his family's estimated $200 million net worth (equivalent to $606 million in 2022).[32] His losses in the 1980s dropped him from the list between 1990 and 1995.[33] After filing the mandatory financial disclosure report with the FEC in July 2015, he announced a net worth of about $10 billion. Records released by the FEC showed at least $1.4 billion in assets and $265 million in liabilities.[34] Forbes estimated his net worth dropped by $1.4 billion between 2015 and 2018.[35] In their 2021 billionaires ranking, Trump's net worth was estimated to be $2.4 billion (1,299th in the world).[36] Journalist Jonathan Greenberg reported that Trump called him in 1984, pretending to be a fictional Trump Organization official named "John Barron". Greenberg said that Trump, speaking as "Barron", falsely asserted that he owned more than 90 percent of his father's business to get a higher ranking for himself on the Forbes 400 list of wealthy Americans. Greenberg also wrote that Forbes had vastly overestimated Trump's wealth and wrongly included him on the Forbes 400 rankings of 1982, 1983, and 1984.[37] Trump has often said he began his career with "a small loan of one million dollars" from his father and that he had to pay it back with interest.[38] He was a millionaire by age eight, borrowed at least $60 million from his father, largely failed to repay those loans, and received another $413 million (2018 dollars adjusted for inflation) from his father's company.[39][40] In 2018, he and his family were reported to have committed tax fraud, and the New York State Department of Taxation and Finance started an investigation.[40] His investments underperformed the stock and New York property markets.[41][42] Forbes estimated in October 2018 that his net worth declined from $4.5 billion in 2015 to $3.1 billion in 2017 and his product-licensing income from $23 million to $3 million.[43] Contrary to his claims of financial health and business acumen, Trump's tax returns from 1985 to 1994 show net losses totaling $1.17 billion. The losses were higher than those of almost every other American taxpayer. The losses in 1990 and 1991, more than $250 million each year, were more than double those of the nearest taxpayers. In 1995, his reported losses were $915.7 million (equivalent to $1.76 billion in 2022).[44][45][32] In 2020, the New York Times obtained Trump's tax information extending over two decades. Its reporters found that Trump reported losses of hundreds of millions of dollars and had, since 2010, deferred declaring $287 million in forgiven debt as taxable income. His income mainly came from his share in The Apprentice and businesses in which he was a minority partner, and his losses mainly from majority-owned businesses. Much income was in tax credits for his losses, which let him avoid annual income tax payments or lower them to $750. During the 2010s, Trump balanced his businesses' losses by selling and borrowing against assets, including a $100 million mortgage on Trump Tower (due in 2022) and the liquidation of over $200 million in stocks and bonds. He personally guaranteed $421 million in debt, most of which is due by 2024.[46] As of October 2021, Trump had over $1.3 billion in total debts, much of which is secured by his assets.[47] In 2020, he owed $640 million to banks and trust organizations, including Bank of China, Deutsche Bank, and UBS, and approximately $450 million to unknown creditors. The value of his assets exceeds his debt.[48] Business career Main article: Business career of Donald Trump Further information: Business projects of Donald Trump in Russia Real estate Exterior ground view of Trump tower, a contemporary skyscraper with a glass curtain and stepped façade Trump Tower in Midtown Manhattan Starting in 1968, Trump was employed at his father's real estate company, Trump Management, which owned racially segregated middle-class rental housing in New York City's outer boroughs.[49][50] In 1971, he became president of the company and began using the Trump Organization as an umbrella brand.[51] Between 1991 and 2009, he filed for Chapter 11 bankruptcy protection for six of his businesses, the Plaza Hotel in Manhattan, the casinos in Atlantic City, New Jersey, and the Trump Hotels & Casino Resorts company.[52] Manhattan developments Trump attracted public attention in 1978 with the launch of his family's first Manhattan venture, the renovation of the derelict Commodore Hotel, adjacent to Grand Central Terminal.[53] The financing was facilitated by a $400 million city property tax abatement arranged for Trump by his father who also, jointly with Hyatt, guaranteed a $70 million bank construction loan.[50][54] The hotel reopened in 1980 as the Grand Hyatt Hotel,[55] and that same year, Trump obtained rights to develop Trump Tower, a mixed-use skyscraper in Midtown Manhattan.[56] The building houses the headquarters of the Trump Corporation and Trump's PAC and was Trump's primary residence until 2019.[57][58] In 1988, Trump acquired the Plaza Hotel with a loan from a consortium of sixteen banks.[59] The hotel filed for bankruptcy protection in 1992, and a reorganization plan was approved a month later, with the banks taking control of the property.[60] In 1995, Trump defaulted on over $3 billion of bank loans, and the lenders seized the Plaza Hotel along with most of his other properties in a humiliating restructuring that allowed Trump to avoid personal bankruptcy.[61][62] The lead bank's attorney said of the banks' decision that they "all agreed that he'd be better alive than dead."[62] In 1996, Trump acquired the mostly vacant 71-story skyscraper at 40 Wall Street, later rebranded as the Trump Building, and renovated it.[63] In the early 1990s, Trump won the right to develop a 70-acre (28 ha) tract in the Lincoln Square neighborhood near the Hudson River. Struggling with debt from other ventures in 1994, Trump sold most of his interest in the project to Asian investors, who were able to finance the project's completion, Riverside South.[64] Atlantic City casinos The entrance of the Trump Taj Mahal, a casino in Atlantic City. It has motifs evocative of the Taj Mahal in India. Entrance of the Trump Taj Mahal in Atlantic City In 1984, Trump opened Harrah's at Trump Plaza, a hotel and casino, with financing and management help from the Holiday Corporation.[65] It was unprofitable, and Trump paid Holiday $70 million in May 1986 to take sole control.[66] In 1985, Trump bought the unopened Atlantic City Hilton Hotel and renamed it Trump Castle.[67] His wife Ivana managed it until 1988.[68] Both casinos filed for Chapter 11 bankruptcy protection in 1992.[69] Trump bought a third Atlantic City venue in 1988, the Trump Taj Mahal. It was financed with $675 million in junk bonds and completed for $1.1 billion, opening in April 1990.[70][71] Trump filed for Chapter 11 bankruptcy protection in 1991. Under the provisions of the restructuring agreement, Trump gave up half his initial stake and personally guaranteed future performance.[72] To reduce his $900 million of personal debt, he sold the Trump Shuttle airline; his megayacht, the Trump Princess, which had been leased to his casinos and kept docked; and other businesses.[73] In 1995, Trump founded Trump Hotels & Casino Resorts (THCR), which assumed ownership of the Trump Plaza.[74] THCR purchased the Taj Mahal and the Trump Castle in 1996 and went bankrupt in 2004 and 2009, leaving Trump with 10 percent ownership.[65] He remained chairman until 2009.[75] Mar-a-Lago Main article: Mar-a-Lago In 1985, Trump acquired the Mar-a-Lago estate in Palm Beach, Florida.[76] In 1995, he converted the estate into a private club with an initiation fee and annual dues. He continued to use a wing of the house as a private residence.[77] In 2019, Trump declared Mar-a-Lago his primary residence.[58] Golf courses Main article: Donald Trump and golf The Trump Organization began building and buying golf courses in 1999.[78] It owns fourteen and manages another three Trump-branded courses worldwide.[78][79] Trump visited a Trump Organization property on 428 (nearly one in three) of the 1,461 days of his presidency and is estimated to have played 261 rounds of golf, one every 5.6 days.[80] Licensing of the Trump brand See also: List of things named after Donald Trump The Trump name has been licensed for various consumer products and services, including foodstuffs, apparel, adult learning courses, and home furnishings.[81][82] According to an analysis by The Washington Post, there are more than 50 licensing or management deals involving Trump's name, and they have generated at least $59 million in revenue for his companies.[83] By 2018, only two consumer goods companies continued to license his name.[81] Side ventures Trump, Doug Flutie, and an unnamed official standing behind a lectern with big, round New Jersey Generals sign, with members of the press seated in the background Trump and New Jersey Generals quarterback Doug Flutie at a 1985 press conference in the lobby of Trump Tower In September 1983, Trump purchased the New Jersey Generals, a team in the United States Football League. After the 1985 season, the league folded, largely due to Trump's strategy of moving games to a fall schedule (when they competed with the NFL for audience) and trying to force a merger with the NFL by bringing an antitrust suit against the organization.[84][85] Trump's businesses have hosted several boxing matches at the Atlantic City Convention Hall, adjacent to and promoted as taking place at the Trump Plaza in Atlantic City.[86][87] In 1989 and 1990, Trump lent his name to the Tour de Trump cycling stage race, which was an attempt to create an American equivalent of European races such as the Tour de France or the Giro d'Italia.[88] From 1986 to 1988, Trump purchased significant blocks of shares in various public companies while suggesting that he intended to take over the company and then sold his shares for a profit,[44] leading some observers to think he was engaged in greenmail.[89] The New York Times found that Trump initially made millions of dollars in such stock transactions, but later "lost most, if not all, of those gains after investors stopped taking his takeover talk seriously".[44] In 1988, Trump purchased the Eastern Air Lines Shuttle, financing the purchase with $380 million (equivalent to $940 million in 2022)[32] in loans from a syndicate of 22 banks. He renamed the airline Trump Shuttle and operated it until 1992.[90] Trump defaulted on his loans in 1991, and ownership passed to the banks.[91] The airline was eventually sold to US Airways.[90] A red star with a bronze outline and "Donald Trump" and a TV icon written on it in bronze, embedded in a black terrazzo sidewalk Trump's star on the Hollywood Walk of Fame In 1992, Trump, his siblings Maryanne, Elizabeth, and Robert, and his cousin John W. Walter, each with a 20 percent share, formed All County Building Supply & Maintenance Corp. The company had no offices and is alleged to have been a shell company for paying the vendors providing services and supplies for Trump's rental units, then billing those services and supplies to Trump Management with markups of 20–50 percent and more. The owners shared the proceeds generated by the markups.[40][92] The increased costs were used as justification to get state approval for increasing the rents of Trump's rent-stabilized units.[40] From 1996 to 2015, Trump owned all or part of the Miss Universe pageants, including Miss USA and Miss Teen USA.[93][94] Due to disagreements with CBS about scheduling, he took both pageants to NBC in 2002.[95][96] In 2007, Trump received a star on the Hollywood Walk of Fame for his work as producer of Miss Universe.[97] NBC and Univision dropped the pageants from their broadcasting lineups in June 2015.[98] Trump University Main article: Trump University In 2004, Trump co-founded Trump University, a company that sold real estate training courses priced from $1,500 to $35,000.[99] After New York State authorities notified the company that its use of the word "university" violated state law (as it was not an academic institution), its name was changed to the Trump Entrepreneur Initiative in 2010.[100] In 2013, the State of New York filed a $40 million civil suit against Trump University, alleging that the company made false statements and defrauded consumers.[101] In addition, two class actions were filed in federal court against Trump and his companies. Internal documents revealed that employees were instructed to use a hard-sell approach, and former employees testified that Trump University had defrauded or lied to its students.[102][103][104] Shortly after he won the 2016 presidential election, Trump agreed to pay a total of $25 million to settle the three cases.[105] Foundation Main article: Donald J. Trump Foundation The Donald J. Trump Foundation was a private foundation established in 1988.[106][107] In the foundation's final years, its funds mostly came from donors other than Trump, who did not donate any personal funds to the charity from 2009 until 2014.[108] The foundation gave to health-care- and sports-related charities, as well as conservative groups.[109] In 2016, The Washington Post reported that the charity committed several potential legal and ethical violations, including alleged self-dealing and possible tax evasion.[110] Also in 2016, the New York Attorney General determined the foundation to be in violation of state law for soliciting donations and ordered it to immediately cease its fundraising activities in New York.[111] Trump's team announced in December 2016 that the foundation would be dissolved.[112] In June 2018, the New York attorney general's office filed a civil suit against the foundation, Trump, and his adult children, seeking $2.8 million in restitution and additional penalties.[113][114] In December 2018, the foundation ceased operation and disbursed its assets to other charities.[115] In November 2019, a New York state judge ordered Trump to pay $2 million to a group of charities for misusing the foundation's funds, in part to finance his presidential campaign.[116][117] Legal affairs and bankruptcies Main article: Legal affairs of Donald Trump Roy Cohn was Trump's fixer, lawyer, and mentor for 13 years in the 1970s and 1980s.[118] According to Trump, Cohn sometimes waived fees due to their friendship.[118] In 1973, Cohn helped Trump countersue the United States government for $100 million (equivalent to $659 million in 2022)[32] over its charges that Trump's properties had racial discriminatory practices. Trump's counterclaims were dismissed, and the government's case went forward, ultimately resulting in a settlement.[119] In 1975, an agreement was struck requiring Trump's properties to furnish the New York Urban League with a list of all apartment vacancies, every week for two years, among other things.[120] Cohn introduced political consultant Roger Stone to Trump, who enlisted Stone's services to deal with the federal government.[121] According to a review of state and federal court files conducted by USA Today in 2018, Trump and his businesses had been involved in more than 4,000 state and federal legal actions.[122] While Trump has not filed for personal bankruptcy, his over-leveraged hotel and casino businesses in Atlantic City and New York filed for Chapter 11 bankruptcy protection six times between 1991 and 2009.[123] They continued to operate while the banks restructured debt and reduced Trump's shares in the properties.[123] During the 1980s, more than 70 banks had lent Trump $4 billion.[124] After his corporate bankruptcies of the early 1990s, most major banks, with the exception of Deutsche Bank, declined to lend to him.[125] After the January 6 United States Capitol attack, the bank decided not to do business with Trump or his company in the future.[126] Media career Main article: Media career of Donald Trump Books Main article: Bibliography of Donald Trump Using ghostwriters, Trump has produced up to 19 books on business, financial, or political topics under his name.[127] His first book, The Art of the Deal (1987), was a New York Times Best Seller. While Trump was credited as co-author, the entire book was written by Tony Schwartz.[128] According to The New Yorker, "The book expanded Trump's renown far beyond New York City, making him an emblem of the successful tycoon."[128] Trump has called the volume his second favorite book, after the Bible.[129] Film and television Main article: Media career of Donald Trump Trump made cameo appearances in many films and television shows from 1985 to 2001.[130] Trump had a sporadic relationship with the professional wrestling promotion WWE since the late 1980s.[131] He appeared at WrestleMania 23 in 2007 and was inducted into the celebrity wing of the WWE Hall of Fame in 2013.[132] Trump, in a suit, sits in a crowded baseball stadium Trump at a New York Mets baseball game in 2009 Starting in the 1990s, Trump was a guest about 24 times on the nationally syndicated Howard Stern Show.[133] He also had his own short form talk radio program called Trumped! (one to two minutes on weekdays) from 2004 to 2008.[134][135] From 2011 until 2015, he was a weekly unpaid guest commentator on Fox & Friends.[136][137] From 2004 to 2015, Trump was co-producer and host of reality shows The Apprentice and The Celebrity Apprentice. Trump played a flattering, highly fictionalized version of himself as a superrich and successful chief executive who eliminated contestants with the catchphrase "You're fired". The shows remade his image for millions of viewers nationwide.[138][139] With the related licensing agreements, they earned him more than $400 million which he invested in largely unprofitable businesses.[140] In February 2021, Trump resigned from the Screen Actors Guild he had been a member of since 1989 rather than face a disciplinary committee hearing for inciting the January 6, 2021, mob attack on the U.S. Capitol and for his "reckless campaign of misinformation aimed at discrediting and ultimately threatening the safety of journalists".[141] Two days later, the union permanently barred him from readmission.[142] Political career Further information: Political career of Donald Trump Donald Trump shakes hands with Bill Clinton in a lobby; Trump is speaking and Clinton is smiling, and both are wearing suits. Trump and President Bill Clinton in June 2000 Trump's political party affiliation has changed numerous times. He registered as a Republican in 1987;[143] a member of the Independence Party, the New York state affiliate of the Reform Party, in 1999;[144] a Democrat in 2001; a Republican in 2009; unaffiliated in 2011; and a Republican in 2012.[143] In 1987, Trump placed full-page advertisements in three major newspapers,[145] expressing his views on foreign policy and on how to eliminate the federal budget deficit.[146] He ruled out running for local office but not for the presidency.[145] In 1988, he approached Lee Atwater, asking to be put into consideration to be Republican nominee George H. W. Bush's running mate. Bush found the request "strange and unbelievable".[147] Presidential campaigns (2000–2016) In 2000, Trump ran in the California and Michigan primaries for nomination as the Reform Party candidate for the 2000 United States presidential election but withdrew from the race in February 2000.[148][149][150] A July 1999 poll matching him against likely Republican nominee George W. Bush and likely Democratic nominee Al Gore showed Trump with seven percent support.[151] Trump, leaning heavily onto a lectern, with his mouth open mid-speech and a woman clapping politely next to him Trump speaking at CPAC 2011 In 2011, Trump speculated about running against President Barack Obama in the 2012 election, making his first speaking appearance at the Conservative Political Action Conference (CPAC) in February 2011 and giving speeches in early primary states.[152][153] In May 2011, he announced he would not run,[152] and he endorsed Mitt Romney in February 2012.[154] Trump's presidential ambitions were generally not taken seriously at the time.[155] 2016 presidential campaign Main article: Donald Trump 2016 presidential campaign Further information: 2016 Republican Party presidential primaries and 2016 United States presidential election § General election campaign Trump's fame and provocative statements earned him an unprecedented amount of free media coverage, elevating his standing in the Republican primaries.[156] He adopted the phrase "truthful hyperbole", coined by his ghostwriter Tony Schwartz, to describe his public speaking style.[128][157] His campaign statements were often opaque and suggestive,[158] and a record number of them were false.[159][160][161] The Los Angeles Times wrote, "Never in modern presidential politics has a major candidate made false statements as routinely as Trump has."[162][163] Trump said he disdained political correctness and frequently made claims of media bias.[164][165] Trump speaking in front of an American flag behind a lectern, wearing a black suit and red hat. The lectern sports a blue "TRUMP" sign. Trump campaigning in Arizona, March 2016 Trump announced his candidacy in June 2015.[166][167] His campaign was initially not taken seriously by political analysts, but he quickly rose to the top of opinion polls.[168] He became the front-runner in March 2016[169] and was declared the presumptive Republican nominee in May.[170] Hillary Clinton led Trump in national polling averages throughout the campaign, but, in early July, her lead narrowed.[171][172] In mid-July Trump selected Indiana governor Mike Pence as his vice presidential running mate,[173] and the two were officially nominated at the 2016 Republican National Convention.[174] Trump and Clinton faced off in three presidential debates in September and October 2016. Trump twice refused to say whether he would accept the result of the election.[175] Campaign rhetoric and political positions Main article: Political positions of Donald Trump Trump's political positions and his rhetoric were right-wing populist.[176][177][178] Politico described them as "eclectic, improvisational and often contradictory", quoting a health-care policy expert at the American Enterprise Institute as saying that his political positions were "a total random assortment of whatever plays publicly".[179] NBC News counted "141 distinct shifts on 23 major issues" during his campaign.[180] Trump questioned the need for NATO and espoused views that were described as isolationist, non-interventionist, and protectionist.[181] His campaign platform emphasized renegotiating U.S.–China relations and free trade agreements such as NAFTA and the Trans-Pacific Partnership, strongly enforcing immigration laws, and building a new wall along the U.S.–Mexico border. Other campaign positions included pursuing energy independence while opposing climate change regulations such as the Clean Power Plan and the Paris Agreement, modernizing and expediting services for veterans, repealing and replacing the Affordable Care Act, abolishing Common Core education standards, investing in infrastructure, simplifying the tax code while reducing taxes for all economic classes, and imposing tariffs on imports by companies that offshore jobs. He advocated a largely non-interventionist approach to foreign policy while increasing military spending, extreme vetting or banning immigrants from Muslim-majority countries[182] to pre-empt domestic Islamic terrorism, and aggressive military action against the Islamic State of Iraq and the Levant. He described NATO as "obsolete".[183][184] Trump helped bring far-right fringe ideas, beliefs, and organizations into the mainstream.[185] Trump was slow to disavow an endorsement from David Duke after he was questioned about it during a CNN interview on February 28, 2016.[186] Duke enthusiastically supported Trump and said he and like-minded people voted for Trump because of his promises to "take our country back".[187][188] In August 2016, Trump hired Steve Bannon, the executive chairman of Breitbart News—described by Bannon as "the platform for the alt-right"—as his campaign CEO.[189] The alt-right movement coalesced around and supported Trump's candidacy, due in part to its opposition to multiculturalism and immigration.[190][191][192] Financial disclosures Further information: Tax returns of Donald Trump Trump's FEC-required reports listed assets above $1.4 billion and outstanding debts of at least $315 million.[34][193] Trump did not release his tax returns, contrary to the practice of every major candidate since 1976 and his promises in 2014 and 2015 to do so if he ran for office.[194][195] He said his tax returns were being audited, and that his lawyers had advised him against releasing them.[196] After a lengthy court battle to block release of his tax returns and other records to the Manhattan district attorney for a criminal investigation, including two appeals by Trump to the United States Supreme Court, in February 2021 the high court allowed the records to be released to the prosecutor for review by a grand jury.[197][198] In October 2016, portions of Trump's state filings for 1995 were leaked to a reporter from The New York Times. They show that Trump had declared a loss of $916 million that year, which could have let him avoid taxes for up to 18 years.[199] Election to the presidency Main article: 2016 United States presidential election Electoral college map, depicting Trump winning many states in the South and Midwest and Biden winning many states in the Northeast and Pacific West 2016 electoral vote results. Trump won 304–227 On November 8, 2016, Trump received 306 pledged electoral votes versus 232 for Clinton, though, after elector defections on both sides, the official count was ultimately 304 to 227.[200] Trump, the fifth person to be elected president while losing the popular vote, received nearly 2.9 million fewer votes than Clinton.[201] He also was the only president who neither served in the military nor held any government office prior to becoming president.[202] Trump's victory was a political upset.[203] Polls had consistently shown Clinton with a nationwide—though diminishing—lead, as well as an advantage in most of the competitive states. Trump's support had been modestly underestimated, while Clinton's had been overestimated.[204] Trump won 30 states, including Michigan, Pennsylvania, and Wisconsin, states which had been considered a blue wall of Democratic strongholds since the 1990s. Clinton won 20 states and the District of Columbia. Trump's victory marked the return of an undivided Republican government—a Republican White House combined with Republican control of both chambers of Congress.[205] Pennsylvania Ave., completely packed with protesters, mostly women, many wearing pink and holding signs with progressive feminist slogans Women's March in Washington on January 21, 2017 Trump's election victory sparked protests in major U.S. cities in the days following the election.[206][207] On the day after Trump's inauguration, an estimated 2.6 million people worldwide, including an estimated half million in Washington, D.C., protested against Trump in the Women's Marches.[208] Presidency (2017–2021) Main article: Presidency of Donald Trump For a chronological guide, see Timeline of the Donald Trump presidency. Early actions See also: Presidential transition of Donald Trump and First 100 days of Donald Trump's presidency Trump, with his family watching, raises his right hand and places his left hand on the Bible as he takes the oath of office. Roberts stands opposite him administering the oath. Trump is sworn in as president by Chief Justice John Roberts. Trump was inaugurated on January 20, 2017. During his first week in office, he signed six executive orders, which authorized: interim procedures in anticipation of repealing the Affordable Care Act ("Obamacare"), withdrawal from the Trans-Pacific Partnership negotiations, reinstatement of the Mexico City policy, advancement of the Keystone XL and Dakota Access Pipeline construction projects, reinforcement of border security, and a planning and design process to construct a wall along the U.S. border with Mexico.[209] Trump's daughter Ivanka and son-in-law Jared Kushner became his assistant and senior advisor, respectively.[210][211] Conflicts of interest Before being inaugurated, Trump moved his businesses into a revocable trust run by his sons, Eric and Donald Jr., and a business associate.[212][213] Though he said he would eschew "new foreign deals", the Trump Organization pursued expansions of its operations in Dubai, Scotland, and the Dominican Republic. Trump continued to profit from his businesses and to know how his administration's policies affected his businesses.[213][214] He was sued for violating the Domestic and Foreign Emoluments Clauses of the U.S. Constitution, marking the first time that the clauses had been substantively litigated.[215] One case was dismissed in lower court.[216] Two were dismissed by the U.S. Supreme Court as moot after the end of Trump's term.[217] Domestic policy Economy Main article: Economic policy of the Donald Trump administration Trump speaks at a lectern, with a crowd in front of and behind him. A banner behind him reads "Buy American – Hire American" Trump speaks to automobile workers in Michigan, March 2017. Trump took office at the height of the longest economic expansion in American history,[218] which began in June 2009 and continued until February 2020, when the COVID-19 recession began.[219] In December 2017, Trump signed the Tax Cuts and Jobs Act of 2017. The bill had been passed by both Republican-controlled chambers of Congress without any Democratic votes. It reduced tax rates for businesses and individuals, with business tax cuts to be permanent and individual tax cuts set to expire after 2025, and eliminated the penalty associated with Affordable Care Act's individual mandate.[220][221] The Trump administration claimed that the act would either increase tax revenues or pay for itself by prompting economic growth. Instead, revenues in 2018 were 7.6 percent lower than projected.[222] Despite a campaign promise to eliminate the national debt in eight years, Trump approved large increases in government spending and the 2017 tax cut. As a result, the federal budget deficit increased by almost 50 percent, to nearly $1 trillion in 2019.[223] Under Trump, the U.S. national debt increased by 39 percent, reaching $27.75 trillion by the end of his term, and the U.S. debt-to-GDP ratio hit a post-World War II high.[224] Trump also failed to deliver the $1 trillion infrastructure spending plan on which he had campaigned.[225] Trump is the only modern U.S. president to leave office with a smaller workforce than when he took office, by 3 million people.[218] Climate change, environment, and energy Main article: Environmental policy of the Donald Trump administration Trump rejects the scientific consensus on climate change.[226][227] He reduced the budget for renewable energy research by 40 percent and reversed Obama-era policies directed at curbing climate change.[228] In June 2017, Trump announced the withdrawal of the United States from the Paris Agreement, making the U.S. the only nation in the world to not ratify the agreement.[229] Trump aimed to boost the production and exports of fossil fuels.[230][231] Natural gas expanded under Trump, but coal continued to decline.[232][233] Trump rolled back more than 100 federal environmental regulations, including those that curbed greenhouse gas emissions, air and water pollution, and the use of toxic substances. He weakened protections for animals and environmental standards for federal infrastructure projects, and expanded permitted areas for drilling and resource extraction, such as allowing drilling in the Arctic Refuge. Trump's actions while president have been called "a very aggressive attempt to rewrite our laws and reinterpret the meaning of environmental protections".[234] Deregulation In January 2017, Trump signed Executive Order 13771, which directed that, for every new regulation, federal agencies "identify" two existing regulations for elimination, though it did not require elimination.[235] He dismantled many federal regulations on health,[236][237] labor,[238][237] and the environment,[239][237] among other topics. Trump signed 14 Congressional Review Act resolutions repealing federal regulations, including a bill that made it easier for severely mentally ill persons to buy guns.[240] During his first six weeks in office, he delayed, suspended, or reversed ninety federal regulations,[241] often "after requests by the regulated industries".[242] The Institute for Policy Integrity found that 78 percent of Trump's proposals were blocked by courts or did not prevail over litigation.[243] Health care During his campaign, Trump vowed to repeal and replace the Affordable Care Act (ACA).[244] In office, he scaled back the Act's implementation through executive orders 13765[245] and 13813.[246] Trump expressed a desire to "let Obamacare fail"; his administration cut the ACA enrollment period in half and drastically reduced funding for advertising and other ways to encourage enrollment.[247][248] Trump falsely claimed he saved the coverage of pre-existing conditions provided by the ACA.[249] In June 2018, the Trump administration joined 18 Republican-led states in arguing before the Supreme Court that the elimination of the financial penalties associated with the individual mandate had rendered the ACA unconstitutional.[250][251] If they had succeeded, it would have eliminated health insurance coverage for up to 23 million Americans.[250] During the 2016 campaign, Trump promised to protect funding for Medicare and other social safety-net programs, but in January 2020, he suggested he was willing to consider cuts to such programs.[252] In response to the opioid epidemic, Trump signed legislation in 2018 to increase funding for drug treatments but was widely criticized for failing to make a concrete strategy. U.S. opioid overdose deaths declined slightly in 2018 but surged to a record 50,052 deaths in 2019.[253] Social issues Main article: Social policy of Donald Trump Trump barred organizations that provide abortions or abortion referrals from receiving federal funds.[254] He said he supported "traditional marriage" but considered the nationwide legality of same-sex marriage a "settled" issue.[255] In March 2017, his administration rolled back key components of the Obama administration's workplace protections against discrimination of LGBT people.[256] Trump's attempted rollback of anti-discrimination protections for transgender patients in August 2020 was halted by a federal judge after the Supreme Court's ruling in July had extended employees' civil rights protections to gender identity and sexual orientation.[257] Trump has said he is opposed to gun control in general, although his views have shifted over time.[258] After several mass shootings during his term, he said he would propose legislation related to guns, but he abandoned that effort in November 2019.[259] His administration took an anti-marijuana position, revoking Obama-era policies that provided protections for states that legalized marijuana.[260] Trump is a long-time advocate of capital punishment.[261][262] Under his administration, the federal government executed 13 prisoners, more than in the previous 56 years combined and after a 17-year moratorium.[263] In 2016, Trump said he supported the use of interrogation torture methods such as waterboarding[264][265] but later appeared to recant this due to the opposition of Defense Secretary James Mattis.[266] Pardons and commutations Further information: List of people granted executive clemency by Donald Trump Trump granted 237 requests for clemency, fewer than all presidents since 1900 with the exception of George H. W. Bush and George W. Bush.[267] Only 25 of them had been vetted by the Justice Department's Office of the Pardon Attorney; the others were granted to people with personal or political connections to him, his family, and his allies, or recommended by celebrities.[268][269] From 2017 to 2019, he pardoned, amongst others, former Navy sailor Kristian Saucier, who was convicted of taking classified photographs of classified areas inside a submarine;[270] and right-wing commentator Dinesh D'Souza.[271] Following a request by celebrity Kim Kardashian, Trump commuted the life sentence of Alice Marie Johnson, who had been convicted of drug trafficking.[272] Trump also pardoned or reversed the sentences of three American servicemen convicted or accused of committing war crimes in Afghanistan or Iraq.[273] In November and December 2020, Trump pardoned four Blackwater private security contractors convicted of killing Iraqi civilians in the 2007 Nisour Square massacre;[274] white-collar criminals Michael Milken and Bernard Kerik;[275] daughter Ivanka's father-in-law Charles Kushner;[269] and five people convicted as a result of investigations into Russian interference in the 2016 presidential elections. Among them were Michael Flynn; Roger Stone, whose 40-month sentence for lying to Congress, witness tampering, and obstruction he had already commuted in July; and Paul Manafort.[276] In his last full day in office, Trump granted 73 pardons, including to Steve Bannon and Trump fundraiser Elliott Broidy, and commuted 70 sentences.[277] Lafayette Square protester removal and photo op Main article: Donald Trump photo op at St. John's Church Trump and group of officials and advisors on the way from White House complex to St. John's Church On June 1, 2020, federal law-enforcement officials used batons, rubber bullets, pepper spray projectiles, stun grenades, and smoke to remove a largely peaceful crowd of protesters from Lafayette Square, outside the White House.[278][279] Trump then walked to St. John's Episcopal Church, where protesters had set a small fire the night before; he posed for photographs holding a Bible, with senior administration officials later joining him in photos.[278][280] Trump said on June 3 that the protesters were cleared because "they tried to burn down the church [on May 31] and almost succeeded", describing the church as "badly hurt".[281] Religious leaders condemned the treatment of protesters and the photo opportunity itself.[282] Many retired military leaders and defense officials condemned Trump's proposal to use the U.S. military against anti-police-brutality protesters.[283] Immigration Main article: Immigration policy of Donald Trump Trump's proposed immigration policies were a topic of bitter and contentious debate during the campaign. He promised to build a wall on the Mexico–United States border to restrict illegal movement and vowed Mexico would pay for it.[284] He pledged to deport millions of illegal immigrants residing in the United States,[285] and criticized birthright citizenship for incentivizing "anchor babies".[286] As president, he frequently described illegal immigration as an "invasion" and conflated immigrants with the criminal gang MS-13,[287] though available research shows undocumented immigrants have a lower crime rate than native-born Americans.[288][289] Trump attempted to drastically escalate immigration enforcement, including implementing harsher immigration enforcement policies against asylum seekers from Central America than any modern U.S. president.[290][291] From 2018 onward, Trump deployed nearly 6,000 troops to the U.S.–Mexico border[292] to stop most Central American migrants from seeking U.S. asylum. In 2020, his administration widened the public charge rule to further restrict immigrants who might use government benefits from getting permanent residency via green cards.[293] Trump reduced the number of refugees admitted into the U.S. to record lows. When Trump took office, the annual limit was 110,000; Trump set a limit of 18,000 in the 2020 fiscal year and 15,000 in the 2021 fiscal year.[294][295] Additional restrictions implemented by the Trump administration caused significant bottlenecks in processing refugee applications, resulting in fewer refugees accepted compared to the allowed limits.[296] Travel ban Main article: Trump travel ban Further information: Executive Order 13769 and Executive Order 13780 Following the 2015 San Bernardino attack, Trump proposed to ban Muslim foreigners from entering the United States until stronger vetting systems could be implemented.[297] He later reframed the proposed ban to apply to countries with a "proven history of terrorism".[298] On January 27, 2017, Trump signed Executive Order 13769, which suspended admission of refugees for 120 days and denied entry to citizens of Iraq, Iran, Libya, Somalia, Sudan, Syria, and Yemen for 90 days, citing security concerns. The order took effect immediately and without warning, causing confusion and chaos at airports.[299][300] Protests against the ban began at airports the next day.[299][300] Legal challenges to the order resulted in nationwide preliminary injunctions.[301] A March 6 revised order, which excluded Iraq and gave other exemptions, again was blocked by federal judges in three states.[302][303] In a decision in June 2017, the Supreme Court ruled that the ban could be enforced on visitors who lack a "credible claim of a bona fide relationship with a person or entity in the United States".[304] The temporary order was replaced by Presidential Proclamation 9645 on September 24, 2017, which restricted travel from the originally targeted countries except Iraq and Sudan, and further banned travelers from North Korea and Chad, along with certain Venezuelan officials.[305] After lower courts partially blocked the new restrictions, the Supreme Court allowed the September version to go into full effect on December 4, 2017,[306] and ultimately upheld the travel ban in a June 2019 ruling.[307] Family separation at border Main article: Trump administration family separation policy Children sitting within a wire mesh compartment Children and juveniles in a wire mesh compartment, showing sleeping mats and thermal blankets on floor Children sitting within a wire mesh compartment in the Ursula detention facility in McAllen, Texas, June 2018 The Trump administration separated more than 5,400 children of migrant families from their parents at the U.S.–Mexico border, a sharp increase in the number of family separations at the border starting from the summer of 2017.[308][309] In April 2018, the Trump administration announced a "zero tolerance" policy whereby every adult suspected of illegal entry would be criminally prosecuted.[310] This resulted in family separations, as the migrant adults were put in criminal detention for prosecution, while their children were separated as unaccompanied alien minors.[311] Administration officials described the policy as a way to deter illegal immigration.[312] The policy of family separations was unprecedented in previous administrations and sparked public outrage.[312][313] Trump falsely asserted that his administration was merely following the law, blaming Democrats, despite the separations being his administration's policy.[314][315][316] Although Trump originally argued that the separations could not be stopped by an executive order, he acceded to intense public objection and signed an executive order on June 20, 2018, mandating that migrant families be detained together unless "there is a concern" doing so would pose a risk to the child.[317][318] On June 26, 2018, Judge Dana Sabraw concluded that the Trump administration had "no system in place to keep track of" the separated children, nor any effective measures for family communication and reunification;[319] Sabraw ordered for the families to be reunited and family separations stopped except in limited circumstances.[320] After the federal-court order, the Trump administration separated more than a thousand migrant children from their families; the ACLU contended that the Trump administration had abused its discretion and asked Sabraw to more narrowly define the circumstances warranting separation.[309] Trump wall and government shutdown Main articles: Trump wall and 2018–2019 United States federal government shutdown Trump speaks with U.S. Border Patrol agents. Behind him are black SUVs, four short border wall prototype designs, and the current border wall in the background Trump examines border wall prototypes in Otay Mesa, California. One of Trump's central campaign promises was to build a 1,000-mile (1,600 km) border wall to Mexico and have Mexico pay for it.[321] By the end of his term, the U.S. had built "40 miles [64 km] of new primary wall and 33 miles [53 km] of secondary wall" in locations where there had been no barriers and 365 miles (587 km) of primary or secondary border fencing replacing dilapidated or outdated barriers.[322] In 2018, Trump refused to sign any appropriations bill from Congress unless it allocated $5.6 billion in funds for the border wall,[323] resulting in the federal government partially shutting down for 35 days from December 2018 to January 2019, the longest U.S. government shutdown in history.[324][325] Around 800,000 government employees were furloughed or worked without pay.[326] Trump and Congress ended the shutdown by approving temporary funding that provided delayed payments to government workers but no funds for the wall.[324] The shutdown resulted in an estimated permanent loss of $3 billion to the economy, according to the Congressional Budget Office.[327] About half of those polled blamed Trump for the shutdown, and Trump's approval ratings dropped.[328] To prevent another imminent shutdown in February 2019, Congress passed and Trump signed a funding bill that included $1.375 billion for 55 miles (89 km) of bollard border fencing.[329] Trump also declared a National Emergency Concerning the Southern Border of the United States, intending to divert $6.1 billion of funds Congress had allocated to other purposes.[329] Trump vetoed a joint resolution to overturn the declaration, and the Senate voted against a veto override.[330] Legal challenges to the diversion of $2.5 billion originally meant for the Department of Defense's drug interdiction efforts[331][332] and $3.6 billion originally meant for military construction[333][334] were unsuccessful. Foreign policy Main article: Foreign policy of the Donald Trump administration See also: List of international presidential trips made by Donald Trump Trump and other G7 leaders sit at a conference table Trump with the other G7 leaders at the 45th summit in France, 2019 Trump described himself as a "nationalist"[335] and his foreign policy as "America First".[336] His foreign policy was marked by praise and support of populist, neo-nationalist, and authoritarian governments.[337] Hallmarks of foreign relations during Trump's tenure included unpredictability and uncertainty,[336] a lack of a consistent foreign policy,[338] and strained and sometimes antagonistic relationships with the U.S.'s European allies.[339] He criticized NATO allies and privately suggested on multiple occasions that the United States should withdraw from the alliance.[340][341] Trade See also: Trump tariffs Trump withdrew the U.S. from the Trans-Pacific Partnership (TPP) negotiations,[342] imposed tariffs on steel and aluminum imports,[343] and launched a trade war with China by sharply increasing tariffs on 818 categories (worth $50 billion) of Chinese goods imported into the U.S.[344] While Trump said that import tariffs are paid by China into the U.S. Treasury, they are paid by American companies that import goods from China.[345] Although he pledged during the campaign to significantly reduce the U.S.'s large trade deficits, the trade deficit in July 2020, during the COVID-19 pandemic, "was the largest monthly deficit since July 2008".[346] Following a 2017–2018 renegotiation, the United States-Mexico-Canada Agreement (USMCA) became effective in July 2020 as the successor to NAFTA.[347] Russia Trump and Putin, both seated, lean over and shake hands Putin and Trump shaking hands at the G20 Osaka summit, June 2019 The Trump administration, according to Reuters, "water[ed] down the toughest penalties the U.S. had imposed on Russian entities" after its 2014 annexation of Crimea.[348][349] Trump withdrew the U.S. from the Intermediate-Range Nuclear Forces Treaty, citing alleged Russian non-compliance,[350] and supported a potential return of Russia to the G7.[351] Trump repeatedly praised and rarely criticized Russian president Vladimir Putin[352][353] but opposed some actions of the Russian government.[354][355] After he met Putin at the Helsinki Summit in July 2018, Trump drew bipartisan criticism for accepting Putin's denial of Russian interference in the 2016 presidential election, rather than accepting the findings of U.S. intelligence agencies.[356][357][358] Trump did not discuss alleged Russian bounties offered to Taliban fighters for attacking American soldiers in Afghanistan with Putin, saying both that he doubted the intelligence and that he was not briefed on it.[359] China Before and during his presidency, Trump repeatedly accused China of taking unfair advantage of the U.S.[360] As president, Trump launched a trade war against China that was widely characterized as a failure,[361][362][363] sanctioned Huawei for its alleged ties to Iran,[364] significantly increased visa restrictions on Chinese students and scholars,[365] and classified China as a currency manipulator.[366] Trump also juxtaposed verbal attacks on China with praise of Chinese Communist Party leader Xi Jinping,[367] which was attributed to trade war negotiations with the leader.[368] After initially praising China for its handling of the COVID-19 pandemic,[369] he began a campaign of criticism over its response starting in March 2020.[370] Trump said he resisted punishing China for its human rights abuses against ethnic minorities in the northwestern Xinjiang region for fear of jeopardizing trade negotiations.[371] In July 2020, the Trump administration imposed sanctions and visa restrictions against senior Chinese officials, in response to expanded mass detention camps holding more than a million of the country's Uyghur Muslim ethnic minority.[372] North Korea See also: 2018–19 Korean peace process Trump and Kim shake hands on a stage with U.S. and North Korean flags in the background Trump meets Kim Jong Un at the Singapore summit, June 2018. In 2017, when North Korea's nuclear weapons were increasingly seen as a serious threat,[373] Trump escalated his rhetoric, warning that North Korean aggression would be met with "fire and fury like the world has never seen".[374][375] In 2017, Trump declared that he wanted North Korea's "complete denuclearization", and engaged in name-calling with leader Kim Jong Un.[374][376] After this period of tension, Trump and Kim exchanged at least 27 letters in which the two men described a warm personal friendship.[377][378] Trump met Kim three times: in Singapore in 2018, in Hanoi in 2019, and in the Korean Demilitarized Zone in 2019.[379] Trump became the first sitting U.S. president to meet a North Korean leader or to set foot on North Korean soil.[379] Trump also lifted some U.S. sanctions against North Korea.[380] However, no denuclearization agreement was reached,[381] and talks in October 2019 broke down after one day.[382] While conducting no nuclear tests since 2017, North Korea continued to build up its arsenal of nuclear weapons and ballistic missiles.[383][384] Afghanistan U.S. and Taliban officials stand spaced apart in a formal room U.S. Secretary of State Mike Pompeo meeting with Taliban delegation in Qatar in September 2020 U.S. troop numbers in Afghanistan increased from 8,500 in January 2017 to 14,000 a year later,[385] reversing Trump's pre-election position critical of further involvement in Afghanistan.[386] In February 2020, the Trump administration signed a conditional peace agreement with the Taliban, which called for the withdrawal of foreign troops in 14 months "contingent on a guarantee from the Taliban that Afghan soil will not be used by terrorists with aims to attack the United States or its allies" and for the U.S. to seek the release of 5,000 Taliban imprisoned by the Afghan government.[387][388][389] By the end of Trump's term, 5,000 Taliban had been released, and, despite the Taliban continuing attacks on Afghan forces and integrating Al-Qaeda members into its leadership, U.S. troops had been reduced to 2,500.[389] Israel Trump supported many of the policies of Israeli Prime Minister Benjamin Netanyahu.[390] Under Trump, the U.S. recognized Jerusalem as the capital of Israel[391] and Israeli sovereignty over the Golan Heights,[392] leading to international condemnation including from the United Nations General Assembly, the European Union, and the Arab League.[393][394] Saudi Arabia Trump, King Salman of Saudi Arabia, and Abdel Fattah el-Sisi place their hands on a glowing white orb light at waist level Trump, King Salman of Saudi Arabia, and Egyptian president Abdel Fattah el-Sisi at the 2017 Riyadh summit in Saudi Arabia Trump actively supported the Saudi Arabian–led intervention in Yemen against the Houthis and in 2017 signed a $110 billion agreement to sell arms to Saudi Arabia,[395] In 2018, the U.S. provided limited intelligence and logistical support for the intervention.[396][397] Following the 2019 attack on Saudi oil facilities, which the U.S. and Saudi Arabia blamed on Iran, Trump approved the deployment of 3,000 additional U.S. troops, including fighter squadrons, two Patriot batteries, and a Terminal High Altitude Area Defense system (THAAD), to Saudi Arabia and the United Arab Emirates.[398] Syria Trump ordered missile strikes in April 2017 and in April 2018 against the Assad regime in Syria, in retaliation for the Khan Shaykhun and Douma chemical attacks, respectively.[399][400] In December 2018, Trump declared "we have won against ISIS", contradicting Department of Defense assessments, and ordered the withdrawal of all troops from Syria.[401][402] The next day, Mattis resigned in protest, calling his decision an abandonment of the U.S.'s Kurdish allies who played a key role in fighting ISIS.[403] One week after his announcement, Trump said he would not approve any extension of the American deployment in Syria.[404] Trump and Turkish President Recep Tayyip Erdoğan at the White House in May 2017 In October 2019, after Trump spoke to Turkish president Recep Tayyip Erdoğan, U.S. troops in northern Syria were withdrawn from the area and Turkey invaded northern Syria, attacking and displacing American-allied Kurds in the area.[405] Later that month, the U.S. House of Representatives, in a rare bipartisan vote of 354 to 60, condemned Trump's withdrawal of U.S. troops from Syria, for "abandoning U.S. allies, undermining the struggle against ISIS, and spurring a humanitarian catastrophe".[406][407] Iran In May 2018, Trump withdrew the United States from the Joint Comprehensive Plan of Action (JCPO

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions. 2024

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

Katt Williams’ Viral Shannon Sharpe Interview Has Essential Lessons For Brands. FULL VIDEO HERE -- > https://www.youtube.com/watch?v=8oRRZiRQxTs Jan 9, 2024,04:07pm EST HBO's 13th Annual U.S. Comedy Arts Festival - Katt Williams Katt Williams during HBO's 13th Annual U.S. Comedy Arts Festival - Katt Williams at Wheeler Opera ... [+]FILMMAGIC, INC FOR HBO In less than a week, comedian Katt Williams’ interview on Shannon Sharpe’s Club Shay Shay podcast has racked up more than 37 million views on YouTube. In it, Katt Williams called out various other popular comedians for not being truthful about comments made on their previous appearances on Sharpe’s show, and for not being transparent about how they achieved their success. A lot was said during the nearly 3-hour long interview that has dominated internet headlines since the show dropped. While most of the conversation online surrounds the controversial things Williams had to say about his fellow comedians, there were lots of other gems from the discussion that are worth highlighting, particularly for marketers. Here are a few. Respect And Study The Craft One of the major beefs Williams had with the comedians he called out during the interview stemmed from the fact that he didn’t feel they invested a sufficient amount of time studying the craft. He didn’t feel like they were doing the hard work of developing jokes that would accomplish the primary goal of making the audience laugh. Williams lamented that his colleagues took a lot of shortcuts. He contrasted the shortcuts other comedians took, to the more detailed and diligent approach he takes. He spent years studying the structure and strategy behind jokes of popular comedians of all backgrounds, styles, and eras. Williams also said that he writes new material for every tour he goes on, rather than reusing material from previous years. He even claimed that he spent a significant amount of time studying his competition for movie roles and developed an analytical way to showcase that he was funnier than them. MORE FOR YOU How Samsung’s Galaxy S24 Ultra Will Change Smartphones Forever SEC Issues Sudden Warning As Bitcoin ETF Race Primes Crypto For A 17 Trillion Earthquake Boosting The Price Of Ethereum XRP And Solana Appeals Court Skeptical Of Trump s Immunity Claims In Jan 6 Criminal Case The lesson for marketers is not to take shortcuts. Don’t settle for superficiality when it comes to engaging the communities you want to serve — especially those from underrepresented and underserved communities. CEO: C-suite news, analysis, and advice for top decision makers right to your inbox. Email address Sign Up By signing up, you accept and agree to our Terms of Service (including the class action waiver and arbitration provisions), and you acknowledge our Privacy Statement. Not only will shortcuts and superficiality not yield you the results you desire, but it greatly diminishes the likelihood of you developing a lasting relationship with consumers from those communities. Instead, invest in developing a deep degree of intimacy with the customers you want to serve. The better you know them, the better you’ll be able to integrate that knowledge into your craft, so you can better serve them. It Takes Effort To Diversify Your Audience Katt Williams talked about the early days of his career when it seemed like he fared better with White audiences than Black audiences. Instead of just sticking with the audiences that immediately “got him” he took the time to study and get to know the audiences he wanted to reach at a deeper level. He created material for them, tested it with them, honed it, tested it some more, and kept going until he had a winning formula. Williams talked about a moment when he realized he was getting the same amount of laughs while in front of Black audiences that he was getting with White ones. Eventually, through his work and learning of his customer, he developed material that worked not only with segregated audiences, but with blended ones. That ability to make an audience that included people who were different from each other laugh came only as a result of learning how to talk to each of them effectively individually. Katt Williams revealed his secret to winning the hearts of any audience no matter where he was performing, was devoting part of his act to be local to the community he was in. If he was in Atlanta, he infused jokes and observations about Atlanta into the first part of his show. If he was in San Francisco, or Brussels, he took the same approach. If he talked to church folks, he didn’t curse and incorporated jokes related to church culture. The people you serve are different. Those differences come as a result of race, gender, age, body size and type, sexual orientation, geography, language spoken, marital status, parenting status and so much more. And those elements of difference form the basis of a manner in which you can connect at a deeper level with the people you serve. When you acknowledge those differences while also demonstrating to people that even though you may be different, you still belong together, you set the foundation to develop loyal raving fans. Transparency Rules The Day A major reason why the content of the Katt Williams interview was so riveting, was because of the transparency he offered. It was a rare look behind the curtain of the inner workings (and infighting) that happens within an industry. The advice for marketers and brands isn’t to be scandalous and to start collecting and producing receipts on your competitors. The lesson learned is that audiences crave transparency. They crave truth. They don’t want to just see the finished product from you. They want to know your process for getting there. They want to understand your methodology, your work ethic, and the obstacles you had to climb to deliver products and experiences that not only solve a problem for them, but transform them. They want and need to understand the story behind what makes you uniquely you. Transparency helps you unlock a deeper, more emotional connection with the people you want to reach, in a way that the purely polished presentation of you struggles to achieve. Servings Underrepresented Communities Is Good Business The Club Shay Shay podcast has a predominantly Black audience. The interview was between two Black men, talking about mostly Black comedians. And yet, the impact the interview has had has been massive. The high number of views, the conversations all over social media channels, the articles on mainstream news sites, the response videos and commentaries, and even private discussion showcase that the audience and the featured talent are present and profitable. For comparison, the most popular podcast in the world is the Joe Rogan Experience. The most popular episode he has in terms of YouTube is one he did with Elon Musk more than five years ago. To date, it has more than 68 million views. The way the Williams and Sharpe interview is trending in it’s first week, it will eclipse the views on that video. It’s long been said that content with Black leads or leads from underrepresented and underserved communities do not have the same reach, mass market appeal, or revenue potential as more “mainstream” leads. But that objection has been disproven time and time again. This viral show is just the latest example of that. Content by Black artists and for the Black community are relevant, mainstream, and profitable. The same can be said for other underrepresented and underserved communities. Just look at the impact of the Barbie movie, and Taylor Swift and Beyonce’s tours world tours had in terms of revenue and attention garnered in 2023 alone. The lesson here is to stop focusing all your energy on what seems to be gen pop and mainstream audiences. Instead, start leaning hard into content by and for underrepresented, underserved, and underestimated communities.

Micah "Katt" Williams (born September 2, 1971) is an American stand-up comedian and actor. He played Money Mike in Friday After Next, was a recurring guest on Wild 'n Out, portrayed Bobby Shaw in My Wife and Kids, provided the voice of A Pimp Named Slickback in The Boondocks and Seamus in Cats & Dogs: The Revenge of Kitty Galore, and portrayed Lord Have Mercy in Norbit. In 2008, he voiced himself in the video game Grand Theft Auto IV. Early life Micah Williams was born in Cincinnati, Ohio, on September 2, 1971.[1][2][3] He was raised in Dayton, Ohio by Jehovah's Witness parents.[4][3] Williams has stated that he learned to read at 3 years old and was communicating in multiple languages, including French and Creole. He emancipated himself from his parents at age 13, moved to Florida and supported himself as a street vendor.[5][6] This was due to his father being intolerant and unsupportive of a life outside of the Jehovah's Witnesses and him wanting a future that was without the religion. He was homeless in Florida and lived at a park.[4] Career Stand-up career Williams started performing comedy in the Avondale neighborhood of Cincinnati.[7][8] He honed his comic delivery by performing his routine in clubs around the country and had become an established comic by 1999, appearing at the likes of The Improv, The Comedy Club, The Ice House, and The Hollywood Park Casino. Most notably, he appeared on BET's Comic View as Katt "N da Hatt" Williams.[7][8] Williams starred in his first comedy special, Let a Playa Play, in 2006. His first HBO stand-up special came in 2006 with The Pimp Chronicles, Pt. 1.[7] In 2007, he co-wrote and starred as himself in the comedy film Katt Williams: American Hustle. The film had critical success and established Williams as a mainstream comedian.[7][9] In 2008, he released his second HBO comedy special, It's Pimpin' Pimpin'.[10][11] Keeping busy releasing comedy DVDs and touring, Williams had a comedy tour that was named the best of 2008 by Billboard.[11] After a four-year hiatus, Williams returned to stand-up in 2012 for his third HBO comedy special, Kattpacalypse.[12] Later that year, one day after a bizarre incident at a bar in Seattle that landed him in jail, he announced the end of his stand-up comedy career.[13] However, three days later, he announced he would not retire.[14] During late 2013, Williams was on his Growth Spurt Tour.[15] On August 16, 2014, he returned with a new HBO special titled Katt Williams: Priceless: Afterlife, which was directed by Spike Lee.[16][17] In September 2015, during an interview, Williams announced and described his upcoming Conspiracy Theory Tour: "The conspiracy conversation is a conversation that we are all familiar with. We know that there are conspiracies out there, but this is a conversation that encompasses a lot of things that aren't being discussed other places. That's the basis for all conspiracy theories: the fact that there is hidden information out there, and how our process changes about things that we thought we used to know. We all, at some point, if we're are at a certain age, we grew up thinking Pluto was a planet. This is probably going to go down as one of my finest works, just because it's a collection of forbidden topics that we can't seem to get answered. I am one of the rare urban public officials. Part of my guarantee in my ticket price is that I'm going to be talking about what we are talking about now, and discussing from now to the next time we see [me] again. This is the open discussion that we've had since 2003. This is what it is about."[18] In 2018, Williams released a new stand-up special on Netflix called Great America and shot in Jacksonville, Florida.[19] In 2022, he released a new stand-up special on Netflix called World War III. Film and television career In 2002, Williams made his acting debut on NYPD Blue. He gained notoriety on Wild 'n Out, in which he appeared for several seasons.[7][8] He appeared in the official music video for Wild 'n Out colleague Nick Cannon's single "Gigolo" in 2003. In 2007, Williams provided the voice of A Pimp Named Slickback in The Boondocks. He plays himself as an on-stage stand-up comedian in Grand Theft Auto IV performing several routines, including an abbreviated version of one of his routines from Katt Williams: American Hustle. He has appeared in several episodes of My Wife and Kids as character Bobby Shaw. He was the roastmaster of the Comedy Central Roast of Flavor Flav.[7][8] Williams has also played supporting characters in films, such as First Sunday and Norbit, but is more widely recognized for his character Money Mike in Friday After Next.[7][8] In 2018, he played the character Willy in the season 2 premiere of Atlanta, for which he won the Primetime Emmy Award for Outstanding Guest Actor in a Comedy Series. Music career Williams has also used the stage name "Money Mike" when rapping for songs by such artists as Baby Bash, The Game, and Suga Free. In 2006, he joined rapper Cam'ron's group the Diplomats, but was never signed as an official artist for the label.[20] On January 29, 2009, he released his debut studio/live album, It's Pimpin' Pimpin'. On November 19, 2013, he and Hell Rell released a diss song to Atlanta rapper Trinidad James entitled "Lames in the Game" due to comments made by James about the state of current hip hop music.[21] Controversy On August 27, 2011, Williams' performance at the Celebrity Theatre in Phoenix was marred by an incident during which he responded to a heckler (who was identified as having Mexican ancestry) with an angry tirade that included shouting "so if you love Mexico, bitch, get the fuck over there".[22] In an interview following the performance, he stated that the incident was caused by the heckler: "If a person starts their heckling with 'f' America, then that gives me the right to defend my country." He offered no apology for his remarks during the performance and said, "I don't think I need to apologize for being pro-American."[23] Two live performances in November 2012 ended early because of Williams' confrontational behavior. A November 1 performance at the Wells Fargo Theatre in Denver ended after he jumped off the stage to confront a heckler,[24] while a November 16 performance at the Oracle Arena in Oakland ended after he engaged in a profanity-laced confrontation with a heckler and was assisted off stage by his own security.[25] In January 2024, Williams was featured on former football tight end Shannon Sharpe's podcast, Club Shay Shay. This episode gained significant attention, with over 18.5 million YouTube views in less than 48 hours, for Williams' forthright and humorous discussion on various topics including his experiences in the entertainment industry, his approach to comedy, and perspectives on fellow comedians. During the interview, Williams remarked, "Well as a comedian, you get free drinks at the club. So... All comedians either turn out to be connoisseurs like myself or straight up and down alcoholics like 60% of Hollywood."[26] He also shared his candid views on acting, saying: "[Rickey Smiley] and Tyler Perry, he can't play a man to save his life. They play good women, and I believe that the best actor should be in the best role." Legal issues On November 13, 2006, Williams was arrested at Los Angeles International Airport after a stolen gun was found in his briefcase.[27] On December 14, he pleaded no contest to a misdemeanor count of carrying a concealed firearm and was sentenced to three years' probation, ordered to pay restitution, and given credit for the three days he spent in jail.[2] In November 2010, Williams was arrested by police while working on a film in Coweta County, Georgia. He was accused of stealing $3,500 worth of coins and jewelry. He was released the following day on a $40,000 bond.[28] Police later charged him with burglary and criminal trespass.[29] On June 11, 2011, Williams was arrested in connection with an alleged assault on a tractor driver. The alleged victim said three women approached his tractor at around 4:30 p.m. local time and attacked him with rocks and dirt clods, causing him facial injuries.[30] Los Angeles County Sheriff's Department officers arrived on the scene and arrested the three women for assault with a deadly weapon, and arrested Williams for felony intimidation of a witness.[31] He was booked into jail and released that same night on $50,000 bail.[31] On November 15, 2012, Williams was arrested in Oakland, California, on charges of suspicion of assault with a deadly weapon; he had allegedly beaten an 18-year-old man with a bottle aboard Williams' tour bus in Berkeley, California.[32] An attendee of Williams' shortened performance at the Oracle Arena in Oakland on November 16, 2012, filed a class action lawsuit days after the event, seeking compensation for himself and "all others who paid money for a show and got nothing but Katt Williams' nonperformance".[33] On December 2, 2012, Williams was arrested in Seattle after he allegedly got into a dispute at a bar in the South Lake Union neighborhood. His arrest came after he no-showed the first night of a planned two-night performance at the Paramount Theatre.[34] Five days later, he was arrested in Dunnigan, California, on a bench warrant arising from an incident the previous month in Sacramento, California, during which he allegedly drove a three-wheeled motorbike onto a sidewalk and refused to stop for police. The resulting chase was halted due to safety concerns, and the bench warrant was issued after Williams narrowly missed several bystanders.[35] On December 28, 2012, Williams was arrested in Los Angeles on child endangerment charges. He was held in lieu of $100,000 bail, and four of his adopted children were placed in protective custody.[36] On January 8, 2013, Williams was arrested at his Los Angeles home after failing to appear in Sacramento to answer the November 25 motorbike charges.[37] On October 29, 2014, Williams and Suge Knight were arrested for the theft of a camera from a photographer in Beverly Hills on September 5.[38] In April 2017, Williams pled no contest to the charge of robbery and was ordered to undertake a year of anger management classes as well as receiving three years' probation.[39] On February 29, 2016, Williams was arrested in Gainesville, Georgia, when a clerk at a swimming pool store said Williams had hit him. When police arrived, they found Williams already lying face down with his hands behind his back, waiting to be handcuffed.[40] On March 23, 2016, a video went viral of the 44-year-old Williams getting into a fight with a 17-year-old boy following a dispute during a soccer game in Gainesville. The authorities planned to review the incident with the DA in addition to his ongoing court cases.[41][42] On April 27, 2016, Williams was arrested and charged with battery in Atlanta, Georgia, after allegedly throwing a salt shaker at the manager of a local restaurant. The manager claimed to have been hit in the mouth with the salt shaker when Williams' group was denied preferential seating.[43] On July 24, 2016, Williams was arrested on suspicion of battery after an altercation with a woman at the Sportsman's Lodge, a hotel in Sherman Oaks, California.[44] On September 15, 2016, Williams was arrested in Fulton County, Georgia, on a charge of second-degree criminal damage to property, after having turned himself in on a warrant for failing to appear in court for the April 27 incident. This new arrest involved an allegation from February 28, 2016, stating that Williams had thrown a man's cellphone.[45] On October 6, 2018, Williams was arrested in Portland, Oregon, on a charge of assault in the fourth degree, after he assaulted a driver during an argument about his dog. He was additionally arrested on an outstanding warrant from Georgia. Entrepreneurship is the creation or extraction of economic value in ways that generally entail beyond the minimal amount of risk (assumed by a traditional business), and potentially involving values besides simply economic ones. An entrepreneur is an individual who creates and/or invests in one or more businesses, bearing most of the risks and enjoying most of the rewards.[1] The process of setting up a business is known as "entrepreneurship". The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services, and business/or procedures. More narrow definitions have described entrepreneurship as the process of designing, launching and running a new business, which is often similar to a small business, or (per Business Dictionary) as the "capacity and willingness to develop, organize and manage a business venture along with any of its risks to make a profit".[2] The people who create these businesses are often referred to as "entrepreneurs".[3][4] While definitions of entrepreneurship typically focus on the launch and operation of businesses, due to the high risks involved in launching a startup company, a significant proportion of startups have to close (in Mikal Belicove's words) due to "lack of funding, bad business decisions, government policies, an economic crisis, a lack of market demand, or a combination of all of these."[5] In the field of economics, the term entrepreneur is used for an entity which has the ability to translate inventions or technologies into products and services.[6] In this sense, entrepreneurship describes activities on the part of both established firms and new businesses. Perspectives on entrepreneurship In the 21st century the governments of nation states have tried to promote entrepreneurship, as well as enterprise culture, in the hope that it would improve or stimulate economic growth and competition. After the end of supply-side economics, entrepreneurship was supposed to boost the economy.[7] As an academic field, entrepreneurship accommodates different schools of thought. It has been studied within disciplines such as management, economics, sociology, and economic history.[8][9] Some view entrepreneurship as allocated to the entrepreneur. These scholars tend to focus on what the entrepreneur does and what traits an entrepreneur has. This is sometimes referred to as the functionalistic approach to entrepreneurship.[10] Others deviate from the individualistic perspective to turn the spotlight on the entrepreneurial process and immerse in the interplay between agency and context. This approach is sometimes referred to as the processual approach,[10] or the contextual turn/approach to entrepreneurship.[11][12] Elements This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources in this section. Unsourced material may be challenged and removed. Find sources: "Entrepreneurship" – news · newspapers · books · scholar · JSTOR (August 2021) (Learn how and when to remove this template message) Entrepreneurship includes the creation or extraction of economic value.[13][12][14] It is the act of being an entrepreneur, or the owner or manager of a business enterprise who, by risk and initiative, attempts to make profits.[citation needed] Entrepreneurs act as managers and oversee the launch and growth of an enterprise. Entrepreneurship is the process by which either an individual or a team identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation. In the early 19th century, the French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it "shifts economic resources out of an area of lower and into an area of higher productivity and greater yield". Entrepreneurs create something new and unique—they change or transmute value. Regardless of the firm size, big or small, it can take part in entrepreneurship opportunities. There are four criteria for becoming an entrepreneur. First, there must be opportunities or situations to recombine resources to generate profit. Second, entrepreneurship requires differences between people, such as preferential access to certain individuals or the ability to recognize information about opportunities. Third, taking on a level of risk is a necessity. Fourth, the entrepreneurial process requires the organization of people and resources.[15] An entrepreneur uses their time, energy, and resources to create value for others. They are rewarded for this effort monetarily and therefore both the consumer of the value created and the entrepreneur benefit. The entrepreneur is a factor in and the study of entrepreneurship reaches back to the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries. However, entrepreneurship was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics since the late 1970s. In the 20th century, the understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter in the 1930s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek. According to Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products, including new business models. It has been argued, that creative destruction is largely responsible for the dynamism of industries and long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is debated in academic economics. An alternative description posited by Israel Kirzner suggests that the majority of innovations may be much more incremental improvements such as the replacement of paper with plastic in the making of drinking straws. Entrepreneurical opportunities The exploitation of entrepreneurial opportunities may include:[16] Developing a business plan Hiring human resources Acquiring financial and material resources Providing leadership Being responsible for both the venture's success or failure Risk aversion The economist Joseph Schumpeter (1883–1950) saw the role of the entrepreneur in the economy as "creative destruction", Which he defined as launching innovations that simultaneously destroy old industries while ushering in new industries and approaches. For Schumpeter, the changes and "dynamic economic equilibrium brought on by the innovating entrepreneur [were] the norm of a healthy economy".[17] While entrepreneurship is often associated with new, small, for-profit start-ups, entrepreneurial behavior can be seen in small-, medium- and large-sized firms, new and established firms and in for-profit and not-for-profit organizations, including voluntary-sector groups, charitable organizations and government.[18] Entrepreneurship may operate within an entrepreneurship ecosystem which often includes: Government programs and services that promote entrepreneurship and support entrepreneurs and start-ups Non-governmental organizations such as small-business associations and organizations that offer advice and mentoring to entrepreneurs (e.g. through entrepreneurship centers or websites) Small-business advocacy organizations that lobby governments for increased support for entrepreneurship programs and more small business-friendly laws and regulations Entrepreneurship resources and facilities (e.g. business incubators and seed accelerators) Entrepreneurship education and training programs offered by schools, colleges and universities Financing (e.g. bank loans, venture capital financing, angel investing and government and private foundation grants)[19][need quotation to verify] In the 2000s, usage of the term "entrepreneurship" expanded to include how and why some individuals (or teams) identify opportunities, evaluate them as viable, and then decide to exploit them.[20] The term has also been used to discuss how people might use these opportunities to develop new products or services, launch new firms or industries, and create wealth.[21] The entrepreneurial process is uncertain because opportunities can only be identified after they have been exploited.[22] Entrepreneurs exhibit positive biases towards finding new possibilities and seeing unmet market needs, and a tendency towards risk-taking that makes them more likely to exploit business opportunities.[23][24] History Historical usage Emil Jellinek-Mercedes (1853–1918), here at the steering wheel of his Phoenix Double-Phaeton "Entrepreneur" (/ˌɒ̃trəprəˈnɜːr, -ˈnjʊər/ ⓘ, UK also /-prɛ-/) is a loanword from French. The word first appeared in the French dictionary entitled Dictionnaire Universel de Commerce compiled by Jacques des Bruslons and published in 1723.[25] Especially in Britain, the term "adventurer" was often used to denote the same meaning.[26] The study of entrepreneurship reaches back to the work in the late 17th and early 18th centuries of Irish-French economist Richard Cantillon, which was foundational to classical economics. Cantillon defined the term first in his Essai sur la Nature du Commerce en Général, or Essay on the Nature of Trade in General, a book William Stanley Jevons considered the "cradle of political economy".[27][28] Cantillon defined the term as a person who pays a certain price for a product and resells it at an uncertain price, "making decisions about obtaining and using the resources while consequently admitting the risk of enterprise". Cantillon considered the entrepreneur to be a risk taker who deliberately allocates resources to exploit opportunities to maximize the financial return.[29][30] Cantillon emphasized the willingness of the entrepreneur to assume the risk and to deal with uncertainty, thus he drew attention to the function of the entrepreneur and distinguished between the function of the entrepreneur and the owner who provided the money.[29][31] Jean-Baptiste Say also identified entrepreneurs as a driver for economic development, emphasizing their role as one of the collecting factors of production allocating resources from less to fields that are more productive. Both Say and Cantillon belonged to French school of thought and known as the physiocrats.[32] Dating back to the time of the medieval guilds in Germany, a craftsperson required special permission to operate as an entrepreneur, the small proof of competence (Kleiner Befähigungsnachweis), which restricted training of apprentices to craftspeople who held a Meister certificate. This institution was introduced in 1908 after a period of so-called freedom of trade (Gewerbefreiheit, introduced in 1871) in the German Reich. However, proof of competence was not required to start a business. In 1935 and in 1953, greater proof of competence was reintroduced (Großer Befähigungsnachweis Kuhlenbeck), which required craftspeople to obtain a Meister apprentice-training certificate before being permitted to set up a new business.[33] In the Ashanti Empire, successful entrepreneurs who accumulated large wealth and men as well as distinguished themselves through heroic deeds were awarded social and political recognition by being called "Abirempon" which means big men. By the eighteenth and nineteenth centuries AD, the appellation "Abirempon" had formalized and politicized to embrace those who conducted trade from which the whole state benefited. The state rewarded entrepreneurs who attained such accomplishments with Mena(elephant tail) which was the "heraldic badge"[34] 20th century In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and by other Austrian economists such as Carl Menger (1840-1921), Ludwig von Mises (1881-1973) and Friedrich von Hayek (1899–1992). While the loan from French of the English-language word "entrepreneur" dates to 1762,[35] the word "entrepreneurism" dates from 1902[36] and the term "entrepreneurship" also first appeared in 1902.[37] According to Schumpeter, an entrepreneur is willing and able to convert a new idea or invention into a successful innovation.[38] Entrepreneurship employs what Schumpeter called the "gale of creative destruction"[39] to replace in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models,[citation needed] thus creative destruction is largely[quantify] responsible for long-term economic growth. The idea that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory[clarification needed] and as such continues to be debated in academic economics. An alternative description by Israel Kirzner (1930– ) suggests that the majority of innovations may be incremental improvements – such as the replacement of paper with plastic in the construction of a drinking straw – that require no special qualities. For Schumpeter, entrepreneurship resulted in new industries and in new combinations of currently existing inputs. Schumpeter's initial example of this was the combination of a steam engine and then current wagon-making technologies to produce the horseless carriage. In this case, the innovation (i.e. the car) was transformational but did not require the development of dramatic new technology. It did not immediately replace the horse-drawn carriage, but in time incremental improvements reduced the cost and improved the technology, leading to the modern auto industry. Despite Schumpeter's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead of assuming that resources would find each other through a price system). In this treatment, the entrepreneur was an implied but unspecified actor, consistent with the concept of the entrepreneur being the agent of x-efficiency. For Schumpeter, the entrepreneur did not bear risk: the capitalist did. Schumpeter believed that the equilibrium was imperfect. Schumpeter (1934) demonstrated that the changing environment continuously provides new information about the optimum allocation of resources to enhance profitability. Some individuals acquire the new information before others and recombine the resources to gain an entrepreneurial profit. Schumpeter was of the opinion that entrepreneurs shift the production-possibility curve to a higher level using innovations.[40] Initially, economists made the first attempt[when?] to study the entrepreneurship concept in depth.[41] Alfred Marshall viewed the entrepreneur as a multi-tasking capitalist and observed that in the equilibrium of a completely competitive market there was no spot for "entrepreneurs" as economic-activity creators.[42] Changes in politics and society in Russia and China the late-20th century saw a flowering of entrepreneurial activity, producing Russian oligarchs[43] and Chinese millionaires.[44] 21st century In 2012, Ambassador-at-Large for Global Women's Issues Melanne Verveer greets participants in an African Women's Entrepreneurship Program at the State Department in Washington, D.C. In the 2000s, entrepreneurship was extended from its origins in for-profit businesses to include social entrepreneurship, in which business goals are sought alongside social, environmental or humanitarian goals and even the concept of the political entrepreneur.[according to whom?] Entrepreneurship within an existing firm or large organization has been referred to as intrapreneurship and may include corporate ventures where large entities "spin-off" subsidiary organizations.[45] Entrepreneurs are leaders willing to take risk and exercise initiative, taking advantage of market opportunities by planning, organizing and deploying resources,[46] often by innovating to create new or improving existing products or services.[47] In the 2000s, the term "entrepreneurship" has been extended to include a specific mindset resulting in entrepreneurial initiatives, e.g. in the form of social entrepreneurship, political entrepreneurship or knowledge entrepreneurship.[citation needed] According to Paul Reynolds, founder of the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers".[48] In recent years, entrepreneurship has been claimed as a major driver of economic growth in both the United States and Western Europe.[citation needed] Entrepreneurial activities differ substantially depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo, part-time projects to large-scale undertakings that involve a team and which may create many jobs. Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) to raise capital for building and expanding the business.[49] Many organizations exist to support would-be entrepreneurs, including specialized government agencies, business incubators (which may be for-profit, non-profit, or operated by a college or university), science parks and non-governmental organizations, which include a range of organizations including not-for-profits, charities, foundations and business advocacy groups (e.g. Chambers of commerce). Beginning in 2008, an annual "Global Entrepreneurship Week" event aimed at "exposing people to the benefits of entrepreneurship" and getting them to "participate in entrepreneurial-related activities" was launched.[who?] Relationship between small business and entrepreneurship The term "entrepreneur" is often conflated with the term "small business" or used interchangeably with this term. While most entrepreneurial ventures start out as a small business, not all small businesses are entrepreneurial in the strict sense of the term. Many small businesses are sole proprietor operations consisting solely of the owner—or they have a small number of employees—and many of these small businesses offer an existing product, process or service and they do not aim at growth. In contrast, entrepreneurial ventures offer an innovative product, process or service and the entrepreneur typically aims to scale up the company by adding employees, seeking international sales and so on, a process which is financed by venture capital and angel investments. In this way, the term "entrepreneur" may be more closely associated with the term "startup". Successful entrepreneurs have the ability to lead a business in a positive direction by proper planning, to adapt to changing environments and understand their own strengths and weaknesses.[50] Historians' ranking A 2002 survey of 58 business history professors gave the top spots in American business history to Henry Ford, followed by Bill Gates; John D. Rockefeller; Andrew Carnegie, and Thomas Edison. They were followed by Sam Walton; J. P. Morgan; Alfred P. Sloan; Walt Disney; Ray Kroc; Thomas J. Watson; Alexander Graham Bell; Eli Whitney; James J. Hill; Jack Welch; Cyrus McCormick; David Packard; Bill Hewlett; Cornelius Vanderbilt; and George Westinghouse.[51] A 1977 survey of management scholars reported the top five pioneers in management ideas were: Frederick Winslow Taylor; Chester Barnard; Frank Bunker Gilbreth Sr.; Elton Mayo; and Lillian Moller Gilbreth.[52] Types of entrepreneurship Cultural According to Christopher Rea and Nicolai Volland, cultural entrepreneurship is "practices of individual and collective agency characterized by mobility between cultural professions and modes of cultural production", which refers to creative industry activities and sectors. In their book The Business of Culture (2015), Rea and Volland identify three types of cultural entrepreneur: "cultural personalities", defined as "individuals who buil[d] their own personal brand of creativity as a cultural authority and leverage it to create and sustain various cultural enterprises"; "tycoons", defined as "entrepreneurs who buil[d] substantial clout in the cultural sphere by forging synergies between their industrial, cultural, political, and philanthropic interests"; and "collective enterprises", organizations which may engage in cultural production for profit or not-for-profit purposes.[53] In the 2000s, story-telling has emerged as a field of study in cultural entrepreneurship. Some have argued that entrepreneurs should be considered "skilled cultural operators"[54] that use stories to build legitimacy, and seize market opportunities and new capital.[55][56][57] Others have concluded that we need to speak of a 'narrative turn' in cultural entrepreneurship research.[58] Ethnic The term "ethnic entrepreneurship" refers to self-employed business owners who belong to racial or ethnic minority groups in the United States and Europe.[citation needed] A long tradition of academic research explores the experiences and strategies of ethnic entrepreneurs as they strive to integrate economically into mainstream U.S. or European society. Classic cases include Jewish merchants and tradespeople in large U.S. cities in the 19th and early 20th centuries as well as Chinese and Japanese small business owners (restaurants, farmers, shop owners) on the West Coast.[59] In the 2010s, ethnic entrepreneurship has been studied in the case of Cuban business owners in Miami, Indian motel owners of the U.S. and Chinese business owners in Chinatowns across the United States. While entrepreneurship offers these groups many opportunities for economic advancement, self-employment and business ownership in the United States remain unevenly distributed along racial/ethnic lines.[60] Despite numerous success stories of Asian entrepreneurs, a recent statistical analysis of U.S. census data shows that whites are more likely than Asians, African-Americans and Latinos to be self-employed in high prestige, lucrative industries.[60] Religious Religious entrepreneurship refers to both the use of entrepreneurship to pursue religious ends as well as how religion impacts entrepreneurial pursuits. While religion is a central topic in society, it is largely overlooked in entrepreneurship research.[61] The inclusion of religion may transform entrepreneurship including a focus on opportunities other than profit as well as practices, processes and purpose of entrepreneurship.[62][63] Gümüsay suggests a three pillars model to explain religious entrepreneurship: The pillars are the entrepreneurial, socio-economic/ethical, and religio-spiritual in the pursuit of value, values, and the metaphysical.[64] Feminist A feminist entrepreneur is an individual who applies feminist values and approaches through entrepreneurship, with the goal of improving the quality of life and well-being of girls and women.[65] Many are doing so by creating "for women, by women" enterprises. Feminist entrepreneurs are motivated to enter commercial markets by desire to create wealth and social change, based on the ethics of cooperation, equality and mutual respect.[66][67] These endeavours can have the effect of both empowerment and emancipation.[68] Institutional The American-born British economist Edith Penrose has highlighted the collective nature of entrepreneurship. She mentions that in modern organizations, human resources need to be combined to better capture and create business opportunities.[69] The sociologist Paul DiMaggio (1988:14) has expanded this view to say that "new institutions arise when organized actors with sufficient resources [institutional entrepreneurs] see in them an opportunity to realize interests that they value highly".[70] The notion has been widely applied.[71][72][73][74] Millennial The term "millennial entrepreneur" refers to a business owner who is affiliated with millennials (also known as Generation Y), those people born from approximately 1981 to 1996.[75] The offspring of baby boomers and early Gen Xers,[76] this generation was brought up using digital technology and mass media. Millennial business owners are well-equipped with knowledge of new technology and new business models and have a strong grasp of its business applications. There have been many breakthrough businesses that have come from millennial entrepreneurs such as Mark Zuckerberg, who created Facebook.[77] Despite the expectation of millennial success, there have been recent studies that have proven this to not be the case. The comparison between millennials who are self-employed and those who are not self-employed shows that the latter is higher. The reason for this is because they have grown up in a different generation and attitude than their elders. Some of the barriers to entry for entrepreneurs are the economy, debt from schooling, and the challenges of regulatory compliance.[78] Nascent A nascent entrepreneur is someone in the process of establishing a business venture.[79] In this observation, the nascent entrepreneur can be seen as pursuing an opportunity, i.e. a possibility to introduce new services or products, serve new markets, or develop more efficient production methods in a profitable manner.[80][81] But before such a venture is actually established, the opportunity is just a venture idea.[82] In other words, the pursued opportunity is perceptual in nature, propped by the nascent entrepreneur's personal beliefs about the feasibility of the venturing outcomes the nascent entrepreneur seeks to achieve.[83][84][85] Its prescience and value cannot be confirmed ex ante but only gradually, in the context of the actions that the nascent entrepreneur undertakes towards establishing the venture as described in Saras Sarasvathy's theory of Effectuation,[86] Ultimately, these actions can lead to a path that the nascent entrepreneur deems no longer attractive or feasible, or result in the emergence of a (viable) business. In this sense, over time, the nascent venture can move towards being discontinued or towards emerging successfully as an operating entity. The distinction between the novice, serial and portfolio entrepreneurs is an example of behavior-based categorization.[87] Other examples are the (related) studies by,[88][89] on start-up event sequences. Nascent entrepreneurship that emphasizes the series of activities involved in new venture emergence,[90][91][92] rather than the solitary act of exploiting an opportunity. Such research will help separate entrepreneurial action into its basic sub-activities and elucidate the inter-relationships between activities, between an activity (or sequence of activities) and an individual's motivation to form an opportunity belief, and between an activity (or sequence of activities) and the knowledge needed to form an opportunity belief. With this research, scholars will be able to begin constructing a theory of the micro-foundations of entrepreneurial action. Scholars interested in nascent entrepreneurship tend to focus less on the single act of opportunity exploitation and more on the series of actions in new venture emergence,[90][93][92] Indeed, nascent entrepreneurs undertake numerous entrepreneurial activities, including actions that make their businesses more concrete to themselves and others. For instance, nascent entrepreneurs often look for and purchase facilities and equipment; seek and obtain financial backing, form legal entities, organize teams; and dedicate all their time and energy to their business[94] Project-based Project entrepreneurs are individuals who are engaged in the repeated assembly or creation of temporary organizations.[95] These are organizations that have limited lifespans which are devoted to producing a singular objective or goal and get disbanded rapidly when the project ends. Industries where project-based enterprises are widespread include: sound recording, film production, software development, television production, new media and construction.[96] What makes project-entrepreneurs distinctive from a theoretical standpoint is that they have to "rewire" these temporary ventures and modify them to suit the needs of new project opportunities that emerge. A project entrepreneur who used a certain approach and team for one project may have to modify the business model or team for a subsequent project. Project entrepreneurs are exposed repeatedly to problems and tasks typical of the entrepreneurial process.[97] Indeed, project-based entrepreneurs face two critical challenges that invariably characterize the creation of a new venture: locating the right opportunity to launch the project venture and assembling the most appropriate team to exploit that opportunity. Resolving the first challenge requires project-entrepreneurs to access an extensive range of information needed to seize new investment opportunities. Resolving the second challenge requires assembling a collaborative team that has to fit well with the particular challenges of the project and has to function almost immediately to reduce the risk that performance might be adversely affected. Another type of project entrepreneurship involves entrepreneurs working with business students to get analytical work done on their ideas. Social Student organizers from the Green Club at Newcomb College Institute formed a social entrepreneurship organization in 2010. Main article: Social entrepreneurship Social entrepreneurship is the use of the by start up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues.[98] This concept may be applied to a variety of organizations with different sizes, aims, and beliefs.[99] For-profit entrepreneurs typically measure performance using business metrics like profit, revenues and increases in stock prices, but social entrepreneurs are either non-profits or blend for-profit goals with generating a positive "return to society" and therefore must use different metrics. Social entrepreneurship typically attempts to further broad social, cultural, and environmental goals often associated with the voluntary sector[100] in areas such as poverty alleviation, health care[101] and community development. At times, profit-making social enterprises may be established to support the social or cultural goals of the organization but not as an end in itself. For example, an organization that aims to provide housing and employment to the homeless may operate a restaurant, both to raise money and to provide employment for the homeless people. Biosphere Biosphere entrepreneurship is "entrepreneurial activity that generates value for the biosphere and ecosystem services."[102] It is part of a larger trend of business schools seeking to incorporate environmental topics more actively into their curricula.[103] Entrepreneurial behaviours The entrepreneur is commonly seen as an innovator—a designer of new ideas and business processes.[104] Management skills and strong team building abilities are often perceived as essential leadership attributes for successful entrepreneurs.[105][unreliable source] Political economist Robert Reich considers leadership, management ability and team-building to be essential qualities of an entrepreneur.[106][107] Uncertainty perception and risk-taking Theorists Frank Knight[108] and Peter Drucker defined entrepreneurship in terms of risk-taking. The entrepreneur is willing to put his or her career and financial security on the line and take risks in the name of an idea, spending time as well as capital on an uncertain venture. However, entrepreneurs often do not believe that they have taken an enormous amount of risks because they do not perceive the level of uncertainty to be as high as other people do. Knight classified three types of uncertainty: Risk, which is measurable statistically (such as the probability of drawing a red color ball from a jar containing five red balls and five white balls) Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing five red balls but an unknown number of white balls) True uncertainty or Knightian uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose contents, in terms of numbers of coloured balls, are entirely unknown) Entrepreneurship is often associated with true uncertainty, particularly when it involves the creation of a novel good or service, for a market that did not previously exist, rather than when a venture creates an incremental improvement to an existing product or service. A 2014 study at ETH Zürich found that compared with typical managers, entrepreneurs showed higher decision-making efficiency and a stronger activation in regions of frontopolar cortex (FPC) previously associated with explorative choice.[109] "Coachability" and advice taking The ability of entrepreneurs to work closely with and take advice from early investors and other partners (i.e. their coachability) has long been considered a critical factor in entrepreneurial success.[110] At the same time, economists have argued that entrepreneurs should not simply act on all advice given to them, even when that advice comes from well-informed sources, because entrepreneurs possess far deeper and richer local knowledge about their own firm than any outsider. Indeed, measures of coachability are not actually predictive of entrepreneurial success (e.g. measured as success in subsequent funding rounds, acquisitions, pivots and firm survival). This research also shows that older and larger founding teams, presumably those with more subject expertise, are less coachable than younger and smaller founding teams.[citation needed] Strategies Strategies that entrepreneurs may use include: Innovation of new products, services or processes[111] Continuous process improvement (CPI)[111] Exploration of new business models Finding solutions for problems Use of technology[111] Use of business intelligence Use of economical strategies Development of future products and services[111] Optimized talent management[111] Entrepreneurial marketing strategies for interactive and innovative networking[112] Designing individual/opportunity nexus According to Shane and Venkataraman, entrepreneurship comprises both "enterprising individuals" and "entrepreneurial opportunities", so researchers should study the nature of the individuals who identify opportunities when others do not, the opportunities themselves and the nexus between individuals and opportunities.[113] On the other hand, Reynolds et al.[114] argue that individuals are motivated to engage in entrepreneurial endeavours driven mainly by necessity or opportunity, that is individuals pursue entrepreneurship primarily owing to survival needs, or because they identify business opportunities that satisfy their need for achievement. For example, higher economic inequality tends to increase necessity-based entrepreneurship rates at the individual level.[115] Opportunity perception and biases One study has found that certain genes affecting personality may influence the income of self-employed people.[116] Some people may be able to use[weasel words] "an innate ability" or quasi-statistical sense to gauge public opinion[117] and market demand for new products or services. Entrepreneurs tend to have the ability to see unmet market needs and underserved markets. While some entrepreneurs assume they can sense and figure out what others are thinking, the mass media plays a crucial role in shaping views and demand.[118] Ramoglou argues that entrepreneurs are not that distinctive and that it is essentially poor conceptualizations of "non-entrepreneurs" that maintain laudatory portraits of "entrepreneurs" as exceptional innovators or leaders[119][120] Entrepreneurs are often overconfident, exhibit illusion of control, when they are opening/expanding business or new products/services.[23] Styles Differences in entrepreneurial organizations often partially reflect their founders' heterogenous identities. Fauchart and Gruber have classified entrepreneurs into three main types: Darwinians, communitarians and missionaries. These types of entrepreneurs diverge in fundamental ways in their self-views, social motivations and patterns of new firm creation.[121] Communication Entrepreneurs must practice effective communication both within their firm and with external partners and investors to launch and grow a venture and enable it to survive. An entrepreneur needs a communication system that links the staff of her firm and connects the firm to outside firms and clients. Entrepreneurs should be charismatic leaders, so they can communicate a vision effectively to their team and help to create a strong team. Communicating a vision to followers may be the most important act of the transformational leader.[122] Compelling visions provide employees with a sense of purpose and encourage commitment. According to Baum et al.[123] and Kouzes and Posner,[124] the vision must be communicated through written statements and through in-person communication. Entrepreneurial leaders must speak and listen to articulate their vision to others.[125] Communication is pivotal in the role of entrepreneurship because it enables leaders to convince potential investors, partners and employees about the feasibility of a venture.[126] Entrepreneurs need to communicate effectively to shareholders.[127] Nonverbal elements in speech such as the tone of voice, the look in the sender's eyes, body language, hand gestures and state of emotions are also important communication tools. The Communication Accommodation Theory posits that throughout communication people will attempt to accommodate or adjust their method of speaking to others.[128] Face Negotiation Theory describes how people from different cultures manage conflict negotiation to maintain "face".[129] Hugh Rank's "intensify and downplay" communications model can be used by entrepreneurs who are developing a new product or service. Rank argues that entrepreneurs need to be able to intensify the advantages of their new product or service and downplay the disadvantages to persuade others to support their venture.[130] Links to sea piracy Research from 2014 found links between entrepreneurship and historical sea piracy. In this context, the claim is made for a non-moral approach to looking at the history of piracy as a source of inspiration for entrepreneurship education[131] as well as for research in entrepreneurship[132] and business model generation.[133] Psychological makeup Ross Levine, an economist at the University of California, Berkeley, and Yona Rubinstein, a professor at the London School of Economics released a study which suggests entrepreneurs are disproportionately white, male, from wealthy and highly educated backgrounds, and prone to "aggressive, illicit, risk-taking activities" as teenagers and young adults. Entrepreneurs also performed above average on aptitude tests.[134] This masculine image is also found when studying how male entrepreneurs are represented in media. A supporting but invisible family are one of the success factors when being portrayed as a male entrepreneur in media.[135] A study conducted by the Census Bureau and two MIT professors, after compiling a list of 2.7 million company founders who hired at least one employee between 2007 and 2014, found the average age of a successful start-up founder when he or she founded it is 45. They consistently found chances of entrepreneurial success rises with age.[136][137] Apple co-founder and longtime leader Steve Jobs (pictured in 2010) led the introduction of many innovations in the computer, smartphone and digital music industries. Stanford University economist Edward Lazear found in a 2005 study that variety in education and in work experience was the most important trait that distinguished entrepreneurs from non-entrepreneurs[138] A 2013 study by Uschi Backes-Gellner of the University of Zurich and Petra Moog of the University of Siegen in Germany found that a diverse social network was also an important characteristic of students that would go on to become entrepreneurs.[139][140] Studies show that the psychological propensities for male and female entrepreneurs are more similar than different. Empirical studies suggest that female entrepreneurs possess strong negotiating skills and consensus-forming abilities.[141] Åsa Hansson, who looked at empirical evidence from Sweden, found that the probability of becoming self-employed decreases with age for women, but increases with age for men.[142] She also found that marriage increased the probability of a person's becoming an entrepreneur.[142] Jesper Sørensen wrote in 2010 that significant influences on the decision to become an entrepreneur include workplace peers and social composition. Sørensen discovered a correlation between working with former entrepreneurs and how often these individuals become entrepreneurs themselves, compared to those who did not work with entrepreneurs.[143] Social composition can influence entrepreneurialism in peers by demonstrating the possibility for success, stimulating a "He can do it, why can't I?" attitude. As Sørensen stated: "When you meet others who have gone out on their own, it doesn't seem that crazy."[144] Entrepreneurs may also be driven to entrepreneurship by past experiences. If someone has faced multiple work stoppages or has been unemployed in the past, the probability of becoming an entrepreneur increases[142] Per Cattell's personality framework, both personality traits and attitudes are thoroughly investigated by psychologists. However, in case of entrepreneurship research these notions are employed by academics[which?] too, but vaguely. Cattell states that personality is a system that is related to the environment and further adds that the system seeks explanation to the complex transactions conducted by both—traits and attitudes. This is because both of them bring about change and growth in a person. Personality is that which informs what an individual will do when faced with a given situation. A person's response is triggered by his/her personality and the situation that is faced.[145] Innovative entrepreneurs may be more likely to experience what psychologist Mihaly Csikszentmihalyi calls "flow". "Flow" occurs when an individual forgets about the outside world due to being thoroughly engaged in a process or activity. Csikszentmihalyi suggested that breakthrough innovations tend to occur at the hands of individuals in that state.[146] Other research has concluded that a strong internal motivation is a vital ingredient for breakthrough innovation.[147] Flow can be compared to Maria Montessori's concept of normalization, a state that includes a child's capacity for joyful and lengthy periods of intense concentration.[148] Csikszentmihalyi acknowledged that Montessori's prepared environment offers children opportunities to achieve flow.[149] Thus quality and type of early education may influence entrepreneurial capability.[citation needed] Research on high-risk settings such as oil platforms, investment banking, medical surgery, aircraft piloting and nuclear-power plants has related distrust to failure avoidance.[150] When non-routine strategies are needed, distrusting persons perform better, while when routine strategies are needed trusting persons perform better. Gudmundsson and Lechner extended this research to entrepreneurial firms.[151] They argued that in entrepreneurial firms the threat of failure is ever-present, resembling non-routine situations in high-risk settings. They found that the firms of distrusting entrepreneurs were more likely to survive than the firms of optimistic or overconfident entrepreneurs. The reasons were that distrusting entrepreneurs would emphasize failure-avoidance through sensible task selection and more analysis. Kets de Vries has pointed out that distrusting entrepreneurs are more alert about their external environment.[152] He concluded that distrusting entrepreneurs are less likely to discount negative events and are more likely to engage control mechanisms. Similarly, Gudmundsson and Lechner found that distrust leads to higher precaution and therefore increases chances of entrepreneurial-firm survival. Researchers Schoon and Duckworth completed a study in 2012 that could potentially help identify who may become an entrepreneur at an early age. They determined that the best measures to identify a young entrepreneur are family and social status, parental role-modelling, entrepreneurial competencies at age 10, academic attainment at age 10, generalized self-efficacy, social skills, entrepreneurial intention and experience of unemployment.[153] Strategic entrepreneurship Some scholars have constructed an operational definition of a more specific subcategory called "Strategic Entrepreneurship". Closely tied with principles of strategic management, this form of entrepreneurship is "concerned about growth, creating value for customers and subsequently creating wealth for owners".[154] A 2011 article for the Academy of Management provided a three-step, "Input-Process-Output" model of strategic entrepreneurship. The model's three steps entail the collection of different resources, the process of orchestrating them in the necessary manner and the subsequent creation of competitive advantage, value for customers, wealth and other benefits. Through the proper use of strategic management/leadership techniques and the implementation of risk-bearing entrepreneurial thinking, the strategic entrepreneur is, therefore, able to align resources to create value and wealth.[154] Leadership Leadership in entrepreneurship can be defined as "process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task"[155] in "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods".[156][page needed] This refers to not only the act of entrepreneurship as managing or starting a business, but how one manages to do so by these social processes, or leadership skills. (Entrepreneurship in itself can be defined somewhat circularly as "the process by which individuals, teams, or organizations identify and pursue entrepreneurial opportunities without being immediately constrained by the resources they currently control".[157]) An entrepreneur typically has a mindset that seeks out potential opportunities during uncertain times.[157] An entrepreneur must have leadership skills or qualities to see potential opportunities and act upon them.[citation needed] At the core, an entrepreneur is a decision-maker.[citation needed] Such decisions often affect an organization as a whole, which is representative of entrepreneurial leadership within the organization.[citation needed] With the growing global market and increasing technology use throughout all industries, the core of entrepreneurship and the decision-making has become an ongoing process rather than isolated incidents.[citation needed] This becomes knowledge management,[citation needed] which is "identifying and harnessing intellectual assets" for organizations to "build on past experiences and create new mechanisms for exchanging and creating knowledge".[158] This belief[which?] draws upon a leader's past experiences that may prove useful. It is a common mantra for one to learn from their past mistakes, so leaders should take advantage of their failures for their benefit.[citation needed] This is how one may take their experiences as a leader for the use in the core of entrepreneurship decision-making.[citation needed] Global leadership The majority of scholarly research done on these topics has taken place in North America.[159] Words like "leadership" and "entrepreneurship" do not always translate well into other cultures and languages. For example, in North America a leader is often thought of as charismatic, but German culture frowns on such charisma due to the charisma of Nazi leader Adolf Hitler (1889–1945). Other cultures, as in some European countries, view the term "leader" negatively, like the French.[160][need quotation to verify] The participative leadership style that is prevalent in the United States is considered disrespectful in many other parts of the world due to the differences in power distance.[161] Many Asian and Middle Eastern countries do not have "open door" policies for subordinates, who would never informally approach their managers/bosses. For countries like that, an authoritarian approach to management and leadership is more customary.[citation needed] Despite cultural differences, the successes and failures of entrepreneurs can be traced to how leaders adapt to local conditions.[162] Within the increasingly global business environment a successful leader must be able to adapt and have insight into other cultures. To respond to the environment, corporate visions are becoming transnational in nature, to enable the organization to operate in or provide services/goods for other cultures.[163] Entrepreneurship training and education Michelacci and Schivardi are a pair of researchers who believe that identifying and comparing the relationships between an entrepreneur's earnings and education level would determine the rate and level of success. Their study focused on two education levels, college degree and post-graduate degree. While Michelacci and Schivardi do not specifically determine characteristics or traits for successful entrepreneurs, they do believe that there is a direct relationship between education and success, noting that having a college knowledge does contribute to advancement in the workforce.[164] Michelacci and Schivardi state there has been a rise in the number of self-employed people with a baccalaureate degree. However, their findings also show that those who are self-employed and possess a graduate degree has remained consistent throughout time at about 33 percent. They briefly mention those famous entrepreneurs like Steve Jobs and Mark Zuckerberg who were college dropouts, but they call these cases all but exceptional as it is a pattern that many entrepreneurs view formal education as costly, mainly because of the time that needs to be spent on it. In the 21st century, a young Danish entrepreneur, Maniyar, had become famous while perusing his Bachelors of Pharmacy. There are few entrepreneurs that are also college dropouts, like Mark Zuckerberg however, Maniyar's ability and volition while studying would allow him to create a functioning business.[10] Michelacci and Schivardi believe that for an individual to reach the full success they need to have education beyond high school. Their research shows that the higher the education level the greater the success. The reason is that college gives people additional skills that can be used within their business and to operate on a higher level than someone who only "runs" it.[164] Recent trends that seek to merge neurosciences into entrepreneurship Currently it refers to the concept of "Entrepreneurial Enhancement", which refers to "the progressive improvement of cognitive, affective and conative skills in potential entrepreneurs or existing ones using appropriate neurotechnologies". The term has been coined by engineer Víctor Pérez Centeno, in relation to the need to fuse neurotechnologies in research, education and the empowerment of entrepreneurial perf

THR WORLD VOTE FOR DONALD TRUMP 2024 Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021. Trump received a Bachelor of Science in economics from the University of Pennsylvania in 1968, and his father named him president of his real estate business in 1971. Trump renamed it the Trump Organization and reoriented the company toward building and renovating skyscrapers, hotels, casinos, and golf courses. After a series of business failures in the late twentieth century, he successfully launched side ventures that required little capital, mostly by licensing the Trump name. From 2004 to 2015, he co-produced and hosted the reality television series The Apprentice. He and his businesses have been plaintiff or defendant in more than 4,000 state and federal legal actions, including six business bankruptcies. Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote.[a] During the campaign, his political positions were described as populist, protectionist, isolationist, and nationalist. His election and policies sparked numerous protests. He was the first U.S. president with no prior military or government experience. The 2017–2019 special counsel investigation established that Russia had interfered in the 2016 election to favor Trump's campaign. Trump promoted conspiracy theories and made many false and misleading statements during his campaigns and presidency, to a degree unprecedented in American politics. Many of his comments and actions have been characterized as racially charged or racist and many as misogynistic. As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.-Mexico border, and implemented a policy of family separations for migrants detained at the U.S. border. He weakened environmental protections, rolling back more than 100 environmental policies and regulations. He signed the Tax Cuts and Jobs Act of 2017, which cut taxes for individuals and businesses and rescinded the individual health insurance mandate penalty of the Affordable Care Act. He appointed Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett to the U.S. Supreme Court. He reacted slowly to the COVID-19 pandemic, ignored or contradicted many recommendations from health officials, used political pressure to interfere with testing efforts, and spread misinformation about unproven treatments. Trump initiated a trade war with China and withdrew the U.S. from the proposed Trans-Pacific Partnership trade agreement, the Paris Agreement on climate change, and the Iran nuclear deal. He met with North Korean leader Kim Jong Un three times but made no progress on denuclearization. Trump refused to concede after losing the 2020 presidential election to Joe Biden, falsely claiming widespread electoral fraud, and attempted to overturn the results by pressuring government officials, mounting scores of unsuccessful legal challenges, and obstructing the presidential transition. On January 6, 2021, he urged his supporters to march to the U.S. Capitol, which many of them then attacked, resulting in multiple deaths and interrupting the electoral vote count. Trump is the only American president to have been impeached twice. After he tried to pressure Ukraine in 2019 to investigate Biden, he was impeached by the House of Representatives for abuse of power and obstruction of Congress; he was acquitted by the Senate in February 2020. The House impeached him again in January 2021, for incitement of insurrection, and the Senate acquitted him in February. Scholars and historians rank Trump as one of the worst presidents in American history.[1][2] Since leaving office, Trump has remained the de facto leader of the Republican Party and is a candidate in the 2024 Republican presidential primaries. In 2023, a jury found that Trump sexually abused a woman. He was also indicted in New York on 34 felony counts of falsifying business records, in Florida on 40 felony counts related to his mishandling of classified documents, in Washington, D.C., on four felony counts of conspiracy and obstruction for efforts to overturn the 2020 presidential election, and in Georgia on 13 charges of racketeering and other alleged felonies committed in an effort to overturn the state's 2020 election results. Trump pleaded not guilty to all charges. Personal life Early life A black-and-white photograph of Donald Trump as a teenager, smiling, wearing a dark pseudo-military uniform with various badges and a light-colored stripe crossing his right shoulder Trump at the New York Military Academy in 1964 Donald John Trump was born on June 14, 1946, at Jamaica Hospital in Queens, New York City,[3] the fourth child of Fred Trump, a Bronx-born real estate developer whose parents were German immigrants, and Mary Anne MacLeod Trump, an immigrant from Scotland. Trump grew up with older siblings Maryanne, Fred Jr., and Elizabeth and younger brother Robert in the Jamaica Estates neighborhood of Queens, and attended the private Kew-Forest School from kindergarten through seventh grade.[4][5][6] At age 13, he was enrolled at the New York Military Academy, a private boarding school,[7] and, in 1964, he enrolled at Fordham University. Two years later, he transferred to the Wharton School of the University of Pennsylvania, graduating in May 1968 with a Bachelor of Science in economics.[8][9] In 2015, Trump's lawyer Michael Cohen threatened Trump's colleges, high school, and the College Board with legal action if they released Trump's academic records.[10] While in college, Trump obtained four student draft deferments during the Vietnam War era.[11] In 1966, he was deemed fit for military service based upon a medical examination, and in July 1968, a local draft board classified him as eligible to serve.[12] In October 1968, he was classified 1-Y, a conditional medical deferment,[13] and in 1972, he was reclassified 4-F due to bone spurs, permanently disqualifying him from service.[14] Family Main article: Family of Donald Trump In 1977, Trump married Czech model Ivana Zelníčková.[15] They had three children: Donald Jr. (born 1977), Ivanka (born 1981), and Eric (born 1984). Ivana became a naturalized United States citizen in 1988.[16] The couple divorced in 1990, following Trump's affair with actress Marla Maples.[17] Trump and Maples married in 1993 and divorced in 1999. They have one daughter, Tiffany (born 1993), who was raised by Marla in California.[18] In 2005, Trump married Slovenian model Melania Knauss.[19] They have one son, Barron (born 2006).[20] Melania gained U.S. citizenship in 2006.[21] Religion Trump went to Sunday school and was confirmed in 1959 at the First Presbyterian Church in Jamaica, Queens.[22][23] In the 1970s, his parents joined the Marble Collegiate Church in Manhattan, which belongs to the Reformed Church in America.[22][24] The pastor at Marble, Norman Vincent Peale,[22] ministered to the family until his death in 1993.[24] Trump has described him as a mentor.[25] In 2015, the church stated that Trump was not an active member.[23] In 2019, he appointed his personal pastor, televangelist Paula White, to the White House Office of Public Liaison.[26] In 2020, he said he identified as a non-denominational Christian.[27] Health habits Trump has called golfing his "primary form of exercise" but usually does not walk the course.[28] He considers exercise a waste of energy because he believes exercise depletes the body's energy "like a battery, with a finite amount of energy".[29] In 2015, Trump's campaign released a letter from his longtime personal physician, Harold Bornstein, stating that Trump would "be the healthiest individual ever elected to the presidency".[30] In 2018, Bornstein said Trump had dictated the contents of the letter and that three Trump agents had seized his medical records in a February 2017 raid on the doctor's office.[30][31] Wealth Main article: Wealth of Donald Trump Ivana Trump and King Fahd shake hands, with Ronald Reagan standing next to them smiling. All are in black formal attire. Trump (far right) and wife Ivana in the receiving line of a state dinner for King Fahd of Saudi Arabia in 1985, with U.S. president Ronald Reagan and First Lady Nancy Reagan In 1982, Trump made the initial Forbes list of wealthy people for holding a share of his family's estimated $200 million net worth (equivalent to $606 million in 2022).[32] His losses in the 1980s dropped him from the list between 1990 and 1995.[33] After filing the mandatory financial disclosure report with the FEC in July 2015, he announced a net worth of about $10 billion. Records released by the FEC showed at least $1.4 billion in assets and $265 million in liabilities.[34] Forbes estimated his net worth dropped by $1.4 billion between 2015 and 2018.[35] In their 2021 billionaires ranking, Trump's net worth was estimated to be $2.4 billion (1,299th in the world).[36] Journalist Jonathan Greenberg reported that Trump called him in 1984, pretending to be a fictional Trump Organization official named "John Barron". Greenberg said that Trump, speaking as "Barron", falsely asserted that he owned more than 90 percent of his father's business to get a higher ranking for himself on the Forbes 400 list of wealthy Americans. Greenberg also wrote that Forbes had vastly overestimated Trump's wealth and wrongly included him on the Forbes 400 rankings of 1982, 1983, and 1984.[37] Trump has often said he began his career with "a small loan of one million dollars" from his father and that he had to pay it back with interest.[38] He was a millionaire by age eight, borrowed at least $60 million from his father, largely failed to repay those loans, and received another $413 million (2018 dollars adjusted for inflation) from his father's company.[39][40] In 2018, he and his family were reported to have committed tax fraud, and the New York State Department of Taxation and Finance started an investigation.[40] His investments underperformed the stock and New York property markets.[41][42] Forbes estimated in October 2018 that his net worth declined from $4.5 billion in 2015 to $3.1 billion in 2017 and his product-licensing income from $23 million to $3 million.[43] Contrary to his claims of financial health and business acumen, Trump's tax returns from 1985 to 1994 show net losses totaling $1.17 billion. The losses were higher than those of almost every other American taxpayer. The losses in 1990 and 1991, more than $250 million each year, were more than double those of the nearest taxpayers. In 1995, his reported losses were $915.7 million (equivalent to $1.76 billion in 2022).[44][45][32] In 2020, the New York Times obtained Trump's tax information extending over two decades. Its reporters found that Trump reported losses of hundreds of millions of dollars and had, since 2010, deferred declaring $287 million in forgiven debt as taxable income. His income mainly came from his share in The Apprentice and businesses in which he was a minority partner, and his losses mainly from majority-owned businesses. Much income was in tax credits for his losses, which let him avoid annual income tax payments or lower them to $750. During the 2010s, Trump balanced his businesses' losses by selling and borrowing against assets, including a $100 million mortgage on Trump Tower (due in 2022) and the liquidation of over $200 million in stocks and bonds. He personally guaranteed $421 million in debt, most of which is due by 2024.[46] As of October 2021, Trump had over $1.3 billion in total debts, much of which is secured by his assets.[47] In 2020, he owed $640 million to banks and trust organizations, including Bank of China, Deutsche Bank, and UBS, and approximately $450 million to unknown creditors. The value of his assets exceeds his debt.[48] Business career Main article: Business career of Donald Trump Further information: Business projects of Donald Trump in Russia Real estate Exterior ground view of Trump tower, a contemporary skyscraper with a glass curtain and stepped façade Trump Tower in Midtown Manhattan Starting in 1968, Trump was employed at his father's real estate company, Trump Management, which owned racially segregated middle-class rental housing in New York City's outer boroughs.[49][50] In 1971, he became president of the company and began using the Trump Organization as an umbrella brand.[51] Between 1991 and 2009, he filed for Chapter 11 bankruptcy protection for six of his businesses, the Plaza Hotel in Manhattan, the casinos in Atlantic City, New Jersey, and the Trump Hotels & Casino Resorts company.[52] Manhattan developments Trump attracted public attention in 1978 with the launch of his family's first Manhattan venture, the renovation of the derelict Commodore Hotel, adjacent to Grand Central Terminal.[53] The financing was facilitated by a $400 million city property tax abatement arranged for Trump by his father who also, jointly with Hyatt, guaranteed a $70 million bank construction loan.[50][54] The hotel reopened in 1980 as the Grand Hyatt Hotel,[55] and that same year, Trump obtained rights to develop Trump Tower, a mixed-use skyscraper in Midtown Manhattan.[56] The building houses the headquarters of the Trump Corporation and Trump's PAC and was Trump's primary residence until 2019.[57][58] In 1988, Trump acquired the Plaza Hotel with a loan from a consortium of sixteen banks.[59] The hotel filed for bankruptcy protection in 1992, and a reorganization plan was approved a month later, with the banks taking control of the property.[60] In 1995, Trump defaulted on over $3 billion of bank loans, and the lenders seized the Plaza Hotel along with most of his other properties in a humiliating restructuring that allowed Trump to avoid personal bankruptcy.[61][62] The lead bank's attorney said of the banks' decision that they "all agreed that he'd be better alive than dead."[62] In 1996, Trump acquired the mostly vacant 71-story skyscraper at 40 Wall Street, later rebranded as the Trump Building, and renovated it.[63] In the early 1990s, Trump won the right to develop a 70-acre (28 ha) tract in the Lincoln Square neighborhood near the Hudson River. Struggling with debt from other ventures in 1994, Trump sold most of his interest in the project to Asian investors, who were able to finance the project's completion, Riverside South.[64] Atlantic City casinos The entrance of the Trump Taj Mahal, a casino in Atlantic City. It has motifs evocative of the Taj Mahal in India. Entrance of the Trump Taj Mahal in Atlantic City In 1984, Trump opened Harrah's at Trump Plaza, a hotel and casino, with financing and management help from the Holiday Corporation.[65] It was unprofitable, and Trump paid Holiday $70 million in May 1986 to take sole control.[66] In 1985, Trump bought the unopened Atlantic City Hilton Hotel and renamed it Trump Castle.[67] His wife Ivana managed it until 1988.[68] Both casinos filed for Chapter 11 bankruptcy protection in 1992.[69] Trump bought a third Atlantic City venue in 1988, the Trump Taj Mahal. It was financed with $675 million in junk bonds and completed for $1.1 billion, opening in April 1990.[70][71] Trump filed for Chapter 11 bankruptcy protection in 1991. Under the provisions of the restructuring agreement, Trump gave up half his initial stake and personally guaranteed future performance.[72] To reduce his $900 million of personal debt, he sold the Trump Shuttle airline; his megayacht, the Trump Princess, which had been leased to his casinos and kept docked; and other businesses.[73] In 1995, Trump founded Trump Hotels & Casino Resorts (THCR), which assumed ownership of the Trump Plaza.[74] THCR purchased the Taj Mahal and the Trump Castle in 1996 and went bankrupt in 2004 and 2009, leaving Trump with 10 percent ownership.[65] He remained chairman until 2009.[75] Mar-a-Lago Main article: Mar-a-Lago In 1985, Trump acquired the Mar-a-Lago estate in Palm Beach, Florida.[76] In 1995, he converted the estate into a private club with an initiation fee and annual dues. He continued to use a wing of the house as a private residence.[77] In 2019, Trump declared Mar-a-Lago his primary residence.[58] Golf courses Main article: Donald Trump and golf The Trump Organization began building and buying golf courses in 1999.[78] It owns fourteen and manages another three Trump-branded courses worldwide.[78][79] Trump visited a Trump Organization property on 428 (nearly one in three) of the 1,461 days of his presidency and is estimated to have played 261 rounds of golf, one every 5.6 days.[80] Licensing of the Trump brand See also: List of things named after Donald Trump The Trump name has been licensed for various consumer products and services, including foodstuffs, apparel, adult learning courses, and home furnishings.[81][82] According to an analysis by The Washington Post, there are more than 50 licensing or management deals involving Trump's name, and they have generated at least $59 million in revenue for his companies.[83] By 2018, only two consumer goods companies continued to license his name.[81] Side ventures Trump, Doug Flutie, and an unnamed official standing behind a lectern with big, round New Jersey Generals sign, with members of the press seated in the background Trump and New Jersey Generals quarterback Doug Flutie at a 1985 press conference in the lobby of Trump Tower In September 1983, Trump purchased the New Jersey Generals, a team in the United States Football League. After the 1985 season, the league folded, largely due to Trump's strategy of moving games to a fall schedule (when they competed with the NFL for audience) and trying to force a merger with the NFL by bringing an antitrust suit against the organization.[84][85] Trump's businesses have hosted several boxing matches at the Atlantic City Convention Hall, adjacent to and promoted as taking place at the Trump Plaza in Atlantic City.[86][87] In 1989 and 1990, Trump lent his name to the Tour de Trump cycling stage race, which was an attempt to create an American equivalent of European races such as the Tour de France or the Giro d'Italia.[88] From 1986 to 1988, Trump purchased significant blocks of shares in various public companies while suggesting that he intended to take over the company and then sold his shares for a profit,[44] leading some observers to think he was engaged in greenmail.[89] The New York Times found that Trump initially made millions of dollars in such stock transactions, but later "lost most, if not all, of those gains after investors stopped taking his takeover talk seriously".[44] In 1988, Trump purchased the Eastern Air Lines Shuttle, financing the purchase with $380 million (equivalent to $940 million in 2022)[32] in loans from a syndicate of 22 banks. He renamed the airline Trump Shuttle and operated it until 1992.[90] Trump defaulted on his loans in 1991, and ownership passed to the banks.[91] The airline was eventually sold to US Airways.[90] A red star with a bronze outline and "Donald Trump" and a TV icon written on it in bronze, embedded in a black terrazzo sidewalk Trump's star on the Hollywood Walk of Fame In 1992, Trump, his siblings Maryanne, Elizabeth, and Robert, and his cousin John W. Walter, each with a 20 percent share, formed All County Building Supply & Maintenance Corp. The company had no offices and is alleged to have been a shell company for paying the vendors providing services and supplies for Trump's rental units, then billing those services and supplies to Trump Management with markups of 20–50 percent and more. The owners shared the proceeds generated by the markups.[40][92] The increased costs were used as justification to get state approval for increasing the rents of Trump's rent-stabilized units.[40] From 1996 to 2015, Trump owned all or part of the Miss Universe pageants, including Miss USA and Miss Teen USA.[93][94] Due to disagreements with CBS about scheduling, he took both pageants to NBC in 2002.[95][96] In 2007, Trump received a star on the Hollywood Walk of Fame for his work as producer of Miss Universe.[97] NBC and Univision dropped the pageants from their broadcasting lineups in June 2015.[98] Trump University Main article: Trump University In 2004, Trump co-founded Trump University, a company that sold real estate training courses priced from $1,500 to $35,000.[99] After New York State authorities notified the company that its use of the word "university" violated state law (as it was not an academic institution), its name was changed to the Trump Entrepreneur Initiative in 2010.[100] In 2013, the State of New York filed a $40 million civil suit against Trump University, alleging that the company made false statements and defrauded consumers.[101] In addition, two class actions were filed in federal court against Trump and his companies. Internal documents revealed that employees were instructed to use a hard-sell approach, and former employees testified that Trump University had defrauded or lied to its students.[102][103][104] Shortly after he won the 2016 presidential election, Trump agreed to pay a total of $25 million to settle the three cases.[105] Foundation Main article: Donald J. Trump Foundation The Donald J. Trump Foundation was a private foundation established in 1988.[106][107] In the foundation's final years, its funds mostly came from donors other than Trump, who did not donate any personal funds to the charity from 2009 until 2014.[108] The foundation gave to health-care- and sports-related charities, as well as conservative groups.[109] In 2016, The Washington Post reported that the charity committed several potential legal and ethical violations, including alleged self-dealing and possible tax evasion.[110] Also in 2016, the New York Attorney General determined the foundation to be in violation of state law for soliciting donations and ordered it to immediately cease its fundraising activities in New York.[111] Trump's team announced in December 2016 that the foundation would be dissolved.[112] In June 2018, the New York attorney general's office filed a civil suit against the foundation, Trump, and his adult children, seeking $2.8 million in restitution and additional penalties.[113][114] In December 2018, the foundation ceased operation and disbursed its assets to other charities.[115] In November 2019, a New York state judge ordered Trump to pay $2 million to a group of charities for misusing the foundation's funds, in part to finance his presidential campaign.[116][117] Legal affairs and bankruptcies Main article: Legal affairs of Donald Trump Roy Cohn was Trump's fixer, lawyer, and mentor for 13 years in the 1970s and 1980s.[118] According to Trump, Cohn sometimes waived fees due to their friendship.[118] In 1973, Cohn helped Trump countersue the United States government for $100 million (equivalent to $659 million in 2022)[32] over its charges that Trump's properties had racial discriminatory practices. Trump's counterclaims were dismissed, and the government's case went forward, ultimately resulting in a settlement.[119] In 1975, an agreement was struck requiring Trump's properties to furnish the New York Urban League with a list of all apartment vacancies, every week for two years, among other things.[120] Cohn introduced political consultant Roger Stone to Trump, who enlisted Stone's services to deal with the federal government.[121] According to a review of state and federal court files conducted by USA Today in 2018, Trump and his businesses had been involved in more than 4,000 state and federal legal actions.[122] While Trump has not filed for personal bankruptcy, his over-leveraged hotel and casino businesses in Atlantic City and New York filed for Chapter 11 bankruptcy protection six times between 1991 and 2009.[123] They continued to operate while the banks restructured debt and reduced Trump's shares in the properties.[123] During the 1980s, more than 70 banks had lent Trump $4 billion.[124] After his corporate bankruptcies of the early 1990s, most major banks, with the exception of Deutsche Bank, declined to lend to him.[125] After the January 6 United States Capitol attack, the bank decided not to do business with Trump or his company in the future.[126] Media career Main article: Media career of Donald Trump Books Main article: Bibliography of Donald Trump Using ghostwriters, Trump has produced up to 19 books on business, financial, or political topics under his name.[127] His first book, The Art of the Deal (1987), was a New York Times Best Seller. While Trump was credited as co-author, the entire book was written by Tony Schwartz.[128] According to The New Yorker, "The book expanded Trump's renown far beyond New York City, making him an emblem of the successful tycoon."[128] Trump has called the volume his second favorite book, after the Bible.[129] Film and television Main article: Media career of Donald Trump Trump made cameo appearances in many films and television shows from 1985 to 2001.[130] Trump had a sporadic relationship with the professional wrestling promotion WWE since the late 1980s.[131] He appeared at WrestleMania 23 in 2007 and was inducted into the celebrity wing of the WWE Hall of Fame in 2013.[132] Trump, in a suit, sits in a crowded baseball stadium Trump at a New York Mets baseball game in 2009 Starting in the 1990s, Trump was a guest about 24 times on the nationally syndicated Howard Stern Show.[133] He also had his own short form talk radio program called Trumped! (one to two minutes on weekdays) from 2004 to 2008.[134][135] From 2011 until 2015, he was a weekly unpaid guest commentator on Fox & Friends.[136][137] From 2004 to 2015, Trump was co-producer and host of reality shows The Apprentice and The Celebrity Apprentice. Trump played a flattering, highly fictionalized version of himself as a superrich and successful chief executive who eliminated contestants with the catchphrase "You're fired". The shows remade his image for millions of viewers nationwide.[138][139] With the related licensing agreements, they earned him more than $400 million which he invested in largely unprofitable businesses.[140] In February 2021, Trump resigned from the Screen Actors Guild he had been a member of since 1989 rather than face a disciplinary committee hearing for inciting the January 6, 2021, mob attack on the U.S. Capitol and for his "reckless campaign of misinformation aimed at discrediting and ultimately threatening the safety of journalists".[141] Two days later, the union permanently barred him from readmission.[142] Political career Further information: Political career of Donald Trump Donald Trump shakes hands with Bill Clinton in a lobby; Trump is speaking and Clinton is smiling, and both are wearing suits. Trump and President Bill Clinton in June 2000 Trump's political party affiliation has changed numerous times. He registered as a Republican in 1987;[143] a member of the Independence Party, the New York state affiliate of the Reform Party, in 1999;[144] a Democrat in 2001; a Republican in 2009; unaffiliated in 2011; and a Republican in 2012.[143] In 1987, Trump placed full-page advertisements in three major newspapers,[145] expressing his views on foreign policy and on how to eliminate the federal budget deficit.[146] He ruled out running for local office but not for the presidency.[145] In 1988, he approached Lee Atwater, asking to be put into consideration to be Republican nominee George H. W. Bush's running mate. Bush found the request "strange and unbelievable".[147] Presidential campaigns (2000–2016) In 2000, Trump ran in the California and Michigan primaries for nomination as the Reform Party candidate for the 2000 United States presidential election but withdrew from the race in February 2000.[148][149][150] A July 1999 poll matching him against likely Republican nominee George W. Bush and likely Democratic nominee Al Gore showed Trump with seven percent support.[151] Trump, leaning heavily onto a lectern, with his mouth open mid-speech and a woman clapping politely next to him Trump speaking at CPAC 2011 In 2011, Trump speculated about running against President Barack Obama in the 2012 election, making his first speaking appearance at the Conservative Political Action Conference (CPAC) in February 2011 and giving speeches in early primary states.[152][153] In May 2011, he announced he would not run,[152] and he endorsed Mitt Romney in February 2012.[154] Trump's presidential ambitions were generally not taken seriously at the time.[155] 2016 presidential campaign Main article: Donald Trump 2016 presidential campaign Further information: 2016 Republican Party presidential primaries and 2016 United States presidential election § General election campaign Trump's fame and provocative statements earned him an unprecedented amount of free media coverage, elevating his standing in the Republican primaries.[156] He adopted the phrase "truthful hyperbole", coined by his ghostwriter Tony Schwartz, to describe his public speaking style.[128][157] His campaign statements were often opaque and suggestive,[158] and a record number of them were false.[159][160][161] The Los Angeles Times wrote, "Never in modern presidential politics has a major candidate made false statements as routinely as Trump has."[162][163] Trump said he disdained political correctness and frequently made claims of media bias.[164][165] Trump speaking in front of an American flag behind a lectern, wearing a black suit and red hat. The lectern sports a blue "TRUMP" sign. Trump campaigning in Arizona, March 2016 Trump announced his candidacy in June 2015.[166][167] His campaign was initially not taken seriously by political analysts, but he quickly rose to the top of opinion polls.[168] He became the front-runner in March 2016[169] and was declared the presumptive Republican nominee in May.[170] Hillary Clinton led Trump in national polling averages throughout the campaign, but, in early July, her lead narrowed.[171][172] In mid-July Trump selected Indiana governor Mike Pence as his vice presidential running mate,[173] and the two were officially nominated at the 2016 Republican National Convention.[174] Trump and Clinton faced off in three presidential debates in September and October 2016. Trump twice refused to say whether he would accept the result of the election.[175] Campaign rhetoric and political positions Main article: Political positions of Donald Trump Trump's political positions and his rhetoric were right-wing populist.[176][177][178] Politico described them as "eclectic, improvisational and often contradictory", quoting a health-care policy expert at the American Enterprise Institute as saying that his political positions were "a total random assortment of whatever plays publicly".[179] NBC News counted "141 distinct shifts on 23 major issues" during his campaign.[180] Trump questioned the need for NATO and espoused views that were described as isolationist, non-interventionist, and protectionist.[181] His campaign platform emphasized renegotiating U.S.–China relations and free trade agreements such as NAFTA and the Trans-Pacific Partnership, strongly enforcing immigration laws, and building a new wall along the U.S.–Mexico border. Other campaign positions included pursuing energy independence while opposing climate change regulations such as the Clean Power Plan and the Paris Agreement, modernizing and expediting services for veterans, repealing and replacing the Affordable Care Act, abolishing Common Core education standards, investing in infrastructure, simplifying the tax code while reducing taxes for all economic classes, and imposing tariffs on imports by companies that offshore jobs. He advocated a largely non-interventionist approach to foreign policy while increasing military spending, extreme vetting or banning immigrants from Muslim-majority countries[182] to pre-empt domestic Islamic terrorism, and aggressive military action against the Islamic State of Iraq and the Levant. He described NATO as "obsolete".[183][184] Trump helped bring far-right fringe ideas, beliefs, and organizations into the mainstream.[185] Trump was slow to disavow an endorsement from David Duke after he was questioned about it during a CNN interview on February 28, 2016.[186] Duke enthusiastically supported Trump and said he and like-minded people voted for Trump because of his promises to "take our country back".[187][188] In August 2016, Trump hired Steve Bannon, the executive chairman of Breitbart News—described by Bannon as "the platform for the alt-right"—as his campaign CEO.[189] The alt-right movement coalesced around and supported Trump's candidacy, due in part to its opposition to multiculturalism and immigration.[190][191][192] Financial disclosures Further information: Tax returns of Donald Trump Trump's FEC-required reports listed assets above $1.4 billion and outstanding debts of at least $315 million.[34][193] Trump did not release his tax returns, contrary to the practice of every major candidate since 1976 and his promises in 2014 and 2015 to do so if he ran for office.[194][195] He said his tax returns were being audited, and that his lawyers had advised him against releasing them.[196] After a lengthy court battle to block release of his tax returns and other records to the Manhattan district attorney for a criminal investigation, including two appeals by Trump to the United States Supreme Court, in February 2021 the high court allowed the records to be released to the prosecutor for review by a grand jury.[197][198] In October 2016, portions of Trump's state filings for 1995 were leaked to a reporter from The New York Times. They show that Trump had declared a loss of $916 million that year, which could have let him avoid taxes for up to 18 years.[199] Election to the presidency Main article: 2016 United States presidential election Electoral college map, depicting Trump winning many states in the South and Midwest and Biden winning many states in the Northeast and Pacific West 2016 electoral vote results. Trump won 304–227 On November 8, 2016, Trump received 306 pledged electoral votes versus 232 for Clinton, though, after elector defections on both sides, the official count was ultimately 304 to 227.[200] Trump, the fifth person to be elected president while losing the popular vote, received nearly 2.9 million fewer votes than Clinton.[201] He also was the only president who neither served in the military nor held any government office prior to becoming president.[202] Trump's victory was a political upset.[203] Polls had consistently shown Clinton with a nationwide—though diminishing—lead, as well as an advantage in most of the competitive states. Trump's support had been modestly underestimated, while Clinton's had been overestimated.[204] Trump won 30 states, including Michigan, Pennsylvania, and Wisconsin, states which had been considered a blue wall of Democratic strongholds since the 1990s. Clinton won 20 states and the District of Columbia. Trump's victory marked the return of an undivided Republican government—a Republican White House combined with Republican control of both chambers of Congress.[205] Pennsylvania Ave., completely packed with protesters, mostly women, many wearing pink and holding signs with progressive feminist slogans Women's March in Washington on January 21, 2017 Trump's election victory sparked protests in major U.S. cities in the days following the election.[206][207] On the day after Trump's inauguration, an estimated 2.6 million people worldwide, including an estimated half million in Washington, D.C., protested against Trump in the Women's Marches.[208] Presidency (2017–2021) Main article: Presidency of Donald Trump For a chronological guide, see Timeline of the Donald Trump presidency. Early actions See also: Presidential transition of Donald Trump and First 100 days of Donald Trump's presidency Trump, with his family watching, raises his right hand and places his left hand on the Bible as he takes the oath of office. Roberts stands opposite him administering the oath. Trump is sworn in as president by Chief Justice John Roberts. Trump was inaugurated on January 20, 2017. During his first week in office, he signed six executive orders, which authorized: interim procedures in anticipation of repealing the Affordable Care Act ("Obamacare"), withdrawal from the Trans-Pacific Partnership negotiations, reinstatement of the Mexico City policy, advancement of the Keystone XL and Dakota Access Pipeline construction projects, reinforcement of border security, and a planning and design process to construct a wall along the U.S. border with Mexico.[209] Trump's daughter Ivanka and son-in-law Jared Kushner became his assistant and senior advisor, respectively.[210][211] Conflicts of interest Before being inaugurated, Trump moved his businesses into a revocable trust run by his sons, Eric and Donald Jr., and a business associate.[212][213] Though he said he would eschew "new foreign deals", the Trump Organization pursued expansions of its operations in Dubai, Scotland, and the Dominican Republic. Trump continued to profit from his businesses and to know how his administration's policies affected his businesses.[213][214] He was sued for violating the Domestic and Foreign Emoluments Clauses of the U.S. Constitution, marking the first time that the clauses had been substantively litigated.[215] One case was dismissed in lower court.[216] Two were dismissed by the U.S. Supreme Court as moot after the end of Trump's term.[217] Domestic policy Economy Main article: Economic policy of the Donald Trump administration Trump speaks at a lectern, with a crowd in front of and behind him. A banner behind him reads "Buy American – Hire American" Trump speaks to automobile workers in Michigan, March 2017. Trump took office at the height of the longest economic expansion in American history,[218] which began in June 2009 and continued until February 2020, when the COVID-19 recession began.[219] In December 2017, Trump signed the Tax Cuts and Jobs Act of 2017. The bill had been passed by both Republican-controlled chambers of Congress without any Democratic votes. It reduced tax rates for businesses and individuals, with business tax cuts to be permanent and individual tax cuts set to expire after 2025, and eliminated the penalty associated with Affordable Care Act's individual mandate.[220][221] The Trump administration claimed that the act would either increase tax revenues or pay for itself by prompting economic growth. Instead, revenues in 2018 were 7.6 percent lower than projected.[222] Despite a campaign promise to eliminate the national debt in eight years, Trump approved large increases in government spending and the 2017 tax cut. As a result, the federal budget deficit increased by almost 50 percent, to nearly $1 trillion in 2019.[223] Under Trump, the U.S. national debt increased by 39 percent, reaching $27.75 trillion by the end of his term, and the U.S. debt-to-GDP ratio hit a post-World War II high.[224] Trump also failed to deliver the $1 trillion infrastructure spending plan on which he had campaigned.[225] Trump is the only modern U.S. president to leave office with a smaller workforce than when he took office, by 3 million people.[218] Climate change, environment, and energy Main article: Environmental policy of the Donald Trump administration Trump rejects the scientific consensus on climate change.[226][227] He reduced the budget for renewable energy research by 40 percent and reversed Obama-era policies directed at curbing climate change.[228] In June 2017, Trump announced the withdrawal of the United States from the Paris Agreement, making the U.S. the only nation in the world to not ratify the agreement.[229] Trump aimed to boost the production and exports of fossil fuels.[230][231] Natural gas expanded under Trump, but coal continued to decline.[232][233] Trump rolled back more than 100 federal environmental regulations, including those that curbed greenhouse gas emissions, air and water pollution, and the use of toxic substances. He weakened protections for animals and environmental standards for federal infrastructure projects, and expanded permitted areas for drilling and resource extraction, such as allowing drilling in the Arctic Refuge. Trump's actions while president have been called "a very aggressive attempt to rewrite our laws and reinterpret the meaning of environmental protections".[234] Deregulation In January 2017, Trump signed Executive Order 13771, which directed that, for every new regulation, federal agencies "identify" two existing regulations for elimination, though it did not require elimination.[235] He dismantled many federal regulations on health,[236][237] labor,[238][237] and the environment,[239][237] among other topics. Trump signed 14 Congressional Review Act resolutions repealing federal regulations, including a bill that made it easier for severely mentally ill persons to buy guns.[240] During his first six weeks in office, he delayed, suspended, or reversed ninety federal regulations,[241] often "after requests by the regulated industries".[242] The Institute for Policy Integrity found that 78 percent of Trump's proposals were blocked by courts or did not prevail over litigation.[243] Health care During his campaign, Trump vowed to repeal and replace the Affordable Care Act (ACA).[244] In office, he scaled back the Act's implementation through executive orders 13765[245] and 13813.[246] Trump expressed a desire to "let Obamacare fail"; his administration cut the ACA enrollment period in half and drastically reduced funding for advertising and other ways to encourage enrollment.[247][248] Trump falsely claimed he saved the coverage of pre-existing conditions provided by the ACA.[249] In June 2018, the Trump administration joined 18 Republican-led states in arguing before the Supreme Court that the elimination of the financial penalties associated with the individual mandate had rendered the ACA unconstitutional.[250][251] If they had succeeded, it would have eliminated health insurance coverage for up to 23 million Americans.[250] During the 2016 campaign, Trump promised to protect funding for Medicare and other social safety-net programs, but in January 2020, he suggested he was willing to consider cuts to such programs.[252] In response to the opioid epidemic, Trump signed legislation in 2018 to increase funding for drug treatments but was widely criticized for failing to make a concrete strategy. U.S. opioid overdose deaths declined slightly in 2018 but surged to a record 50,052 deaths in 2019.[253] Social issues Main article: Social policy of Donald Trump Trump barred organizations that provide abortions or abortion referrals from receiving federal funds.[254] He said he supported "traditional marriage" but considered the nationwide legality of same-sex marriage a "settled" issue.[255] In March 2017, his administration rolled back key components of the Obama administration's workplace protections against discrimination of LGBT people.[256] Trump's attempted rollback of anti-discrimination protections for transgender patients in August 2020 was halted by a federal judge after the Supreme Court's ruling in July had extended employees' civil rights protections to gender identity and sexual orientation.[257] Trump has said he is opposed to gun control in general, although his views have shifted over time.[258] After several mass shootings during his term, he said he would propose legislation related to guns, but he abandoned that effort in November 2019.[259] His administration took an anti-marijuana position, revoking Obama-era policies that provided protections for states that legalized marijuana.[260] Trump is a long-time advocate of capital punishment.[261][262] Under his administration, the federal government executed 13 prisoners, more than in the previous 56 years combined and after a 17-year moratorium.[263] In 2016, Trump said he supported the use of interrogation torture methods such as waterboarding[264][265] but later appeared to recant this due to the opposition of Defense Secretary James Mattis.[266] Pardons and commutations Further information: List of people granted executive clemency by Donald Trump Trump granted 237 requests for clemency, fewer than all presidents since 1900 with the exception of George H. W. Bush and George W. Bush.[267] Only 25 of them had been vetted by the Justice Department's Office of the Pardon Attorney; the others were granted to people with personal or political connections to him, his family, and his allies, or recommended by celebrities.[268][269] From 2017 to 2019, he pardoned, amongst others, former Navy sailor Kristian Saucier, who was convicted of taking classified photographs of classified areas inside a submarine;[270] and right-wing commentator Dinesh D'Souza.[271] Following a request by celebrity Kim Kardashian, Trump commuted the life sentence of Alice Marie Johnson, who had been convicted of drug trafficking.[272] Trump also pardoned or reversed the sentences of three American servicemen convicted or accused of committing war crimes in Afghanistan or Iraq.[273] In November and December 2020, Trump pardoned four Blackwater private security contractors convicted of killing Iraqi civilians in the 2007 Nisour Square massacre;[274] white-collar criminals Michael Milken and Bernard Kerik;[275] daughter Ivanka's father-in-law Charles Kushner;[269] and five people convicted as a result of investigations into Russian interference in the 2016 presidential elections. Among them were Michael Flynn; Roger Stone, whose 40-month sentence for lying to Congress, witness tampering, and obstruction he had already commuted in July; and Paul Manafort.[276] In his last full day in office, Trump granted 73 pardons, including to Steve Bannon and Trump fundraiser Elliott Broidy, and commuted 70 sentences.[277] Lafayette Square protester removal and photo op Main article: Donald Trump photo op at St. John's Church Trump and group of officials and advisors on the way from White House complex to St. John's Church On June 1, 2020, federal law-enforcement officials used batons, rubber bullets, pepper spray projectiles, stun grenades, and smoke to remove a largely peaceful crowd of protesters from Lafayette Square, outside the White House.[278][279] Trump then walked to St. John's Episcopal Church, where protesters had set a small fire the night before; he posed for photographs holding a Bible, with senior administration officials later joining him in photos.[278][280] Trump said on June 3 that the protesters were cleared because "they tried to burn down the church [on May 31] and almost succeeded", describing the church as "badly hurt".[281] Religious leaders condemned the treatment of protesters and the photo opportunity itself.[282] Many retired military leaders and defense officials condemned Trump's proposal to use the U.S. military against anti-police-brutality protesters.[283] Immigration Main article: Immigration policy of Donald Trump Trump's proposed immigration policies were a topic of bitter and contentious debate during the campaign. He promised to build a wall on the Mexico–United States border to restrict illegal movement and vowed Mexico would pay for it.[284] He pledged to deport millions of illegal immigrants residing in the United States,[285] and criticized birthright citizenship for incentivizing "anchor babies".[286] As president, he frequently described illegal immigration as an "invasion" and conflated immigrants with the criminal gang MS-13,[287] though available research shows undocumented immigrants have a lower crime rate than native-born Americans.[288][289] Trump attempted to drastically escalate immigration enforcement, including implementing harsher immigration enforcement policies against asylum seekers from Central America than any modern U.S. president.[290][291] From 2018 onward, Trump deployed nearly 6,000 troops to the U.S.–Mexico border[292] to stop most Central American migrants from seeking U.S. asylum. In 2020, his administration widened the public charge rule to further restrict immigrants who might use government benefits from getting permanent residency via green cards.[293] Trump reduced the number of refugees admitted into the U.S. to record lows. When Trump took office, the annual limit was 110,000; Trump set a limit of 18,000 in the 2020 fiscal year and 15,000 in the 2021 fiscal year.[294][295] Additional restrictions implemented by the Trump administration caused significant bottlenecks in processing refugee applications, resulting in fewer refugees accepted compared to the allowed limits.[296] Travel ban Main article: Trump travel ban Further information: Executive Order 13769 and Executive Order 13780 Following the 2015 San Bernardino attack, Trump proposed to ban Muslim foreigners from entering the United States until stronger vetting systems could be implemented.[297] He later reframed the proposed ban to apply to countries with a "proven history of terrorism".[298] On January 27, 2017, Trump signed Executive Order 13769, which suspended admission of refugees for 120 days and denied entry to citizens of Iraq, Iran, Libya, Somalia, Sudan, Syria, and Yemen for 90 days, citing security concerns. The order took effect immediately and without warning, causing confusion and chaos at airports.[299][300] Protests against the ban began at airports the next day.[299][300] Legal challenges to the order resulted in nationwide preliminary injunctions.[301] A March 6 revised order, which excluded Iraq and gave other exemptions, again was blocked by federal judges in three states.[302][303] In a decision in June 2017, the Supreme Court ruled that the ban could be enforced on visitors who lack a "credible claim of a bona fide relationship with a person or entity in the United States".[304] The temporary order was replaced by Presidential Proclamation 9645 on September 24, 2017, which restricted travel from the originally targeted countries except Iraq and Sudan, and further banned travelers from North Korea and Chad, along with certain Venezuelan officials.[305] After lower courts partially blocked the new restrictions, the Supreme Court allowed the September version to go into full effect on December 4, 2017,[306] and ultimately upheld the travel ban in a June 2019 ruling.[307] Family separation at border Main article: Trump administration family separation policy Children sitting within a wire mesh compartment Children and juveniles in a wire mesh compartment, showing sleeping mats and thermal blankets on floor Children sitting within a wire mesh compartment in the Ursula detention facility in McAllen, Texas, June 2018 The Trump administration separated more than 5,400 children of migrant families from their parents at the U.S.–Mexico border, a sharp increase in the number of family separations at the border starting from the summer of 2017.[308][309] In April 2018, the Trump administration announced a "zero tolerance" policy whereby every adult suspected of illegal entry would be criminally prosecuted.[310] This resulted in family separations, as the migrant adults were put in criminal detention for prosecution, while their children were separated as unaccompanied alien minors.[311] Administration officials described the policy as a way to deter illegal immigration.[312] The policy of family separations was unprecedented in previous administrations and sparked public outrage.[312][313] Trump falsely asserted that his administration was merely following the law, blaming Democrats, despite the separations being his administration's policy.[314][315][316] Although Trump originally argued that the separations could not be stopped by an executive order, he acceded to intense public objection and signed an executive order on June 20, 2018, mandating that migrant families be detained together unless "there is a concern" doing so would pose a risk to the child.[317][318] On June 26, 2018, Judge Dana Sabraw concluded that the Trump administration had "no system in place to keep track of" the separated children, nor any effective measures for family communication and reunification;[319] Sabraw ordered for the families to be reunited and family separations stopped except in limited circumstances.[320] After the federal-court order, the Trump administration separated more than a thousand migrant children from their families; the ACLU contended that the Trump administration had abused its discretion and asked Sabraw to more narrowly define the circumstances warranting separation.[309] Trump wall and government shutdown Main articles: Trump wall and 2018–2019 United States federal government shutdown Trump speaks with U.S. Border Patrol agents. Behind him are black SUVs, four short border wall prototype designs, and the current border wall in the background Trump examines border wall prototypes in Otay Mesa, California. One of Trump's central campaign promises was to build a 1,000-mile (1,600 km) border wall to Mexico and have Mexico pay for it.[321] By the end of his term, the U.S. had built "40 miles [64 km] of new primary wall and 33 miles [53 km] of secondary wall" in locations where there had been no barriers and 365 miles (587 km) of primary or secondary border fencing replacing dilapidated or outdated barriers.[322] In 2018, Trump refused to sign any appropriations bill from Congress unless it allocated $5.6 billion in funds for the border wall,[323] resulting in the federal government partially shutting down for 35 days from December 2018 to January 2019, the longest U.S. government shutdown in history.[324][325] Around 800,000 government employees were furloughed or worked without pay.[326] Trump and Congress ended the shutdown by approving temporary funding that provided delayed payments to government workers but no funds for the wall.[324] The shutdown resulted in an estimated permanent loss of $3 billion to the economy, according to the Congressional Budget Office.[327] About half of those polled blamed Trump for the shutdown, and Trump's approval ratings dropped.[328] To prevent another imminent shutdown in February 2019, Congress passed and Trump signed a funding bill that included $1.375 billion for 55 miles (89 km) of bollard border fencing.[329] Trump also declared a National Emergency Concerning the Southern Border of the United States, intending to divert $6.1 billion of funds Congress had allocated to other purposes.[329] Trump vetoed a joint resolution to overturn the declaration, and the Senate voted against a veto override.[330] Legal challenges to the diversion of $2.5 billion originally meant for the Department of Defense's drug interdiction efforts[331][332] and $3.6 billion originally meant for military construction[333][334] were unsuccessful. Foreign policy Main article: Foreign policy of the Donald Trump administration See also: List of international presidential trips made by Donald Trump Trump and other G7 leaders sit at a conference table Trump with the other G7 leaders at the 45th summit in France, 2019 Trump described himself as a "nationalist"[335] and his foreign policy as "America First".[336] His foreign policy was marked by praise and support of populist, neo-nationalist, and authoritarian governments.[337] Hallmarks of foreign relations during Trump's tenure included unpredictability and uncertainty,[336] a lack of a consistent foreign policy,[338] and strained and sometimes antagonistic relationships with the U.S.'s European allies.[339] He criticized NATO allies and privately suggested on multiple occasions that the United States should withdraw from the alliance.[340][341] Trade See also: Trump tariffs Trump withdrew the U.S. from the Trans-Pacific Partnership (TPP) negotiations,[342] imposed tariffs on steel and aluminum imports,[343] and launched a trade war with China by sharply increasing tariffs on 818 categories (worth $50 billion) of Chinese goods imported into the U.S.[344] While Trump said that import tariffs are paid by China into the U.S. Treasury, they are paid by American companies that import goods from China.[345] Although he pledged during the campaign to significantly reduce the U.S.'s large trade deficits, the trade deficit in July 2020, during the COVID-19 pandemic, "was the largest monthly deficit since July 2008".[346] Following a 2017–2018 renegotiation, the United States-Mexico-Canada Agreement (USMCA) became effective in July 2020 as the successor to NAFTA.[347] Russia Trump and Putin, both seated, lean over and shake hands Putin and Trump shaking hands at the G20 Osaka summit, June 2019 The Trump administration, according to Reuters, "water[ed] down the toughest penalties the U.S. had imposed on Russian entities" after its 2014 annexation of Crimea.[348][349] Trump withdrew the U.S. from the Intermediate-Range Nuclear Forces Treaty, citing alleged Russian non-compliance,[350] and supported a potential return of Russia to the G7.[351] Trump repeatedly praised and rarely criticized Russian president Vladimir Putin[352][353] but opposed some actions of the Russian government.[354][355] After he met Putin at the Helsinki Summit in July 2018, Trump drew bipartisan criticism for accepting Putin's denial of Russian interference in the 2016 presidential election, rather than accepting the findings of U.S. intelligence agencies.[356][357][358] Trump did not discuss alleged Russian bounties offered to Taliban fighters for attacking American soldiers in Afghanistan with Putin, saying both that he doubted the intelligence and that he was not briefed on it.[359] China Before and during his presidency, Trump repeatedly accused China of taking unfair advantage of the U.S.[360] As president, Trump launched a trade war against China that was widely characterized as a failure,[361][362][363] sanctioned Huawei for its alleged ties to Iran,[364] significantly increased visa restrictions on Chinese students and scholars,[365] and classified China as a currency manipulator.[366] Trump also juxtaposed verbal attacks on China with praise of Chinese Communist Party leader Xi Jinping,[367] which was attributed to trade war negotiations with the leader.[368] After initially praising China for its handling of the COVID-19 pandemic,[369] he began a campaign of criticism over its response starting in March 2020.[370] Trump said he resisted punishing China for its human rights abuses against ethnic minorities in the northwestern Xinjiang region for fear of jeopardizing trade negotiations.[371] In July 2020, the Trump administration imposed sanctions and visa restrictions against senior Chinese officials, in response to expanded mass detention camps holding more than a million of the country's Uyghur Muslim ethnic minority.[372] North Korea See also: 2018–19 Korean peace process Trump and Kim shake hands on a stage with U.S. and North Korean flags in the background Trump meets Kim Jong Un at the Singapore summit, June 2018. In 2017, when North Korea's nuclear weapons were increasingly seen as a serious threat,[373] Trump escalated his rhetoric, warning that North Korean aggression would be met with "fire and fury like the world has never seen".[374][375] In 2017, Trump declared that he wanted North Korea's "complete denuclearization", and engaged in name-calling with leader Kim Jong Un.[374][376] After this period of tension, Trump and Kim exchanged at least 27 letters in which the two men described a warm personal friendship.[377][378] Trump met Kim three times: in Singapore in 2018, in Hanoi in 2019, and in the Korean Demilitarized Zone in 2019.[379] Trump became the first sitting U.S. president to meet a North Korean leader or to set foot on North Korean soil.[379] Trump also lifted some U.S. sanctions against North Korea.[380] However, no denuclearization agreement was reached,[381] and talks in October 2019 broke down after one day.[382] While conducting no nuclear tests since 2017, North Korea continued to build up its arsenal of nuclear weapons and ballistic missiles.[383][384] Afghanistan U.S. and Taliban officials stand spaced apart in a formal room U.S. Secretary of State Mike Pompeo meeting with Taliban delegation in Qatar in September 2020 U.S. troop numbers in Afghanistan increased from 8,500 in January 2017 to 14,000 a year later,[385] reversing Trump's pre-election position critical of further involvement in Afghanistan.[386] In February 2020, the Trump administration signed a conditional peace agreement with the Taliban, which called for the withdrawal of foreign troops in 14 months "contingent on a guarantee from the Taliban that Afghan soil will not be used by terrorists with aims to attack the United States or its allies" and for the U.S. to seek the release of 5,000 Taliban imprisoned by the Afghan government.[387][388][389] By the end of Trump's term, 5,000 Taliban had been released, and, despite the Taliban continuing attacks on Afghan forces and integrating Al-Qaeda members into its leadership, U.S. troops had been reduced to 2,500.[389] Israel Trump supported many of the policies of Israeli Prime Minister Benjamin Netanyahu.[390] Under Trump, the U.S. recognized Jerusalem as the capital of Israel[391] and Israeli sovereignty over the Golan Heights,[392] leading to international condemnation including from the United Nations General Assembly, the European Union, and the Arab League.[393][394] Saudi Arabia Trump, King Salman of Saudi Arabia, and Abdel Fattah el-Sisi place their hands on a glowing white orb light at waist level Trump, King Salman of Saudi Arabia, and Egyptian president Abdel Fattah el-Sisi at the 2017 Riyadh summit in Saudi Arabia Trump actively supported the Saudi Arabian–led intervention in Yemen against the Houthis and in 2017 signed a $110 billion agreement to sell arms to Saudi Arabia,[395] In 2018, the U.S. provided limited intelligence and logistical support for the intervention.[396][397] Following the 2019 attack on Saudi oil facilities, which the U.S. and Saudi Arabia blamed on Iran, Trump approved the deployment of 3,000 additional U.S. troops, including fighter squadrons, two Patriot batteries, and a Terminal High Altitude Area Defense system (THAAD), to Saudi Arabia and the United Arab Emirates.[398] Syria Trump ordered missile strikes in April 2017 and in April 2018 against the Assad regime in Syria, in retaliation for the Khan Shaykhun and Douma chemical attacks, respectively.[399][400] In December 2018, Trump declared "we have won against ISIS", contradicting Department of Defense assessments, and ordered the withdrawal of all troops from Syria.[401][402] The next day, Mattis resigned in protest, calling his decision an abandonment of the U.S.'s Kurdish allies who played a key role in fighting ISIS.[403] One week after his announcement, Trump said he would not approve any extension of the American deployment in Syria.[404] Trump and Turkish President Recep Tayyip Erdoğan at the White House in May 2017 In October 2019, after Trump spoke to Turkish president Recep Tayyip Erdoğan, U.S. troops in northern Syria were withdrawn from the area and Turkey invaded northern Syria, attacking and displacing American-allied Kurds in the area.[405] Later that month, the U.S. House of Representatives, in a rare bipartisan vote of 354 to 60, condemned Trump's withdrawal of U.S. troops from Syria, for "abandoning U.S. allies, undermining the struggle against ISIS, and spurring a humanitarian catastrophe".[406][407] Iran In May 2018, Trump withdrew the United States from the

Mark Elliot Zuckerberg (/ˈzʌkərbɜːrɡ/; born May 14, 1984) is an American businessman and philanthropist. He co-founded the social media service Facebook, along with his Harvard roommates in 2004, and its parent company Meta Platforms (formerly Facebook, Inc.), of which he is executive chairman, chief executive officer and controlling shareholder. Zuckerberg briefly attended Harvard University, where he launched Facebook in February 2004 with his roommates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes. Originally launched in only select college campuses, the site expanded rapidly and eventually beyond colleges, reaching one billion users in 2012. Zuckerberg took the company public in May 2012 with majority shares. In 2007, at age 23, he was the world's youngest self-made billionaire at the time. He has since used his funds to organize multiple philanthropic endeavors, including the establishment of the Chan Zuckerberg Initiative, of which he collaborated with his wife Priscilla Chan. Time named Zuckerberg one of the most influential people in the world in 2008, 2011, 2016 and 2019, and nominated him as a finalist several other times. He was named the Time Person of the Year in 2010, the same year when Facebook eclipsed more than half a billion users.[1] In December 2016, Zuckerberg was ranked tenth on the Forbes list of the World's Most Powerful People.[2] In the Forbes 400 list of wealthiest Americans in 2023, he was ranked eighth with a personal wealth of $106 billion.[3] As of January 2024, Zuckerberg's net worth was estimated at $125 billion by Forbes, making him the fifth richest person in the world.[4] A film depicting Zuckerberg's early career, legal troubles and initial success with Facebook, The Social Network, was released in 2010 and won multiple Academy Awards. Zuckerberg's prominence and fast rise in the technology industry has prompted political and legal attention. The founding of Facebook involved Zuckerberg in multiple lawsuits regarding the creation and ownership of the website as well as issues of user privacy. In 2013, he co-founded the pro-immigration lobbying group FWD.us. On April 10 and 11, 2018, Zuckerberg testified before the United States Senate Committee on Commerce, Science, and Transportation regarding the usage of personal data by Facebook in relation to the Facebook–Cambridge Analytica data scandal. Early life and education Mark Elliot Zuckerberg was born on May 14, 1984, in White Plains, New York to psychiatrist Karen (née Kempner) and dentist Edward Zuckerberg.[5] He and his three sisters (Arielle, Randi, and Donna) were raised in a Reform Jewish household[6] in Dobbs Ferry, New York.[7] His great-grandparents were Jewish emigrants from Austria, Germany, and Poland.[8] Zuckerberg initially attended Ardsley High School before transferring to Phillips Exeter Academy. He was captain of the fencing team.[9][10][11] Software development Early years Zuckerberg began using computers and writing software in middle school. In high school, he built a program that allowed all the computers between his house and his father's dental office to communicate with each other.[12][13] During Zuckerberg's high-school years, he worked to build a music player called the Synapse Media Player. The device used machine learning to learn the user's listening habits, which was posted to Slashdot[14] and received a rating of 3 out of 5 from PC Magazine.[15] The New Yorker once said of Zuckerberg: "some kids played computer games. Mark created them."[7] College years The New Yorker noted that by the time Zuckerberg began classes at Harvard in 2002, he had already achieved a "reputation as a programming prodigy". He studied psychology and computer science and belonged to Alpha Epsilon Pi and Kirkland House.[7][16] In his second year, he wrote a program that he called CourseMatch, which allowed users to make class selection decisions based on the choices of other students and help them form study groups. Later, he created a different program he initially called Facemash that let students select the best-looking person from a choice of photos. Arie Hasit, Zuckerberg's roommate at the time, explained: We had books called Face Books, which included the names and pictures of everyone who lived in the student dorms. At first, he built a site and placed two pictures or pictures of two males and two females. Visitors to the site had to choose who was "hotter" and according to the votes there would be a ranking.[17] The site went up over a weekend, but by Monday morning, the college shut it down, because its popularity had overwhelmed one of Harvard's network switches preventing students from accessing the Internet. In addition, many students complained that their photos were being used without permission. Zuckerberg apologized publicly, and the student paper ran articles stating that his site was "completely improper".[17] Career Facebook Further information: Facebook and History of Facebook External videos YouTube logo video icon "Mark Zuckerberg's career in 90 seconds | Tech Gurus" via The Daily Telegraph[18] In January 2004, Zuckerberg began writing code for a new website.[19] On February 4, 2004, Zuckerberg launched "Thefacebook", originally located at thefacebook.com, in partnership with his roommates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes.[20][21] An earlier inspiration for Facebook may have come from Phillips Exeter Academy, the prep school from which Zuckerberg graduated in 2002. It published its own student directory, "The Photo Address Book", which students referred to as "The Facebook". Such photo directories were an important part of the student social experience at many private schools. With them, students were able to list attributes such as their class years, their friends, and their telephone numbers.[21] Mark Zuckerberg with a laptop, facing the camera Zuckerberg in 2005 Six days after the site launched, three Harvard seniors, Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra, accused Zuckerberg of intentionally misleading them into believing that he would help them build a social network called HarvardConnection.com, when he was using their ideas to build a competing product.[22] The three complained to The Harvard Crimson, and the newspaper began an investigation in response. While Zuckerberg tried to convince the editors not to run the story,[23] he also broke into two of the editors' email accounts—for which he made use of their private login data logs from TheFacebook.[24][25] Following the official launch of the Facebook social media platform, the three filed a lawsuit against Zuckerberg that resulted in a settlement.[26] The agreed settlement was for 1.2 million Facebook shares and $20 million in cash.[27] Zuckerberg's Facebook started off as just a "Harvard thing" until he decided to spread it to other schools, enlisting the help of roommate and co-founder Dustin Moskovitz.[28] They began with Columbia University, New York University, Stanford University, Dartmouth College, Cornell University, University of Pennsylvania, Brown University, and Yale University.[29] Zuckerberg dropped out of Harvard in his sophomore year in order to complete the project.[30] Zuckerberg, Moskovitz and the other co-founders moved to Palo Alto, California, where they leased a small house that served as an office. Over the summer, Zuckerberg met Peter Thiel, who invested in his company. They got their first office in mid-2004. According to Zuckerberg, the group planned to return to Harvard, but eventually decided to remain in California, where Zuckerberg appreciated the "mythical place" of Silicon Valley, the center of computer technology in California.[31][32] They had already turned down offers by major corporations to buy the company. In an interview in 2007, Zuckerberg explained his reasoning: "It's not because of the amount of money. For me and my colleagues, the most important thing is that we create an open information flow for people. Having media corporations owned by conglomerates is just not an attractive idea to me."[33] The same year, speaking at Y Combinator's Startup School course at Stanford University, Zuckerberg made a controversial assertion that "young people are just smarter" and that other entrepreneurs should bias towards hiring young people.[34] He restated these goals to Wired magazine in 2010: "The thing I really care about is the mission, making the world open."[35] Earlier, in April 2009, Zuckerberg had sought the advice of former Netscape CFO Peter Currie regarding financing strategies for Facebook.[36] On July 21, 2010, Zuckerberg reported that Facebook had reached the 500-million-user mark.[37] When asked whether Facebook could earn more income from advertising as a result of its phenomenal growth, he explained: I guess we could ... If you look at how much of our page is taken up with ads compared to the average search query. The average for us is a little less than 10 percent of the pages and the average for search is about 20 percent taken up with ads ... That's the simplest thing we could do. But we aren't like that. We make enough money. Right, I mean, we are keeping things running; we are growing at the rate we want to.[35] In 2010, Steven Levy, who wrote the 1984 book Hackers: Heroes of the Computer Revolution, wrote that Zuckerberg "clearly thinks of himself as a hacker". Zuckerberg said that "it's OK to break things" "to make them better".[38][39] Facebook instituted "hackathons" held every six to eight weeks where participants would have one night to conceive of and complete a project.[38] The company provided music, food, and beer at the hackathons, and many Facebook staff members, including Zuckerberg, regularly attended.[39] "The idea is that you can build something really good in a night", Zuckerberg told Levy. "And that's part of the personality of Facebook now ... It's definitely very core to my personality."[38] In 2007, Zuckerberg was added to MIT Technology Review's TR35 list as one of the top 35 innovators in the world under the age of 35.[40] Vanity Fair magazine named Zuckerberg number 1 on its 2010 list of the Top 100 "most influential people of the Information Age".[41] Zuckerberg ranked number 23 on the Vanity Fair 100 list in 2009.[42] In 2010, Zuckerberg was chosen as number 16 in New Statesman's annual survey of the world's 50 most influential figures.[43] In a 2011 interview with PBS shortly after the death of Steve Jobs, Zuckerberg said that Jobs had advised him on how to create a management team at Facebook that was "focused on building as high quality and good things as you are".[44] Zuckerberg and Russian Prime Minister Dmitry Medvedev during their meeting at the Russian leader's residence outside Moscow, October 1, 2012 On October 1, 2012, Zuckerberg met with then Russian Prime Minister Dmitry Medvedev in Moscow to stimulate social media innovation in Russia and to boost Facebook's position in the Russian market.[45][46] Russia's communications minister tweeted that Prime Minister Dmitry Medvedev urged the social media giant's founder to abandon plans to lure away Russian programmers and instead consider opening a research center in Moscow. In 2012, Facebook had roughly 9 million users in Russia, while domestic clone VK had around 34 million.[47][48] Rebecca Van Dyck, Facebook's head of consumer marketing, said that 85 million American Facebook users were exposed to the first day of the Home promotional campaign on April 6, 2013.[49] On August 19, 2013, The Washington Post reported that Zuckerberg's Facebook profile was hacked by an unemployed web developer.[50] At the 2013 TechCrunch Disrupt conference, held in September, Zuckerberg stated that he was working towards registering the 5 billion people who were not connected to the Internet as of the conference on Facebook. Zuckerberg then explained that this is intertwined with the aim of the Internet.org project, whereby Facebook, with the support of other technology companies, seeks to increase the number of people connected to the internet.[51][52] Zuckerberg was the keynote speaker at the 2014 Mobile World Congress (MWC), held in Barcelona, Spain, in March 2014, which was attended by 75,000 delegates. Various media sources highlighted the connection between Facebook's focus on mobile technology and Zuckerberg's speech, stating that mobile represents the future of the company.[53] Zuckerberg's speech expands upon the goal that he raised at the TechCrunch conference in September 2013, whereby he is working towards expanding Internet coverage into developing countries.[54] Alongside other American technology figures like Jeff Bezos and Tim Cook, Zuckerberg hosted visiting Chinese politician Lu Wei, known as the "Internet czar" for his influence in the enforcement of China's online policy, at Facebook's headquarters on December 8, 2014. The meeting occurred after Zuckerberg participated in a Q&A session at Tsinghua University in Beijing, China, on October 23, 2014, where he conversed in Mandarin Chinese; although Facebook is banned in China, Zuckerberg is highly regarded among the people and was at the university to help fuel the nation's burgeoning entrepreneur sector.[55] Zuckerberg fielded questions during a live Q&A session at the company's headquarters in Menlo Park on December 11, 2014. The founder and CEO explained that he does not believe Facebook is a waste of time, because it facilitates social engagement, and participating in a public session was so that he could "learn how to better serve the community".[56][57] Zuckerberg receives a one-dollar salary as CEO of Facebook.[58] In June 2016, Business Insider named Zuckerberg one of the "Top 10 Business Visionaries Creating Value for the World" along with Elon Musk and Sal Khan, due to the fact that he and his wife "pledged to give away 99% of their wealth-then estimated at $55.0 billion."[59] On May 25, 2017, at Harvard's 366th commencement day, Zuckerberg, after giving a commencement speech,[60] received an honorary degree from Harvard.[61][62] In January 2019, Zuckerberg laid plans to integrate an end-to-end encrypted system for three major social media platforms, including Facebook, Instagram and WhatsApp.[63] On August 14, 2020, Facebook integrated the chat systems for Instagram and Messenger on both iOS and Android devices. The update encouraged cross-communication between Instagram and Facebook users.[64] Other projects Waist high portrait of man in his twenties, looking into the camera and gesturing with both hands, wearing a black pullover shirt that says "The North Face" and wearing identification on a white band hanging from his neck Zuckerberg at the World Economic Forum in Davos, Switzerland (January 2009) A month after Zuckerberg launched Facebook in February 2004, i2hub, another campus-only service, created by Wayne Chang and focusing on peer-to-peer file sharing, was launched. At the time, both i2hub and Facebook were gaining the attention of the press and growing rapidly in users and publicity. In August 2004, Zuckerberg, Andrew McCollum, Adam D'Angelo, and Sean Parker launched a competing peer-to-peer file sharing service called Wirehog, a precursor to Facebook Platform applications, which was launched in 2007.[65][66][67] In 2013, Zuckerberg launched Internet.org, which he described as an initiative to provide Internet access to the five billion people without it as of the launch date. The project faced significant opposition in India, where activists said its limited internet ran counter to the principle of net neutrality; Zuckerberg responded by saying that a limited internet was better than no internet. Internet.org was shut down in India in February 2016, although Zuckerberg later met with Indian Prime Minister Narendra Modi to discuss further possibilities.[68][69] Zuckerberg is a board member of the solar sail spacecraft development project Breakthrough Starshot, which he co-founded with Yuri Milner and Stephen Hawking in 2016.[70] Controversies and lawsuits See also: Criticism of Facebook ConnectU lawsuits Main article: ConnectU Harvard students Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra accused Zuckerberg of intentionally making them believe he would help them build a social network called HarvardConnection.com (later called ConnectU).[71] They filed a lawsuit in 2004; it was dismissed on a technicality on March 28, 2007. It was refiled soon thereafter in a federal court in Boston. Facebook countersued in regards to Social Butterfly, a project put out by The Winklevoss Chang Group, an alleged partnership between ConnectU and i2hub. On June 25, 2008, the case settled and Facebook agreed to transfer over 1.2 million common shares and pay $20 million in cash.[72] In November 2007, confidential court documents were posted on the website of 02138, a magazine that catered to Harvard alumni. They included Zuckerberg's Social Security number, his parents' home address, and his girlfriend's address. Though Facebook filed to have the documents removed, the judge ruled in favor of 02138.[73] Eduardo Saverin Main article: Eduardo Saverin In 2005, Facebook co-founder Eduardo Saverin filed a lawsuit against Zuckerberg and Facebook, alleging that Zuckerberg had illegally spent Saverin's money on personal expenses. The lawsuit was settled out of court and though terms of the settlement were sealed, the company affirmed Saverin's title as co-founder of Facebook, and Saverin agreed to stop talking to the press.[74][75] Pakistan criminal investigation In June 2010, then Pakistani Deputy Attorney General Muhammad Azhar Sidiqque launched a criminal investigation into Zuckerberg and Facebook co-founders Dustin Moskovitz and Chris Hughes after a "Draw Muhammad" contest was hosted on Facebook. The investigation also named the anonymous German woman who created the contest. Sidiqque asked the country's police to contact Interpol to have Zuckerberg and the three others arrested for blasphemy. On May 19, 2010, Facebook's website was temporarily blocked in Pakistan until Facebook removed the contest from its website at the end of May. Sidiqque also asked its UN representative to raise the issue with the United Nations General Assembly.[76][77] Paul Ceglia Main article: Paul Ceglia In June 2010, Paul Ceglia, the owner of a wood pellet fuel company in Allegany County, upstate New York, filed suit against Zuckerberg, claiming 84 percent ownership of Facebook and seeking monetary damages. According to Ceglia, he and Zuckerberg signed a contract on April 28, 2003, that an initial fee of $1,000 entitled Ceglia to 50% of the website's revenue, as well as an additional 1% interest in the business per day after January 1, 2004, until website completion. Zuckerberg was developing other projects at the time, among which was Facemash, the predecessor to Facebook, but did not register the domain name thefacebook.com until January 1, 2004. The Facebook management dismissed the lawsuit as "completely frivolous". Facebook spokesman Barry Schnitt told a reporter that Ceglia's counsel had unsuccessfully sought an out-of-court settlement.[78][79] On October 26, 2012, federal authorities arrested Ceglia, charging him with mail and wire fraud and of "tampering with, destroying and fabricating evidence in a scheme to defraud the Facebook founder of billions of dollars." Ceglia is accused of fabricating emails to make it appear that he and Zuckerberg discussed details about an early version of Facebook, although after examining their emails, investigators found there was no mention of Facebook in them.[80] Some law firms withdrew from the case before it was initiated and others after Ceglia's arrest.[81][82] Hawaiian land ownership In January 2017, Zuckerberg filed eight "quiet title and partition" lawsuits against hundreds of native Hawaiians to claim small tracts of land which they owned. This land is contained within the 700 acres of land in the Hawaiian island of Kauai that Zuckerberg had purchased in 2014. University of Hawaii law professor Kapua Sproat stated that Zuckerberg's lawsuits were "the face of neocolonialism".[83] Zuckerberg responded to criticisms in a Facebook post, stating that the lawsuits were a good faith effort to pay the partial owners of the land their "fair share".[83] When he learned that Hawaiian land ownership law differs from that of the other 49 states, he dropped the lawsuits. Zuckerberg stated that he regretted not taking the time to understand the process and its history before moving ahead.[84][85] Testimony before U.S. Congress On April 10 and 11, 2018, Zuckerberg testified before the United States Senate Committee on Commerce, Science, and Transportation regarding the usage of personal data by Facebook in relation to the Facebook–Cambridge Analytica data scandal.[86] He called the whole affair a breach of trust between Aleksandr Kogan, Cambridge Analytica, and Facebook.[87] Zuckerberg refused requests to appear to give evidence on the matter to a Parliamentary committee in the United Kingdom.[88] On October 1, 2020, the US Senate Commerce Committee unanimously voted to issue subpoenas to the CEOs of three top tech firms, including Zuckerberg, Google's Sundar Pichai and Twitter's Jack Dorsey. The subpoenas aimed to force the CEOs to testify about the legal immunity the law affords tech platforms under Section 230 of the Communications Act of 1934. US Republicans argued that the law unduly protected social media companies against allegations of anti-conservative censorship.[89] On March 25, 2021, Zuckerberg testified before the House Energy and Commerce Committee regarding Facebook's role in the spread of misinformation and hate speech on the platform. During the hearing, he was questioned about Facebook's handling of user data, its role in the January 6, 2021, attack on the US Capitol Building, and its efforts to combat misinformation and hate speech. Zuckerberg acknowledged that Facebook had a responsibility to address these issues and outlined the steps that the company is taking to improve its policies and practices. The hearing was part of a broader effort by Congress to hold tech companies accountable for their role in shaping public discourse and protecting user privacy.[90] Meta's proposal Court documents allege that Zuckerberg personally rejected Meta's proposals to improve teenagers' mental health. He consistently opposed efforts to enhance well-being on Facebook and Instagram, overriding senior executives like Instagram head Adam Mosseri and Global Affairs President Nick Clegg, as revealed in an ongoing lawsuit. Internal communications disclosed in the Massachusetts-initiated legal action depict Zuckerberg's resistance to better protect over 30 million teens on Instagram in the U.S., highlighting his substantial influence on Meta's decisions impacting billions of users. These documents also shed light on occasional tensions between Zuckerberg and other Meta officials advocating for improved user well-being.[91] Depictions in media The Social Network Main article: The Social Network Jesse Eisenberg (pictured) played Zuckerberg in The Social Network. A movie based on Zuckerberg and the founding years of Facebook, The Social Network, was released on October 1, 2010, starring Jesse Eisenberg as Zuckerberg. After Zuckerberg was told about the film, he responded, "I just wished that nobody made a movie of me while I was still alive."[92] Also, after the film's script was leaked on the Internet and it was apparent that the film would not portray Zuckerberg in a wholly positive light, he stated that he wanted to establish himself as a "good guy".[93] The film is based on the book The Accidental Billionaires by Ben Mezrich, which the book's publicist once described as "big juicy fun" rather than "reportage".[94] The film's screenwriter Aaron Sorkin told New York magazine, "I don't want my fidelity to be the truth; I want it to be storytelling", adding, "What is the big deal about accuracy purely for accuracy's sake, and can we not have the true be the enemy of the good?"[95] Upon winning the Golden Globe Award for Best Picture on January 16, 2011, producer Scott Rudin thanked Facebook and Zuckerberg "for his willingness to allow us to use his life and work as a metaphor through which to tell a story about communication and the way we relate to each other."[96] Sorkin, who won for Best Screenplay, retracted some of the impressions given in his script:[97] I wanted to say to Mark Zuckerberg tonight, if you're watching, Rooney Mara's character makes a prediction at the beginning of the movie. She was wrong. You turned out to be a great entrepreneur, a visionary, and an incredible altruist. On January 29, 2011, Zuckerberg made a surprise guest appearance on Saturday Night Live, which was hosted by Jesse Eisenberg. They both said it was the first time they had met.[98] Eisenberg asked Zuckerberg, who had been critical of his portrayal by the film, what he thought of the movie. Zuckerberg replied, "It was interesting."[99] In a subsequent interview about their meeting, Eisenberg explained that he was "nervous to meet him, because I had spent now, a year and a half thinking about him ..." He added, "Mark has been so gracious about something that's really so uncomfortable ... The fact that he would do SNL and make fun of the situation is so sweet and so generous. It's the best possible way to handle something that, I think, could otherwise be very uncomfortable."[100][101] Disputed accuracy According to David Kirkpatrick, former technology editor at Fortune magazine and author of The Facebook Effect: The Inside Story of the Company That Is Connecting the World, (2011),[102] "the film is only "40% true ... he is not snide and sarcastic in a cruel way, the way Zuckerberg is played in the movie." He says that "a lot of the factual incidents are accurate, but many are distorted and the overall impression is false", and concludes that primarily "his motivations were to try and come up with a new way to share information on the Internet".[103] Although the film portrayed Zuckerberg's creation of Facebook in order to elevate his stature after not getting into any of the elite final clubs at Harvard, Zuckerberg stated that he had no interest in joining the clubs.[7] Kirkpatrick agreed that the impression implied by the film is "false". Karel Baloun, a former senior engineer at Facebook, noted that the "image of Zuckerberg as a socially inept nerd is overstated ... It is fiction ..." He likewise dismissed the film's assertion that he "would deliberately betray a friend."[103] Other depictions Zuckerberg voiced himself on an episode of The Simpsons titled "Loan-a Lisa", which first aired on October 3, 2010. In the episode, Lisa Simpson and her friend Nelson encounter Zuckerberg at an entrepreneurs' convention. Zuckerberg tells Lisa that she does not need to graduate from college to be wildly successful, referencing Bill Gates and Richard Branson as examples.[104] On October 9, 2010, Saturday Night Live lampooned Zuckerberg and Facebook.[105] Andy Samberg portrayed the role of Zuckerberg. Zuckerberg himself was reported to have been amused: "I thought this was funny."[106] Stephen Colbert awarded a "Medal of Fear" to Zuckerberg at the Rally to Restore Sanity and/or Fear on October 30, 2010, "because he values his privacy much more than he values yours".[107] Zuckerberg appeared in the climax of 2013 documentary film Terms and Conditions May Apply.[108][109][110] The South Park episode "Franchise Prequel" mocked him. According to CNET, he was portrayed as "a rosy-cheeked bully nerd who utters strange noises, makes peculiar kung fu gestures and turns up wherever he likes in people's houses".[111] Philanthropy and Chan Zuckerberg Initiative See also: Chan Zuckerberg Initiative Zuckerberg and his wife Priscilla Chan in May 2013 Zuckerberg founded the Start-up: Education foundation.[112] On September 22, 2010, it was reported that he had donated $100 million to Newark Public Schools, the public school system of Newark, New Jersey.[113][114] Critics noted the timing of the donation as being close to the release of The Social Network, which painted a somewhat negative portrait of Zuckerberg.[115] Zuckerberg responded to the criticism, saying, "The thing that I was most sensitive about with the movie timing was, I didn't want the press about The Social Network movie to get conflated with the Newark project. I was thinking about doing this anonymously just so that the two things could be kept separate."[116] Newark Mayor Cory Booker stated that he and New Jersey Governor Chris Christie had to convince Zuckerberg's team not to make the donation anonymously.[116] The money was largely wasted, according to journalist Dale Russakoff.[117][118] In 2010, Zuckerberg, Bill Gates, and investor Warren Buffett signed "The Giving Pledge", in which they said they would donate to charity at least half of their wealth over the course of time, and invited others among the wealthy to donate 50 percent or more of their wealth to charity.[119] In December 2012, Zuckerberg and his wife Priscilla Chan said that over the course of their lives they would give the majority of their wealth to "advancing human potential and promoting equality" in the spirit of The Giving Pledge.[120][121] On December 19, 2013, Zuckerberg announced a donation of 18 million Facebook shares to the Silicon Valley Community Foundation, to be executed by the end of the month—based on Facebook's valuation as of then, the shares totaled $990 million in value. On December 31, 2013, the donation was recognized as the largest charitable gift on public record for 2013.[122] The Chronicle of Philanthropy placed Zuckerberg and his wife at the top of the magazine's annual list of 50 most generous Americans for 2013, having donated roughly $1 billion to charity.[123] In October 2014, Zuckerberg and his wife donated US$25 million to combat the Ebola virus disease, specifically the West African Ebola virus epidemic.[124][125] On December 1, 2015, Zuckerberg and Chan pledged to transfer 99% of their Facebook shares, then valued at US$45 billion, to the Chan Zuckerberg Initiative.[126] The funds would not be transferred immediately, but over the course of their lives.[127] Instead of forming a charitable corporation to donate the value of the stock to, as Bill Gates, Warren Buffett, Larry Page, Sergey Brin and other billionaires have done, Zuckerberg and Chan chose to use the structure of a limited liability company (LLC). Some journalists and academics have said the Chan Zuckerberg Initiative conducts philanthrocapitalism.[128][129][130] In 2016, the Chan Zuckerberg Initiative gave $600 million to create the tax-exempt charity Chan Zuckerberg Biohub, a collaborative research space in San Francisco's Mission Bay District near the University of California, San Francisco, with the intent to foster interaction and collaboration between scientists at UCSF, University of California, Berkeley, and Stanford University. Intellectual property generated would be jointly owned by Biohub and the discoverer's home institution. Unlike foundations like the Bill and Melinda Gates Foundation which open up all research funded to unrestricted access and reuse by the public, Biohub retained the right to commercialize any research it funds. Inventors will have the option of making their discoveries open-source, with permission from Biohub.[131][132][133] To increase access to scientific research and promote open science, CZ Biohub requires its investigators and staff scientists to publish submitted manuscripts and related data on preprints servers like bioRxiv.[134][135] Amidst the COVID-19 pandemic, Zuckerberg donated $25 million to a Bill and Melinda Gates Foundation-backed accelerator that is searching for treatments for the disease.[136] He also announced $25 million in grants to support local journalism that was impacted by the pandemic and $75 million in advertisement purchases in local newspapers by Facebook, Inc., where Facebook would market itself.[137] Politics With then President Barack Obama before a private meeting between Obama and technology business leaders in February 2011 In 2002, Zuckerberg registered to vote in Westchester County, New York, where he grew up, but did not cast a ballot until November 2008. Then Santa Clara County Registrar of Voters Spokeswoman, Elma Rosas, told Bloomberg that Zuckerberg is listed as "no preference" on voter rolls, and he voted in at least two of the past three general elections, in 2008 and 2012.[138][139] Zuckerberg has never revealed his own political affiliation or voting history: some news outlets consider him to be a conservative,[140] while others consider him liberal.[141] On February 13, 2013, Zuckerberg hosted his first ever fundraising event for then New Jersey Governor Chris Christie. Zuckerberg's particular interest on this occasion was education reform, and Christie's education reform work focused on teachers unions and the expansion of charter schools.[142][143] Later that year, Zuckerberg hosted a campaign fundraiser for then Newark mayor Cory Booker, who was running in the 2013 New Jersey special Senate election.[144] In September 2010, with the support of Governor Chris Christie, Booker obtained a US$100 million pledge from Zuckerberg to Newark Public Schools.[145] In December 2012, Zuckerberg donated 18 million shares to the Silicon Valley Community Foundation, a community organization that includes education in its list of grant-making areas.[146][147] With then Argentine President Cristina Fernández de Kirchner in April 2015 On April 11, 2013, Zuckerberg led the launch of a 501(c)(4) lobbying group called FWD.us. The founders and contributors to the group were primarily Silicon Valley entrepreneurs and investors, and its president was Joe Green, a close friend of Zuckerberg.[148][149][150][151] The goals of the group include immigration reform, improving the state of education in the United States, and enabling more technological breakthroughs that benefit the public,[152][153] yet it has also been criticized for financing ads advocating a variety of oil and gas development initiatives, including drilling in the Arctic National Wildlife Refuge and the Keystone XL pipeline.[154] In 2013, numerous liberal and progressive groups, such as The League of Conservation Voters, MoveOn.org, the Sierra Club, Democracy for America, CREDO, Daily Kos, 350.org, and Presente and Progressives United agreed to either pull their Facebook ad buys or not buy Facebook ads for at least two weeks, in protest of Zuckerberg ads funded by FWD.us that were in support of oil drilling and the Keystone XL pipeline, and in opposition to Obamacare among Republican United States senators who back immigration reform.[clarification needed][155] A media report on June 20, 2013, revealed that Zuckerberg actively engaged with Facebook users on his own profile page after the online publication of a FWD.us video. In response to a claim that the FWD.us organization is "just about tech wanting to hire more people", the Internet entrepreneur replied: "The bigger problem we're trying to address is ensuring the 11 million undocumented folks living in this country now and similar folks in the future are treated fairly."[156] In June 2013, Zuckerberg joined Facebook employees in a company float as part of the annual San Francisco Lesbian, Gay, Bisexual, and Transgender Pride Celebration. The company first participated in the event in 2011, with 70 employees, and this number increased to 700 for the 2013 march. The 2013 pride celebration was especially significant, as it followed a U.S. Supreme Court ruling that deemed the Defense of Marriage Act (DOMA) unconstitutional.[157][158] With then President Donald Trump at the White House in September 2019 When questioned about the mid-2013 PRISM scandal at the TechCrunch Disrupt conference in September 2013, Zuckerberg stated that the U.S. government "blew it". He further explained that the government performed poorly in regard to the protection of the freedoms of its citizens, the economy, and companies.[51] Zuckerberg placed a statement on his Facebook wall on December 9, 2015, which said that he wants "to add my voice in support of Muslims in our community and around the world" in response to the aftermath of the November 2015 Paris attacks and the 2015 San Bernardino attack.[159][160][161][162] The statement also said that Muslims are "always welcome" on Facebook, and that his position was a result of the fact that "as a Jew, my parents taught me that we must stand up against attacks on all communities."[163][164] On February 24, 2016, Zuckerberg sent out a company-wide internal memo to employees formally rebuking employees who had crossed out handwritten "Black Lives Matter" phrases on the company walls and had written "All Lives Matter" in their place. Facebook allows employees to free-write thoughts and phrases on company walls. The memo was then leaked by several employees. As Zuckerberg had previously condemned this practice at previous company meetings, and other similar requests had been issued by other leaders at Facebook, Zuckerberg wrote in the memo that he would now consider this overwriting practice not only disrespectful, but "malicious as well." According to Zuckerberg's memo, "Black Lives Matter doesn't mean other lives don't – it's simply asking that the black community also achieves the justice they deserve." The memo also noted that the act of crossing something out in itself, "means silencing speech, or that one person's speech is more important than another's." Zuckerberg also said in the memo that he would be launching investigations into the incidents.[165][166][167] The New York Daily News interviewed Facebook employees who commented anonymously that, "Zuckerberg was genuinely angry about the incident and it really encouraged staff that Zuckerberg showed a clear understanding of why the phrase 'Black Lives Matter' must exist, as well as why writing through it is a form of harassment and erasure."[165] In January 2017, he criticized Donald Trump's executive order to severely limit immigrants and refugees from some countries.[168] Zuckerberg funded a state-level ballot initiative for the 2020 general election that would raise taxes by altering California's Proposition 13 to require the tax assessment of commercial and industrial properties in the state at market rate.[169] Personal life Marriage and children With his wife, Priscilla Chan, in 2014 Zuckerberg met his future wife, fellow Harvard student Priscilla Chan, at a frat party during his sophomore year there. They began dating in 2003.[170][171] In September 2010, Chan, who was by then a medical student at the University of California, San Francisco,[172] moved into Zuckerberg's rented house in Palo Alto, California.[173][174] On May 19, 2012, they married in the grounds of his mansion in an event that also celebrated her graduation from medical school.[175][176][177] On July 31, 2015, Zuckerberg revealed they were expecting a baby girl and that Chan had previously experienced three miscarriages.[178] Their daughter, Maxima Chan Zuckerberg, was born on December 1, 2015.[179][180] They announced in a Chinese New Year video that their daughter's Chinese name is Chen Mingyu (Chinese: 陈明宇).[181] Their second daughter, August, was born in August 2017.[182] Zuckerberg and his wife welcomed their third daughter Aurelia on March 24, 2023, and announced the news across his social media pages.[183] The couple also have a Puli dog named Beast,[184] who has over two million followers on Facebook.[185] Religious beliefs and other interests Raised as a Reform Jew, Zuckerberg later identified as an atheist. However, he said in 2016 that "I went through a period where I questioned things, but now I believe religion is very important."[9][186][187] In 2017, Zuckerberg and his wife began a nationwide tour "to visit every state in the union and learn more about a sliver of the nearly two billion people who regularly use the social network". He met with farmers and business owners, and spoke at Mother Emanuel, where a shooting took place in 2015.[188][189] In an August 2022 appearance on The Joe Rogan Experience, Zuckerberg said one of his biggest regrets was competing on the fencing team in high school instead of wrestling. Motherboard implicitly criticized this by comparing it to another potential regret: Facebook's "enabling genocide in Myanmar because it did not bother to hire moderators who speak Burmese",[190] an incident for which Zuckerberg apologized at the time.[191] In the same interview, he also said he regretted that Facebook had throttled posts about the Hunter Biden laptop controversy.[192] In 2022, Zuckerberg took up training in both mixed martial arts (MMA) and Brazilian jiu-jitsu (BJJ), and has been open about his love for the two sports.[193] He competed in a BJJ tournament on May 6, 2023, and won both a silver and gold medal in gi and no gi, competing at white belt.[194] On July 22, 2023, Zuckerberg was promoted to blue belt in Brazilian jiu-jitsu by Dave Camarillo.[195] Four months later, Zuckerberg announced that he was preparing to make his MMA debut but had suffered an anterior cruciate ligament injury in training that required surgery and had delayed this.[196]

Why Texas is the Most Powerful State in America Texas, which was once part of Mexico. Today, it's an economic powerhouse in the United States next to California. It has a GDP of 2.4 trillion dollars which is almost

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

How do we know what’s real anymore Last year - none of this was possible for me. Last night – I made this in a few hours.Some of the techniques used in this video were only reserved for the most seasoned Hollywood. Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions. 2024

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.[1][2][3] The primary functions which distinguish money are: medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Money was historically an emergent market phenomenon that possessed intrinsic value as a commodity; nearly all contemporary money systems are based on unbacked fiat money without use value.[4] Its value is consequently derived by social convention, having been declared by a government or regulatory entity to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for "all debts, public and private", in the case of the United States dollar. The money supply of a country comprises all currency in circulation (banknotes and coins currently issued) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries. Etymology The word money derives from the Latin word moneta with the meaning "coin" via French monnaie. The Latin word is believed to originate from a temple of Juno, on Capitoline, one of Rome's seven hills. In the ancient world, Juno was often associated with money. The temple of Juno Moneta at Rome was the place where the mint of Ancient Rome was located.[5] The name "Juno" may have derived from the Etruscan goddess Uni and "Moneta" either from the Latin word "monere" (remind, warn, or instruct) or the Greek word "moneres" (alone, unique). In the Western world a prevalent term for coin-money has been specie, stemming from Latin in specie, meaning "in kind".[6] History Main article: History of money A 640 BC one-third stater electrum coin from Lydia The use of barter-like methods may date back to at least 100,000 years ago, though there is no evidence of a society or economy that relied primarily on barter.[7][8] Instead, non-monetary societies operated largely along the principles of gift economy and debt.[9][10] When barter did in fact occur, it was usually between either complete strangers or potential enemies.[11] Many cultures around the world eventually developed the use of commodity money. The Mesopotamian shekel was a unit of weight, and relied on the mass of something like 160 grains of barley.[12] The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money—often, the shells of the cowry (Cypraea moneta L. or C. annulus L.). According to Herodotus, the Lydians were the first people to introduce the use of gold and silver coins.[13] It is thought by modern scholars that these first stamped coins were minted around 650 to 600 BC.[14] Song Dynasty Jiaozi, the world's earliest paper money The system of commodity money eventually evolved into a system of representative money.[citation needed] This occurred because gold and silver merchants or banks would issue receipts to their depositors, redeemable for the commodity money deposited. Eventually, these receipts became generally accepted as a means of payment and were used as money. Paper money or banknotes were first used in China during the Song dynasty. These banknotes, known as "jiaozi", evolved from promissory notes that had been used since the 7th century. However, they did not displace commodity money and were used alongside coins. In the 13th century, paper money became known in Europe through the accounts of travellers, such as Marco Polo and William of Rubruck.[15] Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled "How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country."[16] Banknotes were first issued in Europe by Stockholms Banco in 1661 and were again also used alongside coins. The gold standard, a monetary system where the medium of exchange are paper notes that are convertible into pre-set, fixed quantities of gold, replaced the use of gold coins as currency in the 17th–19th centuries in Europe. These gold standard notes were made legal tender, and redemption into gold coins was discouraged. By the beginning of the 20th century, almost all countries had adopted the gold standard, backing their legal tender notes with fixed amounts of gold. After World War II and the Bretton Woods Conference, most countries adopted fiat currencies that were fixed to the U.S. dollar. The U.S. dollar was in turn fixed to gold. In 1971 the U.S. government suspended the convertibility of the dollar to gold. After this many countries de-pegged their currencies from the U.S. dollar, and most of the world's currencies became unbacked by anything except the governments' fiat of legal tender and the ability to convert the money into goods via payment. According to proponents of modern money theory, fiat money is also backed by taxes. By imposing taxes, states create demand for the currency they issue.[17] Functions See also: Monetary economics Part of a series on Macroeconomics Bank of England Basic concepts Policies Models Related fields Schools People See also icon Money portal icon Business portal vte In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value (or unit of account), a standard of value (or standard of deferred payment), and a store of value. By 1919, Jevons's four functions of money were summarized in the couplet: Money's a matter of functions four, A Medium, a Measure, a Standard, a Store.[18] This couplet would later become widely popular in macroeconomics textbooks.[19] Most modern textbooks now list only three functions, that of medium of exchange, unit of account, and store of value, not considering a standard of deferred payment as a distinguished function, but rather subsuming it in the others.[4][20][21] There have been many historical disputes regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange conflicts with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate.[22] Others argue that storing of value is just deferral of the exchange, but does not diminish the fact that money is a medium of exchange that can be transported both across space and time. The term "financial capital" is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender. Medium of exchange Main article: Medium of exchange When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. It thereby avoids the inefficiencies of a barter system, such as the inability to permanently ensure "coincidence of wants". For example, between two parties in a barter system, one party may not have or make the item that the other wants, indicating the non-existence of the coincidence of wants. Having a medium of exchange can alleviate this issue because the former can have the freedom to spend time on other items, instead of being burdened to only serve the needs of the latter. Meanwhile, the latter can use the medium of exchange to seek for a party that can provide them with the item they want. Measure of value Main article: Unit of account A unit of account (in economics)[23] is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems like double-entry bookkeeping. Standard of deferred payment Main article: Standard of deferred payment While standard of deferred payment is distinguished by some texts,[22] particularly older ones, other texts subsume this under other functions.[4][20][21][clarification needed] A "standard of deferred payment" is an accepted way to settle a debt—a unit in which debts are denominated, and the status of money as legal tender, in those jurisdictions which have this concept, states that it may function for the discharge of debts. When debts are denominated in money, the real value of debts may change due to inflation and deflation, and for sovereign and international debts via debasement and devaluation. Store of value Main article: Store of value To act as a store of value, money must be able to be reliably saved, stored, and retrieved—and be predictably usable as a medium of exchange when it is retrieved. The value of the money must also remain stable over time. Some have argued that inflation, by reducing the value of money, diminishes the ability of the money to function as a store of value.[4][failed verification] Properties The functions of money are that it is a medium of exchange, a unit of account, and a store of value.[24] To fulfill these various functions, money must be:[25] Fungible: its individual units must be capable of mutual substitution (i.e., interchangeability). Durable: able to withstand repeated use. Divisible: divisible to small units. Portable: easily carried and transported. Acceptable: most people must accept the money as payment Scarce: its supply in circulation must be limited.[25] Money supply Main article: Money supply Money Base, M1 and M2 in the U.S. from 1981 to 2012 Printing paper money at a printing press in Perm A person counts a bundle of different Swedish banknotes. In economics, money is any financial instrument that can fulfill the functions of money (detailed above). These financial instruments together are collectively referred to as the money supply of an economy. In other words, the money supply is the number of financial instruments within a specific economy available for purchasing goods or services. Since the money supply consists of various financial instruments (usually currency, demand deposits, and various other types of deposits), the amount of money in an economy is measured by adding together these financial instruments creating a monetary aggregate. Economists employ different ways to measure the stock of money or money supply, reflected in different types of monetary aggregates, using a categorization system that focuses on the liquidity of the financial instrument used as money. The most commonly used monetary aggregates (or types of money) are conventionally designated M1, M2, and M3. These are successively larger aggregate categories: M1 is currency (coins and bills) plus demand deposits (such as checking accounts); M2 is M1 plus savings accounts and time deposits under $100,000; M3 is M2 plus larger time deposits and similar institutional accounts. M1 includes only the most liquid financial instruments, and M3 relatively illiquid instruments. The precise definition of M1, M2, etc. may be different in different countries. Another measure of money, M0, is also used. M0 is base money, or the amount of money actually issued by the central bank of a country. It is measured as currency plus deposits of banks and other institutions at the central bank. M0 is also the only money that can satisfy the reserve requirements of commercial banks. Creation of money Main article: Money creation In current economic systems, money is created by two procedures:[citation needed] Legal tender, or narrow money (M0) is the cash created by a Central Bank by minting coins and printing banknotes. Bank money, or broad money (M1/M2) is the money created by private banks through the recording of loans as deposits of borrowing clients, with partial support indicated by the cash ratio. Currently, bank money is created as electronic money. Bank money, whose value exists on the books of financial institutions and can be converted into physical notes or used for cashless payment, forms by far the largest part of broad money in developed countries.[26][27][28] In most countries, the majority of money is mostly created as M1/M2 by commercial banks making loans. Contrary to some popular misconceptions, banks do not act simply as intermediaries, lending out deposits that savers place with them, and do not depend on central bank money (M0) to create new loans and deposits.[29] Market liquidity Main article: Market liquidity "Market liquidity" describes how easily an item can be traded for another item, or into the common currency within an economy. Money is the most liquid asset because it is universally recognized and accepted as a common currency. In this way, money gives consumers the freedom to trade goods and services easily without having to barter. Liquid financial instruments are easily tradable and have low transaction costs. There should be no (or minimal) spread between the prices to buy and sell the instrument being used as money. Types Commodity Main article: Commodity money A 1914 British gold sovereign Many items have been used as commodity money such as naturally scarce precious metals, conch shells, barley, beads, etc., as well as many other things that are thought of as having value. Commodity money value comes from the commodity out of which it is made. The commodity itself constitutes the money, and the money is the commodity.[30] Examples of commodities that have been used as mediums of exchange include gold, silver, copper, rice, Wampum, salt, peppercorns, large stones, decorated belts, shells, alcohol, cigarettes, cannabis, candy, etc. These items were sometimes used in a metric of perceived value in conjunction with one another, in various commodity valuation or price system economies. The use of commodity money is similar to barter, but a commodity money provides a simple and automatic unit of account for the commodity which is being used as money. Although some gold coins such as the Krugerrand are considered legal tender, there is no record of their face value on either side of the coin. The rationale for this is that emphasis is laid on their direct link to the prevailing value of their fine gold content.[31] American Eagles are imprinted with their gold content and legal tender face value.[32] Representative Main article: Representative money In 1875, the British economist William Stanley Jevons described the money used at the time as "representative money". Representative money is money that consists of token coins, paper money or other physical tokens such as certificates, that can be reliably exchanged for a fixed quantity of a commodity such as gold or silver. The value of representative money stands in direct and fixed relation to the commodity that backs it, while not itself being composed of that commodity.[33] Fiat Main article: Fiat money Gold coins are an example of legal tender that are traded for their intrinsic value, rather than their face value. Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful not to accept the fiat currency as a means of repayment for all debts, public and private.[34][35] Some bullion coins such as the Australian Gold Nugget and American Eagle are legal tender, however, they trade based on the market price of the metal content as a commodity, rather than their legal tender face value (which is usually only a small fraction of their bullion value).[32][36] Fiat money, if physically represented in the form of currency (paper or coins), can be accidentally damaged or destroyed. However, fiat money has an advantage over representative or commodity money, in that the same laws that created the money can also define rules for its replacement in case of damage or destruction. For example, the U.S. government will replace mutilated Federal Reserve Notes (U.S. fiat money) if at least half of the physical note can be reconstructed, or if it can be otherwise proven to have been destroyed.[37] By contrast, commodity money that has been lost or destroyed cannot be recovered. Coinage Main article: Coin These factors led to the shift of the store of value being the metal itself: at first silver, then both silver and gold, and at one point there was bronze as well. Now we have copper coins and other non-precious metals as coins. Metals were mined, weighed, and stamped into coins. This was to assure the individual taking the coin that he was getting a certain known weight of precious metal. Coins could be counterfeited, but they also created a new unit of account, which helped lead to banking. Archimedes' principle provided the next link: coins could now be easily tested for their fine weight of the metal, and thus the value of a coin could be determined, even if it had been shaved, debased or otherwise tampered with (see Numismatics). In most major economies using coinage, copper, silver, and gold formed three tiers of coins. Gold coins were used for large purchases, payment of the military, and backing of state activities. Silver coins were used for midsized transactions, and as a unit of account for taxes, dues, contracts, and fealty, while copper coins represented the coinage of common transaction. This system had been used in ancient India since the time of the Mahajanapadas. In Europe, this system worked through the medieval period because there was virtually no new gold, silver, or copper introduced through mining or conquest.[citation needed] Thus the overall ratios of the three coinages remained roughly equivalent. Paper Main article: Banknote Huizi currency, issued in 1160 In premodern China, the need for credit and for circulating a medium that was less of a burden than exchanging thousands of copper coins led to the introduction of paper money. This economic phenomenon was a slow and gradual process that took place from the late Tang dynasty (618–907) into the Song dynasty (960–1279). It began as a means for merchants to exchange heavy coinage for receipts of deposit issued as promissory notes from shops of wholesalers, notes that were valid for temporary use in a small regional territory. In the 10th century, the Song dynasty government began circulating these notes amongst the traders in their monopolized salt industry. The Song government granted several shops the sole right to issue banknotes, and in the early 12th century the government finally took over these shops to produce state-issued currency. Yet the banknotes issued were still regionally valid and temporary; it was not until the mid 13th century that a standard and uniform government issue of paper money was made into an acceptable nationwide currency. The already widespread methods of woodblock printing and then Pi Sheng's movable type printing by the 11th century was the impetus for the massive production of paper money in premodern China. Paper money from different countries At around the same time in the medieval Islamic world, a vigorous monetary economy was created during the 7th–12th centuries on the basis of the expanding levels of circulation of a stable high-value currency (the dinar). Innovations introduced by economists, traders and merchants of the Muslim world include the earliest uses of credit,[38] cheques, savings accounts, transactional accounts, loaning, trusts, exchange rates, the transfer of credit and debt,[39] and banking institutions for loans and deposits.[39][need quotation to verify] In Europe, paper money was first introduced in Sweden in 1661. Sweden was rich in copper, thus, because of copper's low value, extraordinarily big coins (often weighing several kilograms) had to be made. The advantages of paper currency were numerous: it reduced transport of gold and silver, and thus lowered the risks; it made loaning gold or silver at interest easier since the specie (gold or silver) never left the possession of the lender until someone else redeemed the note; and it allowed for a division of currency into credit and specie backed forms. It enabled the sale of stock in joint stock companies, and the redemption of those shares in the paper. However, these advantages are held within their disadvantages. First, since a note has no intrinsic value, there was nothing to stop issuing authorities from printing more of it than they had specie to back it with. Second, because it increased the money supply, it increased inflationary pressures, a fact observed by David Hume in the 18th century. The result is that paper money would often lead to an inflationary bubble, which could collapse if people began demanding hard money, causing the demand for paper notes to fall to zero. The printing of paper money was also associated with wars, and financing of wars, and therefore regarded as part of maintaining a standing army. For these reasons, paper currency was held in suspicion and hostility in Europe and America. It was also addictive since the speculative profits of trade and capital creation were quite large. Major nations established mints to print money and mint coins, and branches of their treasury to collect taxes and hold gold and silver stock. At this time both silver and gold were considered legal tender, and accepted by governments for taxes. However, the instability in the ratio between the two grew over the 19th century, with the increase both in the supply of these metals, particularly silver, and of trade. This is called bimetallism and the attempt to create a bimetallic standard where both gold and silver backed currency remained in circulation occupied the efforts of inflationists. Governments at this point could use currency as an instrument of policy, printing paper currency such as the United States greenback, to pay for military expenditures. They could also set the terms at which they would redeem notes for specie, by limiting the amount of purchase, or the minimum amount that could be redeemed. Banknotes of different currencies with a face value of 5000 By 1900, most of the industrializing nations were on some form of a gold standard, with paper notes and silver coins constituting the circulating medium. Private banks and governments across the world followed Gresham's law: keeping gold and silver paid but paying out in notes. This did not happen all around the world at the same time, but occurred sporadically, generally in times of war or financial crisis, beginning in the early part of the 20th century and continuing across the world until the late 20th century, when the regime of floating fiat currencies came into force. One of the last countries to break away from the gold standard was the United States in 1971. No country anywhere in the world today has an enforceable gold standard or silver standard currency system. Commercial bank Main article: Demand deposit A check, used as a means of converting funds in a demand deposit to cash Commercial bank money or demand deposits are claims against financial institutions that can be used for the purchase of goods and services. A demand deposit account is an account from which funds can be withdrawn at any time by check or cash withdrawal without giving the bank or financial institution any prior notice. Banks have the legal obligation to return funds held in demand deposits immediately upon demand (or 'at call'). Demand deposit withdrawals can be performed in person, via checks or bank drafts, using automatic teller machines (ATMs), or through online banking.[40] Commercial bank money is created by commercial banks whose reserves (held as cash and other highly liquid assets) typically constitute only a fraction of their deposits, while the banks maintain an obligation to redeem all these deposits upon demand - a practise known as fractional-reserve banking.[41] Commercial bank money differs from commodity and fiat money in two ways: firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The money multiplier theory presents the process of creating commercial bank money as a multiple (greater than 1) of the amount of base money created by the country's central bank, the multiple itself being a function of the legal regulation of banks imposed by financial regulators (e.g., potential reserve requirements) beside the business policies of commercial banks and the preferences of households - factors which the central bank can influence, but not control completely.[42] Contemporary central banks generally do not control the creation of money, nor do they try to, though their interest rate-setting monetary policies naturally affect the amount of loans and deposits that commercial banks create.[43][44][45] Digital or electronic Main article: Digital money The development of computer technology in the second part of the twentieth century allowed money to be represented digitally. By 1990, in the United States all money transferred between its central bank and commercial banks was in electronic form. By the 2000s most money existed as digital currency in bank databases.[46] In 2012, by number of transaction, 20 to 58 percent of transactions were electronic (dependent on country).[47] Anonymous digital currencies were developed in the early 2000s. Early examples include Ecash, bit gold, RPOW, and b-money. Not much innovation occurred until the conception of Bitcoin in 2008, which introduced the concept of a decentralised currency that requires no trusted third party.[48] Monetary policy Main article: Monetary policy US dollar banknotes When gold and silver were used as money, the money supply could grow only if the supply of these metals was increased by mining. This rate of increase would accelerate during periods of gold rushes and discoveries, such as when Columbus traveled to the New World and brought back gold and silver to Spain, or when gold was discovered in California in 1848. This caused inflation, as the value of gold went down. However, if the rate of gold mining could not keep up with the growth of the economy, gold became relatively more valuable, and prices (denominated in gold) would drop, causing deflation. Deflation was the more typical situation for over a century when gold and paper money backed by gold were used as money in the 18th and 19th centuries. Modern-day monetary systems are based on fiat money and are no longer tied to the value of gold. The amount of money in the economy is influenced by monetary policy, which is the process by which a central bank influences the economy to achieve specific goals. Often, the goal of monetary policy is to maintain low and stable inflation, directly via an inflation targeting strategy,[49] or indirectly via a fixed exchange rate system against a major currency with a stable inflation rate.[50] In some cases, the central bank may pursue various supplementary goals. For example, it is clearly stated in the Federal Reserve Act that the Board of Governors and the Federal Open Market Committee should seek "to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."[51] A failed monetary policy can have significant detrimental effects on an economy and the society that depends on it. These include hyperinflation, stagflation, recession, high unemployment, shortages of imported goods, inability to export goods, and even total monetary collapse and the adoption of a much less efficient barter economy. This happened in Russia, for instance, after the fall of the Soviet Union. Monetary policy strategies have changed over time.[52] Some of the tools used to conduct contemporary monetary policy include:[53] changing the interest rate at which the central bank loans money to (or borrows money from) the commercial banks open market operations including currency purchases or sales forward guidance, i.e. publishing forecasts to communicate the likely future course of monetary policy raising or lowering bank reserve requirements In the U.S., the Federal Reserve is responsible for conducting monetary policy, while in the eurozone the respective institution is the European Central Bank. Other central banks with a significant impact on global finances are the Bank of Japan, People's Bank of China and the Bank of England. During the 1970s and 1980s monetary policy in several countries was influenced by an economic theory known as monetarism. Monetarism argued that management of the money supply should be the primary means of regulating economic activity. The stability of the demand for money prior to the 1980s was a key finding of Milton Friedman and Anna Schwartz[54] supported by the work of David Laidler,[55] and many others. It turned out, however, that maintaining a monetary policy strategy of targeting the money supply did not work very well: The relation between money growth and inflation was not as tight as expected by monetarist theory, and the short-run relation between the money supply and the interest rate, which is the chief instrument through which the cental bank can influence output and inflation, was unreliable. Both problems were due to unpredictable shifts in the demand for money. Consequently, starting in the early 1990s a fundamental reorientation took place in most major central banks, starting to target inflation directly instead of the money supply and using the interest rate as their main instrument.[56] Locality President J. K. Paasikivi illustrated in a former Finnish 10 mark banknote from 1980 The definition of money says it is money only "in a particular country or socio-economic context". In general, communities only use a single measure of value, which can be identified in the prices of goods listed for sale. There might be multiple media of exchange, which can be observed by what is given to purchase goods ("medium of exchange"), etc. In most countries, the government acts to encourage a particular forms of money, such as requiring it for taxes and punishing fraud. Some places do maintain two or more currencies, particularly in border towns or high-travel areas. Shops in these locations might list prices and accept payment in multiple currencies. Otherwise, foreign currency is treated as a financial asset in the local market. Foreign currency is commonly bought or sold on foreign exchange markets by travelers and traders. Communities can change the money they use, which is known as currency substitution. This can happen intentionally, when a government issues a new currency. For example, when Brazil moved from the Brazilian cruzeiro to the Brazilian real. It can also happen spontaneously, when the people refuse to accept a currency experiencing hyperinflation (even if its use is encouraged by the government). The money used by a community can change on a smaller scale. This can come through innovation, such as the adoption of cheques (checks). Gresham's law says that "bad money drives out good". That is, when buying a good, a person is more likely to pass on less-desirable items that qualify as "money" and hold on to more valuable ones. For example, coins with less silver in them (but which are still valid coins) are more likely to circulate in the community. This may effectively change the money used by a community. The money used by a community does not have to be a currency issued by a government. A famous example of community adopting a new form of money is prisoners-of-war using cigarettes to trade.[57] Financial crimes Counterfeiting Main article: Counterfeit money Counterfeit money is imitation currency produced without the legal sanction of the state or government. Producing or using counterfeit money is a form of fraud or forgery. Counterfeiting is almost as old as money itself. Plated copies (known as Fourrées) have been found of Lydian coins which are thought to be among the first western coins.[58] Historically, objects that were difficult to counterfeit (e.g. shells, rare stones, precious metals) were often chosen as money.[59] Before the introduction of paper money, the most prevalent method of counterfeiting involved mixing base metals with pure gold or silver. A form of counterfeiting is the production of documents by legitimate printers in response to fraudulent instructions. During World War II, the Nazis forged British pounds and American dollars. Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real U.S. dollar. There has been significant counterfeiting of Euro banknotes and coins since the launch of the currency in 2002, but considerably less than for the U.S. dollar.[60] Money laundering Main article: Money laundering Money laundering is the process in which the proceeds of crime are transformed into ostensibly legitimate money or other assets. However, in several legal and regulatory systems the term money laundering has become conflated with other forms of financial crime, and sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing, tax evasion, and evading of international sanctions.

Damon Anthony Dash (born May 3, 1971) is an American entrepreneur and record executive.[4] Dash is best known as co-founder of Roc-A-Fella along with Jay-Z and Kareem Burke.[5] Early life Born in New York City, Dash swept the floors of a local barbershop and sold newspapers in order to buy sneakers and shirts as a teenager. Dash "learned to hustle", in his own words, from the example of his mother, who died of an asthma attack when he was 15.[6] The same year, Dash was diagnosed with type 1 diabetes.[7] "Before I was diagnosed... I went about a month or two just going to the bathroom non-stop and losing weight," Dash recalled. "Magic Johnson had just been diagnosed with AIDS, so that's what I thought I had. I was scared to even go to the doctor. I thought I was going to die."[7] Career Dash served as Jay-Z's manager and business partner at Roc-A-Fella Records, and in 1999, he organized a tour for Jay-Z which made $19 million.[8] Their relationship soured as a result of two subsequent events. The first was when Roc-A-Fella Records was purchased by Def Jam Recordings (which had previously only owned half of the company) in 2004, after which Jay-Z agreed to take a job as Def Jam's president. Then, in late 2005, Jay-Z bought Dash out of his stake in Rocawear.[9] In April 2014, it was announced that Dash is involved with Blind Debit, a fingerprint payment application being developed by Dez White.[10] Dash founded DD172, a media collective which encompasses: America Nu, a magazine; VNGRD79, a web design firm; BluRoc Records, a record label division.[11] It also includes an art gallery.[12] Personal life Dash met R&B singer Aaliyah in New York City in the summer of 2000 through his accountant,[13][14] and dated her until her death on August 25, 2001, in a plane crash in The Bahamas.[15] Though they were not formally engaged, in interviews given after Aaliyah's death, Dash stated that the couple had planned to marry.[16] In 2005, Dash married fashion designer Rachel Roy, whom he had dated prior to his relationship with Aaliyah. They met when she was working as an intern at Rocawear. Together they have two daughters, Ava Dash (born December 7, 1999) and Tallulah Dash (born May 14, 2008).[17] Following their divorce in 2009, they had a bitter custody battle.[18] Dash has a son, Dame "Boogie" Dash (born November 28, 1991), with former girlfriend Linda Williams.[17] Boogie stars in the reality television show Growing Up Hip Hop.[19] He also has another son, Lucky, born in 2004 with Cindy Morales.[17][20] Dash and his fiancée Raquel Horn have a son, Dusko Dash, born on November 14, 2020.[21] Legal issues In 2012, rapper Curren$y sued Dash for $1.5 million for releasing his music without permission.[22] Dash's attorney released a statement that Dash released the music on fair grounds.[23] In 2014, Dash was ordered to pay Linda Williams, the mother of his son Boogie, $50,000 for causing her to be prosecuted on harassment charges in 2009.[24] In April 2015, Dash's ex-wife, Rachel Roy, accused him of domestic abuse and filed for a restraining order.[18] Roy was awarded sole custody of their daughters. The court granted Roy and her daughters with a three-year restraining order against Dash.[25] Days later, Dash filed a $2.5 million claim against Roy in asserted damage for allegedly mishandling their joint fashion business, Royale Etenia.[26] In 2018, Dash settled a suit he filed against director Lee Daniels requesting $5 million to recoup a $2 million investment with interest.[27] Lee had received financial support from Dash early in his career, and reportedly failed to repay him despite his subsequent success.[28] In November 2019, Dash was arrested for failing to pay more than $400,000 in child support. Dash was in New York City for an unrelated Federal Court appearance when he was arrested for two warrants. The first warrant was issued in April 2015 in the Supreme Court in New York County case of Cindy Morales; he owed $62,553 since 2012.[29] The second warrant was issued in March 2019 in the Bronx Family Court case of Rachel Roy. He was ordered to pay her $341,991 and $25,000 for attorney fees in 2015.[30][29] Dash reportedly paid more than $1 million to be released

Damon Anthony Dash (born May 3, 1971) is an American entrepreneur and record executive.[4] Dash is best known as co-founder of Roc-A-Fella along with Jay-Z and Kareem Burke.[5] Early life Born in New York City, Dash swept the floors of a local barbershop and sold newspapers in order to buy sneakers and shirts as a teenager. Dash "learned to hustle", in his own words, from the example of his mother, who died of an asthma attack when he was 15.[6] The same year, Dash was diagnosed with type 1 diabetes.[7] "Before I was diagnosed... I went about a month or two just going to the bathroom non-stop and losing weight," Dash recalled. "Magic Johnson had just been diagnosed with AIDS, so that's what I thought I had. I was scared to even go to the doctor. I thought I was going to die."[7] Career Dash served as Jay-Z's manager and business partner at Roc-A-Fella Records, and in 1999, he organized a tour for Jay-Z which made $19 million.[8] Their relationship soured as a result of two subsequent events. The first was when Roc-A-Fella Records was purchased by Def Jam Recordings (which had previously only owned half of the company) in 2004, after which Jay-Z agreed to take a job as Def Jam's president. Then, in late 2005, Jay-Z bought Dash out of his stake in Rocawear.[9] In April 2014, it was announced that Dash is involved with Blind Debit, a fingerprint payment application being developed by Dez White.[10] Dash founded DD172, a media collective which encompasses: America Nu, a magazine; VNGRD79, a web design firm; BluRoc Records, a record label division.[11] It also includes an art gallery.[12] Personal life Dash met R&B singer Aaliyah in New York City in the summer of 2000 through his accountant,[13][14] and dated her until her death on August 25, 2001, in a plane crash in The Bahamas.[15] Though they were not formally engaged, in interviews given after Aaliyah's death, Dash stated that the couple had planned to marry.[16] In 2005, Dash married fashion designer Rachel Roy, whom he had dated prior to his relationship with Aaliyah. They met when she was working as an intern at Rocawear. Together they have two daughters, Ava Dash (born December 7, 1999) and Tallulah Dash (born May 14, 2008).[17] Following their divorce in 2009, they had a bitter custody battle.[18] Dash has a son, Dame "Boogie" Dash (born November 28, 1991), with former girlfriend Linda Williams.[17] Boogie stars in the reality television show Growing Up Hip Hop.[19] He also has another son, Lucky, born in 2004 with Cindy Morales.[17][20] Dash and his fiancée Raquel Horn have a son, Dusko Dash, born on November 14, 2020.[21] Legal issues In 2012, rapper Curren$y sued Dash for $1.5 million for releasing his music without permission.[22] Dash's attorney released a statement that Dash released the music on fair grounds.[23] In 2014, Dash was ordered to pay Linda Williams, the mother of his son Boogie, $50,000 for causing her to be prosecuted on harassment charges in 2009.[24] In April 2015, Dash's ex-wife, Rachel Roy, accused him of domestic abuse and filed for a restraining order.[18] Roy was awarded sole custody of their daughters. The court granted Roy and her daughters with a three-year restraining order against Dash.[25] Days later, Dash filed a $2.5 million claim against Roy in asserted damage for allegedly mishandling their joint fashion business, Royale Etenia.[26] In 2018, Dash settled a suit he filed against director Lee Daniels requesting $5 million to recoup a $2 million investment with interest.[27] Lee had received financial support from Dash early in his career, and reportedly failed to repay him despite his subsequent success.[28] In November 2019, Dash was arrested for failing to pay more than $400,000 in child support. Dash was in New York City for an unrelated Federal Court appearance when he was arrested for two warrants. The first warrant was issued in April 2015 in the Supreme Court in New York County case of Cindy Morales; he owed $62,553 since 2012.[29] The second warrant was issued in March 2019 in the Bronx Family Court case of Rachel Roy. He was ordered to pay her $341,991 and $25,000 for attorney fees in 2015.[30][29] Dash reportedly paid more than $1 million to be released

Damon Anthony Dash (born May 3, 1971) is an American entrepreneur and record executive.[4] Dash is best known as co-founder of Roc-A-Fella along with Jay-Z and Kareem Burke.[5] Early life Born in New York City, Dash swept the floors of a local barbershop and sold newspapers in order to buy sneakers and shirts as a teenager. Dash "learned to hustle", in his own words, from the example of his mother, who died of an asthma attack when he was 15.[6] The same year, Dash was diagnosed with type 1 diabetes.[7] "Before I was diagnosed... I went about a month or two just going to the bathroom non-stop and losing weight," Dash recalled. "Magic Johnson had just been diagnosed with AIDS, so that's what I thought I had. I was scared to even go to the doctor. I thought I was going to die."[7] Career Dash served as Jay-Z's manager and business partner at Roc-A-Fella Records, and in 1999, he organized a tour for Jay-Z which made $19 million.[8] Their relationship soured as a result of two subsequent events. The first was when Roc-A-Fella Records was purchased by Def Jam Recordings (which had previously only owned half of the company) in 2004, after which Jay-Z agreed to take a job as Def Jam's president. Then, in late 2005, Jay-Z bought Dash out of his stake in Rocawear.[9] In April 2014, it was announced that Dash is involved with Blind Debit, a fingerprint payment application being developed by Dez White.[10] Dash founded DD172, a media collective which encompasses: America Nu, a magazine; VNGRD79, a web design firm; BluRoc Records, a record label division.[11] It also includes an art gallery.[12] Personal life Dash met R&B singer Aaliyah in New York City in the summer of 2000 through his accountant,[13][14] and dated her until her death on August 25, 2001, in a plane crash in The Bahamas.[15] Though they were not formally engaged, in interviews given after Aaliyah's death, Dash stated that the couple had planned to marry.[16] In 2005, Dash married fashion designer Rachel Roy, whom he had dated prior to his relationship with Aaliyah. They met when she was working as an intern at Rocawear. Together they have two daughters, Ava Dash (born December 7, 1999) and Tallulah Dash (born May 14, 2008).[17] Following their divorce in 2009, they had a bitter custody battle.[18] Dash has a son, Dame "Boogie" Dash (born November 28, 1991), with former girlfriend Linda Williams.[17] Boogie stars in the reality television show Growing Up Hip Hop.[19] He also has another son, Lucky, born in 2004 with Cindy Morales.[17][20] Dash and his fiancée Raquel Horn have a son, Dusko Dash, born on November 14, 2020.[21] Legal issues In 2012, rapper Curren$y sued Dash for $1.5 million for releasing his music without permission.[22] Dash's attorney released a statement that Dash released the music on fair grounds.[23] In 2014, Dash was ordered to pay Linda Williams, the mother of his son Boogie, $50,000 for causing her to be prosecuted on harassment charges in 2009.[24] In April 2015, Dash's ex-wife, Rachel Roy, accused him of domestic abuse and filed for a restraining order.[18] Roy was awarded sole custody of their daughters. The court granted Roy and her daughters with a three-year restraining order against Dash.[25] Days later, Dash filed a $2.5 million claim against Roy in asserted damage for allegedly mishandling their joint fashion business, Royale Etenia.[26] In 2018, Dash settled a suit he filed against director Lee Daniels requesting $5 million to recoup a $2 million investment with interest.[27] Lee had received financial support from Dash early in his career, and reportedly failed to repay him despite his subsequent success.[28] In November 2019, Dash was arrested for failing to pay more than $400,000 in child support. Dash was in New York City for an unrelated Federal Court appearance when he was arrested for two warrants. The first warrant was issued in April 2015 in the Supreme Court in New York County case of Cindy Morales; he owed $62,553 since 2012.[29] The second warrant was issued in March 2019 in the Bronx Family Court case of Rachel Roy. He was ordered to pay her $341,991 and $25,000 for attorney fees in 2015.[30][29] Dash reportedly paid more than $1 million to be released

Damon Anthony Dash (born May 3, 1971) is an American entrepreneur and record executive.[4] Dash is best known as co-founder of Roc-A-Fella along with Jay-Z and Kareem Burke.[5] Early life Born in New York City, Dash swept the floors of a local barbershop and sold newspapers in order to buy sneakers and shirts as a teenager. Dash "learned to hustle", in his own words, from the example of his mother, who died of an asthma attack when he was 15.[6] The same year, Dash was diagnosed with type 1 diabetes.[7] "Before I was diagnosed... I went about a month or two just going to the bathroom non-stop and losing weight," Dash recalled. "Magic Johnson had just been diagnosed with AIDS, so that's what I thought I had. I was scared to even go to the doctor. I thought I was going to die."[7] Career Dash served as Jay-Z's manager and business partner at Roc-A-Fella Records, and in 1999, he organized a tour for Jay-Z which made $19 million.[8] Their relationship soured as a result of two subsequent events. The first was when Roc-A-Fella Records was purchased by Def Jam Recordings (which had previously only owned half of the company) in 2004, after which Jay-Z agreed to take a job as Def Jam's president. Then, in late 2005, Jay-Z bought Dash out of his stake in Rocawear.[9] In April 2014, it was announced that Dash is involved with Blind Debit, a fingerprint payment application being developed by Dez White.[10] Dash founded DD172, a media collective which encompasses: America Nu, a magazine; VNGRD79, a web design firm; BluRoc Records, a record label division.[11] It also includes an art gallery.[12] Personal life Dash met R&B singer Aaliyah in New York City in the summer of 2000 through his accountant,[13][14] and dated her until her death on August 25, 2001, in a plane crash in The Bahamas.[15] Though they were not formally engaged, in interviews given after Aaliyah's death, Dash stated that the couple had planned to marry.[16] In 2005, Dash married fashion designer Rachel Roy, whom he had dated prior to his relationship with Aaliyah. They met when she was working as an intern at Rocawear. Together they have two daughters, Ava Dash (born December 7, 1999) and Tallulah Dash (born May 14, 2008).[17] Following their divorce in 2009, they had a bitter custody battle.[18] Dash has a son, Dame "Boogie" Dash (born November 28, 1991), with former girlfriend Linda Williams.[17] Boogie stars in the reality television show Growing Up Hip Hop.[19] He also has another son, Lucky, born in 2004 with Cindy Morales.[17][20] Dash and his fiancée Raquel Horn have a son, Dusko Dash, born on November 14, 2020.[21] Legal issues In 2012, rapper Curren$y sued Dash for $1.5 million for releasing his music without permission.[22] Dash's attorney released a statement that Dash released the music on fair grounds.[23] In 2014, Dash was ordered to pay Linda Williams, the mother of his son Boogie, $50,000 for causing her to be prosecuted on harassment charges in 2009.[24] In April 2015, Dash's ex-wife, Rachel Roy, accused him of domestic abuse and filed for a restraining order.[18] Roy was awarded sole custody of their daughters. The court granted Roy and her daughters with a three-year restraining order against Dash.[25] Days later, Dash filed a $2.5 million claim against Roy in asserted damage for allegedly mishandling their joint fashion business, Royale Etenia.[26] In 2018, Dash settled a suit he filed against director Lee Daniels requesting $5 million to recoup a $2 million investment with interest.[27] Lee had received financial support from Dash early in his career, and reportedly failed to repay him despite his subsequent success.[28] In November 2019, Dash was arrested for failing to pay more than $400,000 in child support. Dash was in New York City for an unrelated Federal Court appearance when he was arrested for two warrants. The first warrant was issued in April 2015 in the Supreme Court in New York County case of Cindy Morales; he owed $62,553 since 2012.[29] The second warrant was issued in March 2019 in the Bronx Family Court case of Rachel Roy. He was ordered to pay her $341,991 and $25,000 for attorney fees in 2015.[30][29] Dash reportedly paid more than $1 million to be released

Damon Anthony Dash (born May 3, 1971) is an American entrepreneur and record executive.[4] Dash is best known as co-founder of Roc-A-Fella along with Jay-Z and Kareem Burke.[5] Early life Born in New York City, Dash swept the floors of a local barbershop and sold newspapers in order to buy sneakers and shirts as a teenager. Dash "learned to hustle", in his own words, from the example of his mother, who died of an asthma attack when he was 15.[6] The same year, Dash was diagnosed with type 1 diabetes.[7] "Before I was diagnosed... I went about a month or two just going to the bathroom non-stop and losing weight," Dash recalled. "Magic Johnson had just been diagnosed with AIDS, so that's what I thought I had. I was scared to even go to the doctor. I thought I was going to die."[7] Career Dash served as Jay-Z's manager and business partner at Roc-A-Fella Records, and in 1999, he organized a tour for Jay-Z which made $19 million.[8] Their relationship soured as a result of two subsequent events. The first was when Roc-A-Fella Records was purchased by Def Jam Recordings (which had previously only owned half of the company) in 2004, after which Jay-Z agreed to take a job as Def Jam's president. Then, in late 2005, Jay-Z bought Dash out of his stake in Rocawear.[9] In April 2014, it was announced that Dash is involved with Blind Debit, a fingerprint payment application being developed by Dez White.[10] Dash founded DD172, a media collective which encompasses: America Nu, a magazine; VNGRD79, a web design firm; BluRoc Records, a record label division.[11] It also includes an art gallery.[12] Personal life Dash met R&B singer Aaliyah in New York City in the summer of 2000 through his accountant,[13][14] and dated her until her death on August 25, 2001, in a plane crash in The Bahamas.[15] Though they were not formally engaged, in interviews given after Aaliyah's death, Dash stated that the couple had planned to marry.[16] In 2005, Dash married fashion designer Rachel Roy, whom he had dated prior to his relationship with Aaliyah. They met when she was working as an intern at Rocawear. Together they have two daughters, Ava Dash (born December 7, 1999) and Tallulah Dash (born May 14, 2008).[17] Following their divorce in 2009, they had a bitter custody battle.[18] Dash has a son, Dame "Boogie" Dash (born November 28, 1991), with former girlfriend Linda Williams.[17] Boogie stars in the reality television show Growing Up Hip Hop.[19] He also has another son, Lucky, born in 2004 with Cindy Morales.[17][20] Dash and his fiancée Raquel Horn have a son, Dusko Dash, born on November 14, 2020.[21] Legal issues In 2012, rapper Curren$y sued Dash for $1.5 million for releasing his music without permission.[22] Dash's attorney released a statement that Dash released the music on fair grounds.[23] In 2014, Dash was ordered to pay Linda Williams, the mother of his son Boogie, $50,000 for causing her to be prosecuted on harassment charges in 2009.[24] In April 2015, Dash's ex-wife, Rachel Roy, accused him of domestic abuse and filed for a restraining order.[18] Roy was awarded sole custody of their daughters. The court granted Roy and her daughters with a three-year restraining order against Dash.[25] Days later, Dash filed a $2.5 million claim against Roy in asserted damage for allegedly mishandling their joint fashion business, Royale Etenia.[26] In 2018, Dash settled a suit he filed against director Lee Daniels requesting $5 million to recoup a $2 million investment with interest.[27] Lee had received financial support from Dash early in his career, and reportedly failed to repay him despite his subsequent success.[28] In November 2019, Dash was arrested for failing to pay more than $400,000 in child support. Dash was in New York City for an unrelated Federal Court appearance when he was arrested for two warrants. The first warrant was issued in April 2015 in the Supreme Court in New York County case of Cindy Morales; he owed $62,553 since 2012.[29] The second warrant was issued in March 2019 in the Bronx Family Court case of Rachel Roy. He was ordered to pay her $341,991 and $25,000 for attorney fees in 2015.[30][29] Dash reportedly paid more than $1 million to be released.

Damon Anthony Dash (born May 3, 1971) is an American entrepreneur and record executive.[4] Dash is best known as co-founder of Roc-A-Fella along with Jay-Z and Kareem Burke.[5] Early life Born in New York City, Dash swept the floors of a local barbershop and sold newspapers in order to buy sneakers and shirts as a teenager. Dash "learned to hustle", in his own words, from the example of his mother, who died of an asthma attack when he was 15.[6] The same year, Dash was diagnosed with type 1 diabetes.[7] "Before I was diagnosed... I went about a month or two just going to the bathroom non-stop and losing weight," Dash recalled. "Magic Johnson had just been diagnosed with AIDS, so that's what I thought I had. I was scared to even go to the doctor. I thought I was going to die."[7] Career Dash served as Jay-Z's manager and business partner at Roc-A-Fella Records, and in 1999, he organized a tour for Jay-Z which made $19 million.[8] Their relationship soured as a result of two subsequent events. The first was when Roc-A-Fella Records was purchased by Def Jam Recordings (which had previously only owned half of the company) in 2004, after which Jay-Z agreed to take a job as Def Jam's president. Then, in late 2005, Jay-Z bought Dash out of his stake in Rocawear.[9] In April 2014, it was announced that Dash is involved with Blind Debit, a fingerprint payment application being developed by Dez White.[10] Dash founded DD172, a media collective which encompasses: America Nu, a magazine; VNGRD79, a web design firm; BluRoc Records, a record label division.[11] It also includes an art gallery.[12] Personal life Dash met R&B singer Aaliyah in New York City in the summer of 2000 through his accountant,[13][14] and dated her until her death on August 25, 2001, in a plane crash in The Bahamas.[15] Though they were not formally engaged, in interviews given after Aaliyah's death, Dash stated that the couple had planned to marry.[16] In 2005, Dash married fashion designer Rachel Roy, whom he had dated prior to his relationship with Aaliyah. They met when she was working as an intern at Rocawear. Together they have two daughters, Ava Dash (born December 7, 1999) and Tallulah Dash (born May 14, 2008).[17] Following their divorce in 2009, they had a bitter custody battle.[18] Dash has a son, Dame "Boogie" Dash (born November 28, 1991), with former girlfriend Linda Williams.[17] Boogie stars in the reality television show Growing Up Hip Hop.[19] He also has another son, Lucky, born in 2004 with Cindy Morales.[17][20] Dash and his fiancée Raquel Horn have a son, Dusko Dash, born on November 14, 2020.[21] Legal issues In 2012, rapper Curren$y sued Dash for $1.5 million for releasing his music without permission.[22] Dash's attorney released a statement that Dash released the music on fair grounds.[23] In 2014, Dash was ordered to pay Linda Williams, the mother of his son Boogie, $50,000 for causing her to be prosecuted on harassment charges in 2009.[24] In April 2015, Dash's ex-wife, Rachel Roy, accused him of domestic abuse and filed for a restraining order.[18] Roy was awarded sole custody of their daughters. The court granted Roy and her daughters with a three-year restraining order against Dash.[25] Days later, Dash filed a $2.5 million claim against Roy in asserted damage for allegedly mishandling their joint fashion business, Royale Etenia.[26] In 2018, Dash settled a suit he filed against director Lee Daniels requesting $5 million to recoup a $2 million investment with interest.[27] Lee had received financial support from Dash early in his career, and reportedly failed to repay him despite his subsequent success.[28] In November 2019, Dash was arrested for failing to pay more than $400,000 in child support. Dash was in New York City for an unrelated Federal Court appearance when he was arrested for two warrants. The first warrant was issued in April 2015 in the Supreme Court in New York County case of Cindy Morales; he owed $62,553 since 2012.[29] The second warrant was issued in March 2019 in the Bronx Family Court case of Rachel Roy. He was ordered to pay her $341,991 and $25,000 for attorney fees in 2015.[30][29] Dash reportedly paid more than $1 million to be released

Damon Anthony Dash (born May 3, 1971) is an American entrepreneur and record executive.[4] Dash is best known as co-founder of Roc-A-Fella along with Jay-Z and Kareem Burke.[5] Early life Born in New York City, Dash swept the floors of a local barbershop and sold newspapers in order to buy sneakers and shirts as a teenager. Dash "learned to hustle", in his own words, from the example of his mother, who died of an asthma attack when he was 15.[6] The same year, Dash was diagnosed with type 1 diabetes.[7] "Before I was diagnosed... I went about a month or two just going to the bathroom non-stop and losing weight," Dash recalled. "Magic Johnson had just been diagnosed with AIDS, so that's what I thought I had. I was scared to even go to the doctor. I thought I was going to die."[7] Career Dash served as Jay-Z's manager and business partner at Roc-A-Fella Records, and in 1999, he organized a tour for Jay-Z which made $19 million.[8] Their relationship soured as a result of two subsequent events. The first was when Roc-A-Fella Records was purchased by Def Jam Recordings (which had previously only owned half of the company) in 2004, after which Jay-Z agreed to take a job as Def Jam's president. Then, in late 2005, Jay-Z bought Dash out of his stake in Rocawear.[9] In April 2014, it was announced that Dash is involved with Blind Debit, a fingerprint payment application being developed by Dez White.[10] Dash founded DD172, a media collective which encompasses: America Nu, a magazine; VNGRD79, a web design firm; BluRoc Records, a record label division.[11] It also includes an art gallery.[12] Personal life Dash met R&B singer Aaliyah in New York City in the summer of 2000 through his accountant,[13][14] and dated her until her death on August 25, 2001, in a plane crash in The Bahamas.[15] Though they were not formally engaged, in interviews given after Aaliyah's death, Dash stated that the couple had planned to marry.[16] In 2005, Dash married fashion designer Rachel Roy, whom he had dated prior to his relationship with Aaliyah. They met when she was working as an intern at Rocawear. Together they have two daughters, Ava Dash (born December 7, 1999) and Tallulah Dash (born May 14, 2008).[17] Following their divorce in 2009, they had a bitter custody battle.[18] Dash has a son, Dame "Boogie" Dash (born November 28, 1991), with former girlfriend Linda Williams.[17] Boogie stars in the reality television show Growing Up Hip Hop.[19] He also has another son, Lucky, born in 2004 with Cindy Morales.[17][20] Dash and his fiancée Raquel Horn have a son, Dusko Dash, born on November 14, 2020.[21] Legal issues In 2012, rapper Curren$y sued Dash for $1.5 million for releasing his music without permission.[22] Dash's attorney released a statement that Dash released the music on fair grounds.[23] In 2014, Dash was ordered to pay Linda Williams, the mother of his son Boogie, $50,000 for causing her to be prosecuted on harassment charges in 2009.[24] In April 2015, Dash's ex-wife, Rachel Roy, accused him of domestic abuse and filed for a restraining order.[18] Roy was awarded sole custody of their daughters. The court granted Roy and her daughters with a three-year restraining order against Dash.[25] Days later, Dash filed a $2.5 million claim against Roy in asserted damage for allegedly mishandling their joint fashion business, Royale Etenia.[26] In 2018, Dash settled a suit he filed against director Lee Daniels requesting $5 million to recoup a $2 million investment with interest.[27] Lee had received financial support from Dash early in his career, and reportedly failed to repay him despite his subsequent success.[28] In November 2019, Dash was arrested for failing to pay more than $400,000 in child support. Dash was in New York City for an unrelated Federal Court appearance when he was arrested for two warrants. The first warrant was issued in April 2015 in the Supreme Court in New York County case of Cindy Morales; he owed $62,553 since 2012.[29] The second warrant was issued in March 2019 in the Bronx Family Court case of Rachel Roy. He was ordered to pay her $341,991 and $25,000 for attorney fees in 2015.[30][29] Dash reportedly paid more than $1 million to be released