When all prices of all goods are expressed in terms of the same unit, that is considered the unit of account.
- used as a metric to measure interpersonal value
- rewards producers for the value they create for others
- signifies to consumers how much they need to pay to obtain a desired good
Facilitation of complexity
Complex economic calculations are not possible without a single unit of account.
These calculations allow for:
- specialization into complex tasks
- capital accumulation
- large markets
market economies depend on prices and their accuracy, their signal of scarcity of a given good. Easy money trap obscures this data by messing with supply.
The Hardness of money determines the quality of information it can facilitate
Specialization and quality of goods / society
Specializing in capital goods/investments -> produce final consumer goods after longer intervals -> yields higher-quality, more complex goods. Consider fishing with bare hands vs using expensive and long-ranging fishing boats that take years and large sums to build and maintain.
Sound money allows for Specialization + Long Views + Investment + Quality Information.