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or liquidity. That is, some goods are more readily tradable for desired products than others. One might more easily find sellers for a bushel of grain than for a telescope, for example, thus rendering the bushel of grain more saleable. A prime measure of salability is the amount of time required to obtain an economic price for the good in question. One's neighbor might give one a mere loaf of bread for one's telescope, because the neighbor is not an astronomer and does not value telescopes highly. But this will not satisfy any prudent seller of the telescope. To find a fitting market price for the telescope, one would need to search longer and more carefully for professional astronomers who appreciate the telescope sufficiently to fittingly compensate the owner for it.

Some goods are significantly more salable than others, especially goods which are permanent, durable, divisible, and whose smaller units are still highly valued. The precious metals, especially gold and silver, fulfill these criteria. Due to these precious metals' portability and ease of storage, it is much more advantageous to the seller of the telescope to trade it for gold and then to use the gold to purchase goods from sellers who might not themselves have desired the telescope. Gold thereby becomes a medium of exchange which, though not used in direct consumption by most of its possessors, is nonetheless desired for the sole purpose of indirectly obtaining consumption and production goods.

The emergence of a medium of exchange is a self-reinforcing process. Once an individual actor in the marketplace learns that others demand gold, he is more likely to demand gold himself in the interest of more readily facilitating trades with them. Subsequent actors are even more likely to use the same reasoning to seek to acquire gold; hence, the salability of gold increases dramatically to far outstrip the salabilities of all other commodities. Gold, then, becomes the natural, free-market choice for the best medium to facilitate complex, indirect economic transactions.

During the late 19th and early 20th centuries, despite Menger's discovery of the law of marginal utility and his explanation of the origin of money, mainstream economists did not use a marginal utility approach to account for the value of money. To them, the marginal utility approach seemed circular. To explain the value of money by claiming that an actor subjectively values each individual of unit of money was, in the minds of the mainstream

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