Application of the Power Theory of Exchange and Money to Social Phenomena: What is money?

The Power Theory of Exchange and Money (PTEM) refines the economic neoclassical two-equation model of exchange. PTEM replaces the statistical average condition of exchange, which represents the equality of supply and demand for all transactions in the market, with a more specific equation of the equality of the generalized power of the parties in relation to their objects of exchange. The purpose of the article is to show the application of PTEM for the study of various social phenomena. Along with a brief summary of the main statements of this theory, its integration into the existing corpus of theories and ideas in economics and sociology is considered. The conclusions of power theory are then applied to consider the following topics: the objective motivation of exchange by the desire to increase power, the power nature of market equilibrium, the power nature of money, the accumulation of power through profit, the creation of money as a power act, the role of the state in the creation of money, the measure of power as a possible tool for social and political research.