The two concepts of money: implications for the analysis of optimal currency areas

“…Following Keynes, Ingham identifies the unit of account function as key to the nature of money: a commodity used in exchange is only money if it is representative of a unit of account, that is, it represents abstract value. This definition of money is historically anterior to markets, an argument supported by Heinsohn and Steiger's work 5 (see further Goodhart, 2003).…”

Section: The Meaning Of Moneymentioning

confidence: 94%

The Real (Social) Experience of Monetary Policy

Dow¹

2013

Financial Crises and the Nature of Capitalist Money

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This paper takes a socio-economic approach to considering money in relation to real experience, focusing on the real effects of monetary policy. While most of the economics literature focuses on interest-rate setting as the core tool of monetary policy, we focus here instead on signalling by the central bank as a mechanism for influencing expectations and behaviour in conditions of uncertainty. This involves addressing the social-conventional expectations among different groups (a mechanism for dealing with uncertainty) applied to their particular ways of framing the real and financial sectors. Actual credit conditions faced by borrowers in turn are the outcome of the conventional view among banks as a result of their framing and the influence of central bank signalling. These relations between central banks, banks and the non-bank public in turn normally rest on long-established relations of trust. We consider the real effects of monetary policy in circumstances where trust has broken down. *This chapter has benefited from helpful comments from

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“…This debt-based or Chartalist view 6 does not ignore history or the role of social institutions and, consequently, leads to a quite different position on the relations among property, money, and equality. This view has been traced back to Plato (Goodhart, 1998) and can be found in the work of Adam Smith, GF Knapp, John Maynard Keynes, Abba Lerner, Karl Polanyi and Hyman Minsky, among others.…”

Section: Problems With the Lockean Analysismentioning

confidence: 94%

A Chartalist Critique of John Locke's Theory of Property, Accumulation, and Money: or, is it Moral to Trade Your Nuts for Gold?

Bell

Henry

Wray

2004

Review of Social Economy

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The focus of this paper is John Locke's theoretical defense of economic inequality. It is well known that Locke identified labor as the original and just foundation of property. Succinctly, Locke's was a labor theory of property. Now, while Locke saw private property as legitimate, he proposed that the state of nature within which people interact is part of a social system that is regulated by distinct rules that limit accumulation. There is nothing in Locke's initial argument that allows for unbounded accumulation and consequent inequality. The justification for unbridled accumulation comes later, and rests squarely on Locke's treatment of money as a non-exploitive institution. For Locke, money allows unlimited accumulation while still adhering to the rules he established to govern morally correct behavior. In this paper, we challenge Locke's position by contrasting his exchange-based view of money with the debt-based or Chartalist theory of money. We demonstrate that when money is properly conceived, Locke's own moral strictures regarding property are violated, and his theoretical defense of the accumulation process is undermined.accumulation, chartalism, debt, exchange, Locke, money, privilege, property, spoilage, taxes,

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The two concepts of money: implications for the analysis of optimal currency areas

Cited by 415 publications

References 23 publications

Financial Stability, Monetary Policy, Banking Supervision, and Central Banking

Financial Stability, Monetary Policy, Banking Supervision, and Central Banking

The Real (Social) Experience of Monetary Policy

A Chartalist Critique of John Locke's Theory of Property, Accumulation, and Money: or, is it Moral to Trade Your Nuts for Gold?

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