CHAPTER 3 Past and 21st-Century Money Analysis
“Monetary calculation as a method of thinking.”
“Monetary calculation is the guiding star of action under the social system of division of labour.”
— L. Von Mises
DEFINING “TODAY’S MONEY”
Beginning with the classical concept of money and its use, one may witness the brutal historical transformation of monetary coinage into its contemporary form – that of purely conceptual money that lacks any constraints previously imposed by a gold-backed monetary standard. The scope of today’s money has been extended to include financial instruments that are complementary to banknotes and that may be warranted either by tangible assets, government agencies or systemic financial institutions – the latter ultimately also backed up by the guarantees of governments and taxpayers.
Based entirely on a free market economy devoid of any banking monopoly, and not strictly imposed by law as merely coinage or bills, today’s new concept of money is highly dependent on external drivers such as free trade and telecommunications. Impacted by new market regulations and the effect of digitalized market exchanges, contemporary actors in the monetary system cannot escape the question of whether even tacit acceptance of today’s “new money” constitutes a social contract – where the ever-changing definition of money reflects its increasingly diverse functionality.
MONEY DEFINED BY ITS FUNCTIONALITY
Following an ancient Aristotelian1 analysis, money fulfils ...
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