The Monetary System

CHAPTER 8 What is the Conceptual Essence of Contractual Money, Constraints and Implications?

“The realistic alternative to an impracticable general micro-economy is to directly apprehend aggregated dimensions. Chosen because of the lack of other possible approach, the alternative raises a lot of problems. Most often considering directly aggregated dimensions is a cause for uncertainty or mistakes one should appraise the extent.”¹

— Edmond Malinvaud (translation from French)

In analysing what constitutes money, how it is used and characterized, and how it is currently managed on an international scale, we have raised issues relating to the concept of money. Among these varied issues, we first have to look at where new money stands and fits with a non-disrupted environment. Our conclusion as witness is that money became essentially of contractual nature with the deregulation that started with the Reagan era. Money is exchangeable receivables accepted by economic agents and regulated. M5, M6 and derivatives are its fairest real representation.

THE INTRINSIC NEW CONCEPTUAL VIEWS ON MONEY

Once we have treated the practical questions, how should money be viewed today from a philosophical point of view when considered as contractual and escaping strict traditional unity?

1. The contractual approach is not antagonistic to regulation, or to the development of markets.

      Regulation guarantees, and marketplaces are guaranteed by, general laws and jurisprudence for the contracts that ...