As I point out in my comments, Lord Keynes is mistaken in trying to recruit Menger to the chartalist side of the metallist vs chartalist debate. Menger always was a pure metallist:
So while Menger believed that the state might adopt metals as money, it could not legislate into existence a worthless item as money. The state could construct a system of coinage and thereby perfect an existing metallic monetary system, but not create a system based on intrinsically worthless materials.
I don't actually say that Menger was a Chartalist. I have no doubt he was fundamentally a metallist.
ReplyDeleteWhat I do in the post is draw attention to this passage:
“It is not impossible for media of exchange, serving as they do the commonweal in the most emphatic sense of the word, to be instituted also by way of legislation, like other social institutions. But this is neither the only, nor the primary mode in which money has taken its origin. This is much more to be traced in the process depicted above, notwithstanding the nature of that process would be but very incompletely explained if we were to call it ‘organic,’ or denote money as something ‘primordial,’ of ‘primaeval growth,’ and so forth. Putting aside assumptions which are historically unsound, we can only come fully to understand the origin of money by learning to view the establishment of the social procedure, with which we are dealing, as the spontaneous outcome, the unpremeditated resultant, of particular, individual efforts of the members of a society, who have little by little worked their way to a discrimination of the different degrees of saleableness in commodities.” (Menger 1892: 250).
Now you might say that Menger only means that a
medium of exchange can be instituted by government legislation after it has arisen by private market barter spot transactions. Fair enough.
But I've already made it clear that anthropology and history demonstrate that money can emerge by ways other than barter spot transactions - this in fact a major finding of anthropology that contradicts the dogmatism you ifn in someone liek Rothbard:
“[sc. Mises’s] Regression Theorem also shows that money, in any society, can only become established by a market process emerging from barter. Money cannot be established by a social contract, by government imposition, or by artificial schemes proposed by economists.” (Rothbard, M. N., 2009, The Essential von Mises, p. 61).
"you find in someone like Rothbard:"
ReplyDeleteRegards
"But I've already made it clear that anthropology and history demonstrate that money can emerge by ways other than barter spot transactions - this in fact a major finding of anthropology that contradicts the dogmatism you ou find in someone like Rothbard."
ReplyDeleteYou'll get no argument from me here.
"Now you might say that Menger only means that a
medium of exchange can be instituted by government legislation after it has arisen by private market barter spot transactions. Fair enough."
That's exactly what I'm saying.