An Investigation of the Social and Credit Theory of Money,Focussing on the Contemporary Situation of Monetary Sovereignty

Chikako Nakayama, Manabu Kuwata
2020
This paper explores the fundamental importance of sociality tomonetary sovereignty, investigating the apparent contrast between thestate and the market in theories of money. Sociality deservesattention given the recent increase since the 1990s of denationalised,regional and, more recently, crypto currencies, which are differentfrom legal tender. First, we examine the classification of metalismand chartalism, that is, the commodity theory of money on one hand andthe chartal theory of money on
more » ... eory of money on the other (Section 2). The former hasbeen dominant in the history of economic thought, focussing oncatallactics, or the function of money as a medium of exchange, whilethe latter lays more importance on the function of money as a means ofpayment and relies on literature in history and anthropology. We thenconcentrate on the meaning of the institution of payment and debt,with which a person can participate in the society to which he/shebelongs (Section 3). People's belief in the perpetual validity of thisinstitution is indispensable for monetary sovereignty. Further, weinvestigate the idea of the social credit given a hundred years ago,when the trust in this institution and the state itself was severelylacking, as an important application of the sociality of money. Inconclusion, we show that sociality among people, embodied in theexistence of monies and currencies, cannot be reduced to the marketnor to the state.
doi:10.15133/j.ijccr.2020.014 fatcat:kz53ry7ltnettmtbpggttx5gly