I wonder if it would be useful to start with, say, gold as "real money",
then adulterated and lesser metals as means to raise the VELOCITY of gold,
then bank notes as ways to raise the velocity another notch, then clearing
houses, then electronics, and so on. It works for me, anyway.
Mason Gaffney
-----Original Message-----
From: Societies for the History of Economics [mailto:[log in to unmask]] On
Behalf Of Bylund, Per L.
Sent: Thursday, February 20, 2014 6:30 AM
To: [log in to unmask]
Subject: Re: [SHOE] Ahiakpor on Wicksell
I realize this is not my debate, but I'd like to make a statement for the
sake of clarity.
For whatever reason discussions on this list tend to consist of two sides
completely missing the other's point(s) simply because they talk past each
other and refuse to consider differences in definition of basic terms.
Surely we cannot discuss the history of economic thought without first
thinking about and trying to figure out what core terms mean?
This particular debate reminds me of a previous debate (in which I did take
part) discussing money and whether money lending precedes savings or vice
versa. It was then maintained by several people on this list that money is
always created as credit and then followed by savings, and not the other way
around. I'm sure this is how our present fractional reserve banking system
under a central bank seems to work, but this doesn't by any means make it a
universal (or even historic) truth about money. So I asked for a definition,
and to illustrate the problem I suggested (as a thinking exercise) the term
"money" was replaced by a specific money. I was dumb enough to exemplify
this with "gold coins," to which I only received responses that gold is (to
paraphrase a frequently cited economist) but a barbarous relic and cannot
function as money. But that in no way addressed my question.
I fear the present debate is making the same mistake. Ahiakpor has already
provided a definition for his use of the term "money," though perhaps it
wasn't expressed clearly enough. There are also a bunch of quoted
semi-definitions and statements of usage from great scholars floating
around, which makes it difficult to figure out how we are to understand the
term.
If I recall correctly, Ahiakpor has referred to some sort of commodity money
- the good that has been universally accepted as a means of exchange and
thus functions as a unit of account - as an example of his usage of the term
'money'. This is a common definition in classical economics, to which
Ahiakpor refers quite frequently. Using this definition, a check is not
money but a claim on money. It follows that a dollar bill is also not money,
but was in past times (under the gold standard) a claim to "real" money
(gold). What the dollar "is" today is beyond my understanding.
However, I do understand that quoting the Bank of England should be at best
irrelevant as a response to Ahiakpor in a discussion on pricing under a pure
credit monetary system. Unless, that is, one first makes it a discussion on
*the definition* itself. But the discussion doesn't seem to address the
definition - only the use and implications of money, by scholars quite
obviously using different definitions (perhaps several ones). As far as I
understand of this discussion, the debaters are simply not talking about the
same thing.
I cannot personally figure out what to make of the electronic and paper
currency used in contemporary economies. Is it money? Is it credit? Is it
neither? From the point of view of "classical" definitions (like the one
above) it would seem the dollar, euro, yen, or whatever should not be money.
But this only limits the possibilities and provides no real categorization.
As someone who has studied several of the Austrian scholars, I find Ludwig
von Mises's 1912 book Theorie des Geldes und der Umlaufsmittel quite
enlightening. Not only does it provide an Austrian theory of money, but it
attempts to establish a typology of the different types of monies that might
be helpful in this discussion. (I've attached an image of Mises's typology,
updated from the erroneous translation by Guido Hulsmann at Universite
Angers.) It may or may not suit the needs of the discussants here, but at
least it provides some sort of road map. In my understanding, Ahiakpor is
discussing strictly within the "money in the narrower sense" sub tree and is
probably referring to the differences between the three nodes within it. It
seems others are discussing from within the other sub tree, or "money
substitutes" (a term I think I saw Ahiakpor use).
Again, you may or may not find this useful - and you may even dismiss
Mises's typology outright - but it helps me guide my thinking about money
and monetary issues.
PLB
_____________________
Per L. Bylund, Ph.D.
Baylor University
[log in to unmask]
(573) 268-3235
-----Original Message-----
From: Societies for the History of Economics [mailto:[log in to unmask]] On
Behalf Of Wells, Julian
Sent: Thursday, February 20, 2014 7:29 AM
To: [log in to unmask]
Subject: Re: [SHOE] FW: [SHOE] Ahiakpor on Wicksell
On 20/02/2014 05:47, "James C.W. Ahiakpor" <[log in to unmask]>
wrote:
>Alfred Marshall
>". . . 'money' is . . . all those
>things which are (at any time and place) generally 'current,' without
>doubt or special inquiry"
>Irving Fisher
> ła bank note is /generally/ acceptable in exchange"
Contrast these authorities with the Bank of England:
"Our advice is to remain vigilant at all times and check all banknotes being
passed" (followed by advice about UV scanners and detector pens)
(http://www.bankofengland.co.uk/banknotes/pages/retailers/hintstips.aspx)
In contrast:
Ahiakpor:
>Money doesn't include checks; these don't pass from hand to hand
>without any special inquiry.
Wells:
They do (or did) when accompanied by a cheque card; so was cheque + card =
money?
Similarly, these days when I make an electronic payment from my bank
account, the only "special enquiry" that takes place occurs when *my bank*
decides (or its computer decides) to issue the relevant amount.
n.b. my bank's decision to issue, NOT the recipient's decision to accept.
Julian Wells
This email has been scanned for all viruses by the MessageLabs Email
Security System.
|
