================== HES POSTING ====================== 
 
The discusssion of "real" and nominal" ought to include an assessment of 
when people came to recognize the importance of "sound" money--which 
would emerge of course in a reasonably commercialized society when 
people began to use money, in particular, as a store of value.  It is 
only in the "intertemproal mode" that the issue of real and nominal 
becomes important; if you use money only as a very short-term mechanism 
for dealing with the indivisibility of physical goods, in the atemporal 
roles of unit of account and measure of (comparative) value), we can 
think of the money "clearing" each day. 
 
I have not searched on this question, but Sir Edward Coke, the great English 
jurist, had a very clear understanding of the importance of a stable value 
of money (which, with contract, he effectively identified as the "instrumen- 
talities of the marketplace" [my terminology]--the two intertemporal 
mechanism needed for organizing complex economic activity over time). 
Coke was highly critical of any action that destablilized the value 
of money, precisely because it undercut market relationships, and under- 
mined the reliability of contract. 
 
Aristotle had called money a "non-entity"--so there is a real sea-change 
conceptually from Aristotlean thinking to Cokean.  When did it occur? 
 
(To put Coke in clearer context, he may have been the first jurist to 
insist on the importance of an independent judiciary, the supremacy of 
law, and due process; he also played a major role in establishing the use 
of precedent as a controlling framework for judicial conduct--because he 
was acutely sensitive to the need for stability of expected (market) value. 
That he got to oppose James I&IV undoubtedly helped sharpen his thinking!) 
 
[Editor's note: The following was originally submitted as a followup point  
to the above message. I decided to include it here because it followed  
quickly enough to allow me to post the two as one message. -- RBE] 
 
[FC says:] 
 
Let me re-emphasize what I may have passed over too lightly-- 
"nominal" can ONLY have significance in an intertemporal, COMPARATIVE 
framework.  So for the vocabulary of real vs. nominal to emerge, there 
has to be an understanding (and use?) of money over time. 
The Greeks and Romans may have had sufficient economic complexity to 
call forth such understanding--in spite of Aristotle's declaration 
that money is a "non-entity". 
 
FC 
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