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Product SKU | 9780141988610 |
Brand | Penguin |
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Money and Government- softcover
Author: Robert Skidelsky
ISBN: 9780141988610
Publisher: Penguin
Year: 2019
Language: English
Pages: 492
Weight: 360 g
II. The Origins of Money
No one knows exactly where, how or why money started, so people are free to invent stories. The main aim of the storytellers has been to elucidate, by reference to a hypothetical past, the nature of money in their own time. two such stories have dominated the literature of money. Adam Smith's eighteenth-century story tried to explain why money consisted of gold and silver. The chartalist theory, dating from the end of the nineteenth century, tried o explain why money consisted mainly of credit. We can call these the metallist theory and the credit theory.
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III. The Value of Money
As one might suppose, the metallist and credit theories give different answers to the question of what gives money its value.
According to the metallist theory, the value of money inheres in the value of the thing of which it is composed, namely the metal. The 'essential' value of gold and silver is determined by properties intrinsic to them, such as their attractiveness, scarcity and durability. In the credit theory, money is simply a token of what is promised; its value is conferred by the degree of trust in the promise of its issuer.
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(pages 23 & 25)