Modern monetary systems

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Monograph

Identifikator:: 1753210836

URN:: urn:nbn:de:zbw-retromon-128414

Document type:: Monograph

Author:: Nogaro, Bertrand http://d-nb.info/gnd/117039713

Title:: Modern monetary systems

Place of publication:: London

Publisher:: King

Year of publication:: 1927

Scope:: XII, 236 S.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

THE NOTION OF MONEY 16§ Finally, the important point for the recipient of a certain sum of money, or in other words of a certain number of units of account, is not that he is entitled to a certain quantity of precious metal for which he would have no direct use; what does matter to him is the assurance that in the event he will obtain in exchange for the number of units of account which stand to his credit that quantity of commodities to which he is entitled by that sum of money considered in the abstract. Thus in proportion as the notion of money develops it becomes gradually more and more detached from that of a given quantity of a given commodity and becomes a notion of a unit of account with a given purchasing power. Not until a doubt arises as to the permanence of this purchasing power does the idea of a currency commodity reappear. We do not believe that it is psychologically correct to say that before the war the public accepted bank-notes because it knew that they were convertible into coin. Only persons with technical knowledge and bankers cared about this; the man in the street only needed to be convinced that when he parted with his note it would bring him, not a certain amount of gold, but that quantity of goods which he knew he could obtain in exchange. A preference for gold only made itself felt owing to doubts as to the stability of the purchasing power of paper and not really because gold is a commodity, but, more exactly, because it is a universal currency which is everywhere accepted, pro- duced in limited quantities and therefore certain to main- tain its function as an instrument of exchange with a comparatively stable purchasing power. It is doubtless true that its quality as a commodity, i.c., as a material object capable of other uses and therefore able to retain an exchange value independent of its monetary uses, may greatly strengthen a currency. In the first place, through being commonly used by a large number of countries, it may more easily become an international currency. Further it cannot be produced arbitrarily and in unlimited quantities. But, in our view, the idea of a commodity is not necessarily inherent in that of money and we believe that money is more accurately defined as

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