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

176 MODERN MONETARY SYSTEMS tary instruments of metal or paper. On the contrary, whatever the cost of production, they have been con- verted at fixed rates and to an unlimited extent into the monetary units of countries where either or both were accepted for free coinage. And even if the value of these monetary units may have been fixed by the quantity of precious metals which has been minted and so, very indirectly, by the cost of production, it should not be for- gotten that this quantitative influence has been also exercised by the “substitutes” for metal currency, or in other words by fiduciary currency and even by such banking processes as enable unused money to be reduced to a minimum and the effective circulation to be pro tanto increased. And so the value of monetary units appears to be inde- pendent of the circumstances which would have determined the value of the standard metal if the latter had been “a commodity like any other.” On the contrary, it is the value of the standard metal which is bound up under the system of free coinage with that of the monetary unit, the variations in which are measured by the average rise and fall in prices, whatever may be the instrument in which such units are embodied. Thus in each country the true measure of value, and therefore the true “standard” of values, is the national monetary unit, the abstract unit of account with which the precious metal is legally bought at a fixed rate, and not the metal itself. It is true that there is one final objection to this idea. Under any given monetary system it is customary to consider, where there are several monetary instruments, that one of them acts as a basis for the system—in the case of bimetallism both are held to serve this purpose. For instance, under a monometallist-gold 7égime gold is considered to be the standard and the other monetary instruments only have value in so far as they represent gold and are legally and in fact convertible into it. Further, gold, once it is exported, maintains its value although through being exported it has lost its character of legal tender currency. The standard metal is therefore

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