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The Three Functions of Money: Accounts, Exchanges, and Assets

Published online by Cambridge University Press:  02 April 2024

Frank C. Spooner
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Many things have passed as money: salt in Abyssinia, tea-bricks in Asia, sugar in the West Indies, barrels of oil in Texas … and metals everywhere. The list seems endless. However, as transactions increased, wealth accumulated, and states levied taxes, such proto-moneys moved from the simple “double coincidence of wants” into more rational and complex forms. They catered for a market or hierarchy of markets. “Money,” said Carl Menger, “is not a political invention.”

Type
Research Article
Information
Diogenes , Volume 26 , Issue 101-102 , March 1978 , pp. 105 - 137
Copyright
Copyright © 1978 Fédération Internationale des Sociétés de Philosophie / International Federation of Philosophical Societies (FISP)

References

1 Carl Menger, Grundsätze der Volkswirtschaftslehre, Vienna, 1871, p. 259.

2 François-Marie Arouet de Voltaire, Essai sur les moeurs et l'esprit des nations, ed. R. Pomeau, 2 vols., Paris, 1963, I, p. 540.

3 Luigi Einaudi, "Teoria della moneta Immaginaria nel tempo da Carlomagno alla rivoluzione francese," Rivista di storia economica, I (1936).

4 Ferdinando Galiani, Della Moneta (1750), ed. Fausto Nicolini, Bari, 1915, p. 227.

5 Sir James Steuart, An Inquiry into the Principles of Political Economy, 1767, ed. A. Skinner, 2 vols., Edinburgh, 1966, II, p. 408.

6 In the following discussion, the number of illustrations cited has been severely reduced in order to conform to the limitations of space.

7 N.W. Posthumus, Inquiry into the History of Prices in Holland, 2 vols., Leiden, 1946-1964, I, LIV.

8 Fernand Braudel, La Méditerranée et le monde méditerranéen à l'époque de Philippe II, 2 vols., Paris, 1966, II, Part II, Section II; N. Papadopoli, Le Monete di Venezia, 4 vols., Bologna, 1893-1914, III, p. 7; Ugo Tucci, Le mo nete in Italia, in Storia d'Italia, V, Turin, 1973, pp. 535-579; Carlo M. Cipolla, Le avventure della lira, Milan, 1958.

9 Abot de Bazinghen, Traité des monnoies, 2 vols., 1764, II, p. 669.

10 Dickson H. Leavens, Silver Money, Bloomington, 1939, pp. 2, 18-19.

11 René Sédillot, Le Franc, Paris, 1953, pp. 167-173.

12 Richard Gascon, Grand commerce et vie urbaine au XVIe siècle: Lvon et ses marchands, 2 vols., Paris, 1971, I, pp. 240-251; Henri Lapeyre, Une Famille de Marchands: les Ruiz, Paris, 1955, p. 289; Giulio Mandich, Le Pacte de Ricorsa et le marché italien des changes au XVIIe siècle, Paris, 1953, pp. 29-44; Giuseppe Felloni, in G. Pesce and G. Felloni, Le Monete Genovesi, Genoa, 1975, pp. 201 et seq.

13 J.G. van Dillen, Bronnen tot de Geschiedenis der Wisselbanken, 2 vols., The Hague, 1925, II, pp. 949-950.

14 Frank C. Spooner, The International Economy and Monetary Movements in France, 1493-1725, Cambridge, Mass., 1972, pp. 161, 169.

15 Shigeo Horie, The International Monetary Fund, London, 1964, p. 64.

16 See below, p. 133.

17 Luca Pacioli, Summa de Arithmetica, Geometria, Proportioni et Proportio nalita, Venice, 1494.

18 Sieur de Malestroit, Mémoires sur le faict des Monnoyes, in Paradoxes inédits, ed. Luigi Einaudi, Turin, 1937, p. 105.

19 Anon., Prix des monnoyes de France et des matières d'or et d'argent depuis la déclaration du 31 mars 1640, Rouen, 1736, p. 114.

20 Abot de Bazinghen, op. cit., II, pp. 588-9; Sir Albert Feavearyear, The Pound Sterling, 2nd ed., Oxford, 1963, p. 96.

21 F.C. Spooner, op. cit., p. 109.

22 Ibid., p. 129.

23 K.M.C. Zevenboom and D.A. Wittop Koning, Nederlandse Gewichten, Leiden, 1970, p. 28.

24 F.C. Spooner, op. cit.; Sir Albert Feavearyear, op. cit.; Earl J. Hamilton, American Treasure and the Price Revolution in Spain, 1501-1650, Cambridge, Mass., 1934, p. 75; H. Enno van Gelder, De Nederlandse munten, Utrecht, 1976, pp. 69, 78.

25 F.C. Spooner, op. cit., p. 186; see also A. Justice, A General Treatise of Monies and Exchanges, London, 1707, p. 99.

26 Eli Heckscher, An Economic History of Sweden, ed. Göran Ohlin, Cam bridge, Mass., 1954, pp. 88-92, and illustration p. 150.

27 Jean Trenchant, L'Arithmétique de Ian Trenchant, Lyons, 1571, pp. 331-2.

28 In the extensive bibliography of the history of public banks, see J.G. van Dillen, History of the Principal Public Banks, The Hague, 1934; Abbot Payson Usher, The Early History of Deposit Banking in Mediterranean Europe, Cam bridge, 1944.

29 Sir John Clapham, The Bank of England, 2 vols., Cambridge University Press, 1946, esp. I, pp. 63-65; Raymond de Roover, The Origins of Discounting, Cape Town, 1956.

30 Sir John Clapham, op. cit., I, pp. 156-160.

31 Wesley C. Mitchell, A History of the Greenbacks, Chicago, 1903; Milton Friedman and Anna Schwartz, A Monetary History of the United States, 1867- 1960, Princeton, 1963.

32 Alexander Gerschenkron, Economic Backwardness in Historical Perspective, in B. Hoselitz, The Progress of Underdeveloped Countries, Chicago, 1952; Rondo Cameron, Banking in the Early Stages of Industrialization, New York, 1967.

33 Raymond de Roover, L'évolution de la Lettre de Change, Paris, 1953; and The Origins of Discounting, pp. 19-20.

34 Gino Luzzatto, Les banques publiques de Venise (XVIe, XVIIe, XVIIIe siècles), in J.G. van Dillen, History of the Principal Public Banks, p. 49.

35 Samuel Pepys, Diary, ed. H.B. Wheatley, 8 vols., London, 1949, V, p. 20; A. Smith, op. cit., II, p. 301.

36 S.W. Shelton, The Goldsmith Banker, in A.C. Littleton and B.S. Yamey, Studies in the History of Accounting, London, 1956.

37 Sir John Clapham, op. cit., II, pp. 177-181.

38 M. Friedman and A. Schwartz, op. cit., p. 9.

39 D.H. Robertson, "The Future of International Trade," Economic Journal, XLVIII (1938); Robert Triffin, The Evolution of the International Monetary System: Historical Reappraisal and Future Perspectives, Princeton, 1964, Table 2.

40 F.C. Spooner, op. cit.

41 E.W. Bovill, Caravans of the Old Sahara, London, 1933, esp. Chap. XIII; V.M. Godinho, L'économie de l'empire portugais aux XVe et XVIe siècles, Paris, 1969, esp. Part I, Chaps. 2 and 3.

42 R.H. Ridgeway, Summarized Data of Gold Production, Washington, 1929.

43 Henrich Quiring, Geschichte des Goldes, Stuttgart, 1948.

44 Statistics from the Minerals Yearbobks published by the U.S. Bureau of Mines.

45 John U. Nef, "Silver Production in Central Europe, 1450-1618", Journal of Political Economy, XLIX (1941).

46 P.J. Bakewell, Silver Mining and Society in Colonial Mexico: Zacatecas 1546-1700, Cambridge, 1971.

47 C.W. Merrill, Summarized Data of Silver Production, Washington, 1930.

48 Robert Lopez, "Back to Gold, 1252", Economic History Review, IX (1956); Andrew Watson, "Back to Gold—and Silver", Economic History Review, XX (1967).

49 Dickson H. Leavens, op. cit., p. 9.

50 Michel Chevalier, De la Baisse probable de l'or, des conséquences commer ciales et sociales qu'elle peut avoir et des mesures qu'elle provoque, Paris, 1859, Section III, Chap. II, which first appeared as an article in the Revue des Deux-Mondes (Oct./Nov. 1857); D.H. Leavens, op. cit., Chap. IV.

51 H.P. Willis, A History of the Latin Monetary Union, Chicago, 1901.

52 Gustav Cassel, Memorandum of Dissent, in League of Nations, Report of the Gold Delegation of the Financial Committee, Geneva, 1932, p. 75.

53 T. Josling and S. Harris, "Europe's Green Money," The Three Banks Review, CIX (1976).

54 E. Victor Morgan, The Study of Prices and the Value of Money, London, 1950.

55 Frank C. Spooner, Secular price movements and problems in capital ac cumulation, in Congrès et Colloques, VIII, Paris, 1965.

56 Gustav Cassel, The Theory of Social Economy, 2 vols., London, 1923, II, pp. 438-458; Byron W. Holt (ed.), The Gold Supply and Prosperity, New York, 1907, pp. 75-190.

57 Yeh-chien Wang, "The Secular Trend of Prices during the Ch'ing Period (1644-1911)", Journal of the Institute of Chinese Studies of the Chinese University of Hong Kong, V (1972); F.J. Atkinson, "Silver Prices in India," Journal of the Royal Statistical Society, LX (1897); C.N. Vakil and S.K. Muranjan, Currency and Prices in India, Calcutta, 1927, pp. 134 et seq.; Sir Compton Mackenzie, Realms of Silver, London, 1954, esp. Chaps. IV and VI; F.H.H. King, Money and Monetary Policy in China, 1845-1895, Cambridge, Mass., 1965.

58 The discussion in the following pages leaves aside the important problem of the Soviet Union, now a major gold producer.

59 Phyllis Deane and W.A. Cole, British Economic Growth,. 1688-1959, Cam bridge, 1962; E.L. Hargreaves, The National Debt, London, 1930; Albert Imlah, Economic Aspects of the Pax Britannica, Cambridge, Mass., 1958.

60 Cleona Lewis, America's Stake in International Investments, Washington, 1938.

61 S. Horie, op. cit., pp. 87-91.

62 S.A. Pandit, "The Asian Dollar and Free Gold Markets in Singapore", Finance and Development, XIII (1971); P. de Grauwe, "The Development of the Euro-currency Market," ibid., XII (1975).

63 An index based on the currencies of Australia, Austria, Belgium, Britain, Canada, Denmark, France, Italy, Japan, Netherlands, Norway, South Africa, Spain, Sweden, United States, and West Germany.

64 For this see the classic study of W.E.G. Salter, Productivity and Technical Change, 2nd ed., Cambridge, 1966.

65 Milton Friedman and Anna Schwartz, op. cit., esp. Chap. 13.

66 A.W. Phillips, "The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957", Economica, XXV (1958), and "Employment, Inflation and Growth," ibid., XXIX (1962); P.A. Samuelson and R.M. Solow, "Problem of Achieving and Maintaining a Stable Price-level", American Economic Review, L (1960); K. Brunner and A.H. Meltzer (eds.), The Phillips Curve and Labor Markets, Amsterdam, 1976.