Chapter 1: Money between State and Market: The Concept of Payment Technology
1. Money between state and market: the concept of payment technology 1.1 INTRODUCTION The origins of money will probably remain forever wrapped in mystery. Scores of historians, anthropologists and archaeologists have tried to solve the problem, but it is not easy to trace a phenomenon that pre-dates the invention of writing and thus any documental evidence of human thinking. But why should such ignorance be of any concern for economists? After all, we do not need to know when, why or by whom the notion of paid work was introduced in order to understand the labour market. Nor do we need to go back to the first time the budget of some ancient monarch failed to balance in order to understand the meaning of sound public finances. Where money is concerned, however, many people believe that things are not so simple. John Hicks, probably the greatest expert on monetary matters of the twentieth century, was among them: One of the chief things which monetary theory ought to explain is the evolution of money. If we can reduce the main lines of that evolution to a logical pattern, we shall not only have thrown light upon history, we shall have deepened our understanding of money, even modern money, itself.1 Hicks does not tell us why this is so. It is interesting to note, though, that the passage quoted is really a palinode. Thirty years earlier, Hicks himself, under the battle-cry of ‘let’s spread the marginalist revolution to money’, called on the...
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