- Elgar original reference
Edited by Philip Arestis and Malcolm Sawyer
1 Money: an alternative story Éric Tymoigne and L. Randall Wray Overview To be sure, we will never ‘know’ the origins of money. First, the origins are lost ‘in the mists of time’ – almost certainly in pre-historic time (Keynes, 1930, p. 13). It has long been speculated that money pre-dates writing because the earliest examples of writing appear to be records of monetary debts – hence we are not likely to uncover written records of money’s ‘discovery’. Further, it is not clear what we want to identify as money. Money is social in nature and it consists of complex social practices that include power and class relationships, socially constructed meaning, and abstract representations of social value (Zelizer, 1989). There is probably no single source for the institution of modern capitalist economies that we call ‘money’. When we attempt to discover the origins of money, we are identifying institutionalized behaviours that appear similar to those today that we wish to identify as ‘money’. This identiﬁcation, itself, requires an underlying economic theory. Most economists focus on market exchanges, hypothesizing that money originated as a cost-reducing innovation to replace barter, and highlighting the medium of exchange and store of value functions of money. While this is consistent with the neoclassical preoccupation with market exchange and the search for a unique equilibrium price vector, it is not so obvious that it can be adopted within heterodox analysis. If money did not originate as a cost-minimizing alternative to barter, what were its origins? It is...
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