I think that it all goes back to
Keynes, John Maynard Keynes, in his
Treatise On Money which was his famous
book before The General Theory, the one
that most people know about. And he just
said, "look the kind of monetary system I
am describing, applies to all monetary
systems for the past four thousand years
at least" and so I just sort of took that,
ok we don't know what happened before
that. Maybe the story of Robinson Crusoe
and Friday and they were bartering fish for
coconuts and it was very inconvenient so
they decided to use seashells and
gradually over time it evolved to a
gold commodity money. Maybe that applies
somewhere, to some universe, to some
distant time, very distant time. It does
not apply to any monetary economy for
the past four thousand years.
This is what Keynes was saying it so I...
So you're saying that the story of where money came from isn't
even wrong? That's right the story of where money came from really is not applicable
to any monetary system that is modern in
Keynes's sense the past 4,000 years. Now I
don't even need to make that case of
course. I think that Keynes was
completely right and in my own
books I have looked at all the evidence
that we have going back to Mesopotamia
for example and I'll tell you what
authorities played a role all the way
back.
It sure looks like the monetary system
was not invented by Robinson Crusoe and
Friday, instead it was invented by the
authorities. In the beginning the temple
authorities, the palace authorities and
then we, you know, evolve the king
and finally democratic government. All
the way back,
always some form of state authority
has always been involved in creating,
supporting, protecting, managing our
monetary system... And the
reason for this is so they can take a
piece of the action right? Well yes, I
mean... So could I give you a... thumbnail characterisation and you
tell me if this makes sense?
Sure... Whether it was a kingdom or a theocracy or a tribe or whatever it
may be the community as a whole and
whether, whether it was small-D democratic or
not, the community as a whole had certain things in common
there's a commons of some sort and that
commons had to be supported by all the
people who are members of the community so they had to figure out a way that
when people were interacting with each
other in ways that could be called
economic that a little bit of that
action could be skimmed off the top to
pay for the commons and thus was born
money. Does that make sense? Yes I, my
shorthand way of stating it is that the
monetary system was created and
developed and evolved to move resources
to the public purpose. Now it's pretty
hard to say that you know that the crown
operated in the public purpose but
clearly that is what we have evolved to
in democratic states is to serve the
public purpose that, from inception,
that is why we have a monetary system.
Now the monetary system also serves the
private interest too of course, and
there's no reason why we have to say it must be one or it must be the other
one or that they must always be in
conflict. Of course there are, there's a
great area of overlap between the public
purpose and the private purpose and what
we need the public purpose to accomplish so the private purpose can accomplish
what it wants to accomplish.
