Keynes on Mitchell-Innes

25 Apr, 2019 at 20:55 | Posted in Economics | 2 Comments

maxresdefaultMr. Innes’s next point is that the idea, that “in modern days a money-saving device has been introduced called credit, and that, before this device was known, all purchases were paid for in cash, in other words in coins,” is simply a popular fallacy. The use of credit, he thinks, is far older than that of cash. The numerous instances, he adduces in support of this, from very remote times are certainly interesting …

Mr. Innes’s development of this thesis is of unquestionable interest. It is difficult to check his assertions or to be certain that they do not contain some element of exaggeration. But the main historical conclusions which he seeks to drive home have, I think, much foundation, and have often been unduly neglected by writers excessively influenced by the “sound currency” dogmas of the mid-nineteenth century. Not only has it been held that only intrinsic-value money is “sound,” but an appeal to the history of currency has often been supposed to show that intrinsic-value money is the ancient and primitive ideal, from which only the wicked have fallen away. Mr. Innes has gone some way towards showing that such a history is quite mythical.

John Maynard Keynes


  1. It seems remarkable that there should be so much resistance to the realization that monetary regimes change always if irregularly, under intense pressure from strategic subversion and reformist impulses. Coins, bills of exchange, palatial credit, tally sticks, bank deposits, bank checks, merchant scrip — the only constant is an evolutionary chaos of innovation and degeneration. I am not sure what the chartalists and neoclassicals seek in an ancient origin story other than a useful myth. Money is being re-invented every day; it’s origin is always now.

    • Seems like a contract, what constitutes the underwriting in semantics, how time and space effect it due to expectations is the uncertainty some seem difficult to comprehend.

      The search via anthropology is to support or refute theories over the time line involved e.g. cherry picking or ex ante preferences with ideological overtones.

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