Finance: Currency and Money Essay example

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‘The market makes its money’, thought Hicks,1 and similar messages have been delivered by many other thinkers on money.2 However, while students of money have mostly been concerned with who could or should produce it, the market or the state, few have questioned whether the money itself should be single or not.
Apparently it has been taken for granted that a single market and a single money should coincide. Nevertheless, contrary to the modern assumption that one single currency should operate in one country, the history of money has been full of plurality until recent times, as we will argue in this issue. It is no exaggeration to say that the majority of human beings through most of history dealt with concurrent currencies.
It is important to recognise that, in most if not in all cases, the coexistence of monies was not incidental but functional, since they worked in a complementary relationship.
That is, one money could do what another money could not, and vice versa. In other words, an assortment of monies could dowhat any single money could not, and supply what the market required. In the following articles we will show how this worked.
The assumption of mono-money has not always been made without any reservations. Hayek insisted that monies could work concurrently and should be made to do so, and his argument was supported by Klein.3 However, Hayek’s
1 The articles in this special issue have been produced through discussions in three workshops and a conference session under the title ‘Complementary Relationship among Monies in History’ held at
New York University on  December , at the University of Tokyo on – April , at the University of Helsinki on  August  (th International Economic History Conference), and at Ecole Normale Supérieure, Paris, on  December . We wish to thank all participants of the four meetings for making numerous suggestions.
2 J. R. Hicks, A Market Theory of Money (Oxford, ). Hicks was so flexible that he admitted the possibility that liabilities were expressed through more than one sort of money, even though it appeared to be complicated (p. ). Marx thought that the money was not produced by any observation or agreement but was formed by instinct through the process of exchange. K. Marx, Zur Kritik der politischen
Ökonomie (Berlin, ), S..
3 F. A. Hayek Denationalisation of Money (London, ); B. Klein, ‘The competitive supply of money’,
Journal of Money, Credit and Banking, . ().
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Financial History Review . (), pp. –. © European Association for Banking and Financial History e.V. 
Printed in the United Kingdom doi:./S insistence was conceptual, following his principle that money should be denationalised.
He almost completely ignored the behaviours of concurrent monies that had actually existed in history. Meanwhile, Cohen and Helleiner recently made clear that a single currency within a territory was not a natural state for money, but an artificial product of modern history. However, what caused a variety of monies to exist concurrently in markets was not within the scope of…