Note: In chapter 2 and 3, I have used the original pagination of Innes, and excluded the new pagination of Wray
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- 4. The Social Origins of Money: The Case of Egypt1
NOTESReprinted from The Banking Law Journal, Vol. 31 (Jan.-Dec. 1914): pp. 151-68, and reproduced with the permission of the copyright holder. Only obvious errors in the original text have been corrected. The author’s style in use of punctuation, spelling and capitals has been retained. Readers are warned that it is essential to bear constantly in mind the definition of credit, as laid down in the first article. Those who are not accustomed to this literal use of the word ‘credit,’ may find it easier to substitute in their minds the word ‘debt.’ Both words have the same meaning, the one or other being used, according as the situation is being discussed from the point of view of the creditor or the debtor. That which is a credit from the point of view of the creditor is a debt from the point of view of the debtor. Modem governments, unfortunately, do not limit their issues of money to the payment of purchases. But of this later on. I do not wish to be understood as saying that the retail trade followed the standard of the coins, except to the extent that they shared the fate of the king’s livre. Owing to the abuse of the system of ‘mutations’ and the attempted monetary reforms, it is probable that the coins often suffered not only the depreciation of the king's lime, but had their own independent fluctuations. Like the livre in France, the mark was both a measure of weight and a monetary unit. But while the livre was never used for the weighing of the precious metals, the mark was the unit of weight for these metals, and this has caused German historians to confuse the two. How the same word came in many countries, though not in all, to be used for two such different purposes, we do not know. Possibly it originally only signified a unit of any kind. Another instance of the use of the same word for two different kinds of measurement is found in the word 'inch,' a measure of length, and the word 'ounce,' a measure of weight. Both these words are etymologically the same. Goschen's 'Theory of Foreign Exchanges' must be included among scientific treatises on credit. Hartley Withers's recent works, 'The Meaning of Money' and 'Money Changing' are practical rather than scientific treatises. They are indispensable to the student. Editor's note: the pages are those of the original article in The Banking Law Journal of 1913. The original page numbers are given in square brackets in this edition. Even when the coins that once were silver were most debased, they were still regarded as silver in theory, though not in practice. The views on the subject of gold were, however, rather mixed. Owing to the government policy of monopolizing the issue of money in small denominations, the amount in circulation increases largely at certain seasons of the year. 4. The Social Origins of Money: The Case of Egypt1John F. Henry HERE ARE several ways to classify theories of money. For the purpose of this argument, the most telling distinction is between ose theories that see money as a technical development, and those roposing that money is a social relationship. The former, generally following the thesis of Karl Menger (1892), promote the view that money is a thing, arising as a medium of exchange to reduce the transactions costs associated with inefficient barter arrangements. Such theories usually are associated with the 'metallists', as it is normally some precious metal that arises to serve as the medium through which market exchange takes place (Goodhart, 1998). More important, this approach assumes an underlying equality among participants in the exchange relationship. As exchange must be voluntary in order for all parties to benefit, no coercive arrangements can exist that would negate freedom of choice. Those who see money as a social relationship stress the significance of money as a unit of account in which obligations are both created and extinguished. Money, then, represents a relation between those who claim these obligations and those who must service those claims. Exchange is, at best, of secondary importance in such accounts, as markets need not exist for money to evolve: while money may indeed serve as a medium of exchange, this is not a necessary function (Ingham, 1996). Such theories necessarily connote (or at least imply) some underlying inequality, as those who claim obligations must be in a superior position to those who are obligated to the former. Otherwise, there would be no social reason to fulfil said obligations or any mechanism to enforce payment. (For elaboration of the differences in these approaches, see Bell, 2001; Smithin, 2000.) The work of A. Mitchell Innes clearly falls into the second category. While it is true that much of his analysis is undertaken within the framework of a relatively modern exchange, or commercial, economy, 79
and that he goes too far in equating the obligations of pre-civil societies with those of the present, the underlying foundation from which every main point in his argument flows rests on social obligations:
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