social currencies

An investigation of the social and credit theory of money, focussing on the contemporary situation of monetary sovereignty

Chikako Nakayama* and Manabu Kuwata**

*Tokyo University of Foreign Studies, 183-8534, 3-11-1, Asahicho Fuchu-shi, Tokyo, Japan. nakac@tufs.ac.jp

** Fukuyama City University, 721-0964, 2-19-1, Minato Machi, Fukuyama City, Hiroshima Prefecture,Japan. m-kuwata@fcu.ac.jp

Abstract

This paper explores the fundamental importance of sociality to monetary sovereignty, investigating the apparent contrast between the state and the market in theories of money. Sociality deserves attention given the recent increase since the 1990s of denationalised, regional and, more recently, crypto currencies, which are different from legal tender. First, we examine the classification of metalism and chartalism, that is, the commodity theory of money on one hand and the chartal theory of money on the other (Section 2). The former has been dominant in the history of economic thought, focussing on catallactics, or the function of money as a medium of exchange, while the latter lays more importance on the function of money as a means of payment and relies on literature in history and anthropology. We then concentrate on the meaning of the institution of payment and debt, with which a person can participate in the society to which he/she belongs (Section 3). People’s belief in the perpetual validity of this institution is indispensable for monetary sovereignty. Further, we investigate the idea of the social credit given a hundred years ago, when the trust in this institution and the state itself was severely lacking, as an important application of the sociality of money. In conclusion, we show that sociality among people, embodied in the existence of monies and currencies, cannot be reduced to the market nor to the state.

Keywords

chartalism, monetary sovereignty, means of payment, crypto currency, social credit

Article Nakayama and Kuwata

To cite this article: Nakayama, C. and Kuwata, M. (2020) ‘An investigation of the social and credit theory of money, focussing on the contemporary situation of monetary sovereignty’ International Journal of Community Currency Research Volume 24 (Summer 2020) 89-100; http://www.ijccr.net; ISSN 1325-9547; DOI http://dx.doi.org/10.15133/j.ijccr.2020.014

Tristan Dissaux

Laboratoire Triangle, UMR 5206, Université Lyon 2, France, Email: tristan.dissaux@gmail.com

For developing countries, financing needs remain important, especially to meet the Sustainable Development Goals. This paper deals with the problematic of financing for development (FfD), by focusing on what we think to be its major blind spot: money. If development is far from being only about money, its financing does have monetary aspects, which are most often omitted. We first emphasise the current prevailing FfD paradigm and show that it stands on a particular theoretical corpus. In particular, it adopts a restrictive understanding of money, carrying important political, economic and social implications. Against what can be described as a non-monetary approach to financing for development, we consider the nature and origins of money. In this light, the current FfD paradigm appears as inconsistent, while tools such as social and complementary currencies can be relevant. We here explore their participation to financing and their potentials regarding this issue.

Article Dissaux

To cite this article: Tristan Dissaux (2018) ‘Financing for development: a monetary issue in which money has no say’ International Journal of Community Currency Research 2018 Volume 22 (Winter) 37-49 <www.ijccr.net> ISSN 1325-9547. http://dx.doi.org/10.15133/j.ijccr.2018.004