- 社会科学論集 = SHAKAIKAGAKU-RONSHU (The Social Science Review) (ISSN:05597056)
- vol.139, pp.117-129, 2013
This is a fragmental note for studying the theory of Credit Money and Cartalism. This note includes three fragments. The first fragment summarizes the theoretical understandings of the system of modern inconvertible bank notes. The second fragment describes the precedence studies in the theory of Cartalism. The third fragment introduces and considers the examination of ‘the theories of standard of money’ in “A Contribution to the Critique of Political Economy” (Marx ). How to understand the modern inconvertible bank notes is a very hot issue: It has been debated whether the notes are credit money or state paper money. The ‘inconvertible bank notes debate’ proposed a critical point of the theory of credit money that cannot explain the connection of gold money and inconvertible paper money. Traditional money-credit theory explains the credit money as convertible bank notes based on gold money, but the theory does not explain the inconvertible bank notes based on gold or any commodities consistently. The state money theory seems to explain the inconvertible bank notes successfully, but this theory has some theoretical inconsistency, too. In order to understand the modern system of money, this note summarizes the debate and picks up three issues, the concept of commodity, the interpretation of national bond as commodity, and the understanding of convertibility. The second fragment describes other doctrines explaining the inconvertible bank notes named cartalistic money, that is paper money which is not a commodity and contains no metal. The famous cartalist Birmingham school in the 19th century is criticized as ‘inflationist’ by Hawtrey  or determined as ‘the doctrine of the ideal measure of money’ by Marx. The third fragment examines the definition of ‘the doctrine of the ideal measure of money’ and another version of cartalism, ‘the theory of the nominal standard of money’. The former theory is represented by Attwood and other Birmingham school theorists, the latter theory is represented by Steuart. Their considerations imply that these ideal money theories include three conditions of the ideal money: proportion to value, invariability of value, and arbitrariness of fixing a standard. However, we cannot approach credit money theory on this theoretical level, and we still have few clues between simple commodity circulation and the level of credit theory.