Utility, Money and Transaction Costs: Authoritarian vs Libertarian Monetary Policies

This paper shows that utilitarianism and libertarianism have a determining influence on moulding monetary theories. It compares Jeremy Bentham’s utilitarian theory with that of David Hume – a theory somehow based on the idea of usefulness – and that of Adam Smith – a libertarian theory critical of utilitarianism. Smith intended to demonstrate that, with regard to monetary issues, we could not cut free transaction costs through a hierarchy who addresses a fictional image. Conversely, Bentham and Hume formulated mechanisms to affect real variables through money issuing, arbitrating new ways of artificial incentive to action and reduction of transaction costs.