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Is money a convention and/or a creature of the state? the convention of acceptability, the state, contracts, and taxes


  • David Dequech


This article begins by presenting the idea of money as a convention, first in the economics of conventions and then in post Keynesian economics, also examining whether and how one can reconcile money as a convention with Keynes's essential properties of money. The article then considers the view of money as a creature of the state, in two versions, which connect money to contracts or to taxes, respectively. Finally, it further explores the monetary foundations of a market economy, the conventional foundation of money, and the role of the state. Acknowledging that money is ultimately or fundamentally a convention requires recognizing limits to the state's ability to impose its money on the private agents. At the same time, the state is usually in a much better position than any private agent to influence the process through which the convention of acceptability of money emerges and is reproduced. A stronger proposition is that without state money there would be no stable money in a market economy. Both the fundamental conventionality of money and the essential role of the state can be thus emphasized.

Suggested Citation

  • David Dequech, 2013. "Is money a convention and/or a creature of the state? the convention of acceptability, the state, contracts, and taxes," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 36(2), pages 251-274.
  • Handle: RePEc:mes:postke:v:36:y:2013:i:2:p:251-274
    DOI: 10.2753/PKE0160-3477360204

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    Cited by:

    1. Cheah, Eng-Tuck & Fry, John, 2015. "Speculative bubbles in Bitcoin markets? An empirical investigation into the fundamental value of Bitcoin," Economics Letters, Elsevier, vol. 130(C), pages 32-36.
    2. Fry, John & Cheah, Eng-Tuck, 2016. "Negative bubbles and shocks in cryptocurrency markets," International Review of Financial Analysis, Elsevier, vol. 47(C), pages 343-352.

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