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The Emergence Of Money In Commodity Exchange, Or Money As Monopolist Of The Ability To Buy



    () (Department of Economics, SOAS, University of London, UK)


Money's emergence in commodity exchange remains a unresolved issue within economic theory. Current general equilibrium models, drawing on Menger, offer an explanation that rests on the economic advantages of a universally accepted means of exchange that is established through ‘social custom’. This is problematic because it does not fully explain money’s unique ability to buy, and leaves out of account the social foundations of the customary practices required for money’s emergence. An alternative explanation is given here, drawing on Marx’s theory of value but involving a thorough reworking of it. Money is shown to be the monopolist of the ability to buy. 'Social custom' plays a vital role in its emergence, but has determinants that are consistent with the social underpinnings of markets.

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  • Costas Lapavitsas, 2002. "The Emergence Of Money In Commodity Exchange, Or Money As Monopolist Of The Ability To Buy," Working Papers 126, Department of Economics, SOAS, University of London, UK.
  • Handle: RePEc:soa:wpaper:126

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    References listed on IDEAS

    1. Gerald P. O'Driscoll, Jr., 1986. "Money: Menger's Evolutionary Theory," History of Political Economy, Duke University Press, vol. 18(4), pages 601-616, Winter.
    2. Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-954, August.
    3. Jones, Robert A, 1976. "The Origin and Development of Media of Exchange," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 757-775, August.
    4. White, Lawrence H, 1984. "Competitive Payments Systems and the Unit of Account," American Economic Review, American Economic Association, vol. 74(4), pages 699-712, September.
    5. Oh, Seonghwan, 1989. "A theory of a generally acceptable medium of exchange and barter," Journal of Monetary Economics, Elsevier, vol. 23(1), pages 101-119, January.
    6. Niehans, Jurg, 1969. "Money in a Static Theory of Optimal Payment Arrangements," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(4), pages 706-726, November.
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