Money as a Legal Institution
In: David Fox and Wolfgang Ernst, 'Money in the Western Legal Tradition', 2015, Forthcoming
19 Pages Posted: 7 Sep 2013 Last revised: 29 Oct 2015
Date Written: September 5, 2013
This chapter summarizes the case for considering money as a legal institution. The Western liberal tradition, represented here by John Locke’s iconic account of money, describes money as an item that emerged from barter before the state existed. Considered as an historical practice, money is instead a method of representing and moving resources within a group. It is a way of entailing or fixing material value in a standard that gains currency because of the unique cash services it provides. The evidence to that end comes from coin itself, the practice of free-minting, judicial commentary, and academic theorizing. As the second half of the chapter details, the relationships that make money work are matters of governance carried out in law. Thus law defines public debt, allocates authority to create money, and determines what counts as a ‘commodity’. Comparing medieval, early American, and modern money law on money demonstrates the dramatic importance of that legal engineering.
Keywords: money, economic orthodoxy, legal institution, John Locke, fiscal value, cash premium, unit of account, free-minting, tax anticipation, bank issued money, capitalism
JEL Classification: A12, B10, B15, B19, B22, B25, B31, E4, E42, E50, H1, H4, K00, K3, N1, N10, N40, Z1
Suggested Citation: Suggested Citation