The Money View vs. the Accounting View: The Capitol Hill Babysitting Cooperative Revisited

Abstract

We propose a new way of looking at transactions involving goods and money. Building on earlier work in which money is identified as a recordkeeping device or “memory”, we re-interpret the basic transaction — traditionally viewed as an exchange of goods and money — as a one-sided “gift” of goods that is recorded on a shared ledger. Money is no longer an object or “medium” that is exchanged. In fact, there is no recognizable concept of money in the theory we develop, yet all monetary phenomena, such as bank accounts and currency (tokens), remain intact and form the recordkeeping apparatus. This enables us to describe environments, which have hitherto been considered monetary, in terms of a pure credit economy. It also appears that this approach solves some common monetary puzzles.

Keywords: Money, Monetary system, Accounting, Tokens, Frictions

JEL Classification: E40, E42, E51, M41