Money as an AgreementIn comparison with orthodox monetary economics, there are pragmatist, semiotic, linguistic and social considerations that offer a broader and richer inter-disciplinary scope of analysis for a sound unfolding of money’s ontology, which in turn brings about a new working definition of money: from an object in the ninetieth century to a tool in the twentieth one, money is now ontologically thought of as a relational ens, namely the inter- subjective agreement in the adoption of a peculiar means of payment for processing economic activity in a definite social system.

How did we get to money as an inter-subjective agreement fostered by inter-personal relations?

At the ontological level, money as debt in general and modern bank money in particular are better thought of as signs of a performative practice of discourse, from which the concept germinated. Thus, the constitutive element of money is first of all “a particularly interpretative and textual practice. Money, credit, and capital are, quite literally, systems of writing.” (De Goede, 2005) For instance,

cuneiform script on clay-boards in Ancient Babylon, alphabetical script on paper ledgers or still languages and syntaxes for software coding on a hard drive are all instances of the same phenomenon: the unfolding of money throughout human historical evolution by means of media of communication.

In this view at crossroads among philosophy of language and monetary economics, money is seen as a social relation, namley the social relation of credit. Indeed, Costas Lapvitsas claims that modern bank money “is the glue that holds commodity owners together, the social medium through which they express their volition to each other and to the market as a whole”(Lapvitsas, 2003). Hence, money was institutionalized as the result of discursive social interactions among different agents belonging to the same community in the broader sense of the term. Still today, such economic agents perform – in concrete practices – the semiotic process of accounting that unfolded since antiquity through the mastering of the technology of script.

Thereby, the ontology of money does not reside neither in the features of the objects that symbolize it (shells, silver bars, metal coins, paper banknotes, plastic credit cards, etc.) nor into those monetary functions it can be implemented for (unit of account, means of exchange, standard of deferred payment, store of value, standard of value, etc.). Instead, the emergence of money is the result of an abstract formulation of value measurement, which is immaterial, conventional and inter-subjectively shared as semiotic processing and natural language are with regards to discourse per se. At the deepest level of analysis, money is thus not materially consistent. Indeed,

currency architect Bernard Lietaer accordingly argues for a definition of money taking into account such reality: “money is an agreement, within a community to use something as a means of payment.” (Lietaer, 2001)

Only by considering money in such a new way, there is a reasonable hope to operate an organizational monetary shift, which will convey modern society from the old social landscape typical of a mature Industrial Age to the new one peculiar of an Information Age.

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  • Amydaykahn

    The late John Von Neumann wrote, “The quantum of economics is an exchange (of values)”. In a system of
    only ten different elements available for exchange, the possible pairs are 45 in number, as opposed to 10
    using an agreed upon a “master commodity” or money. With one hundred elements, the possible pairs rise
    to 5000 in number, as opposed to 100 where each has a relation to “money”. As barter becomes progressively
    impossible under increasing complexity, “money” or some master commodity forcibly emerges, IMHO.

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