Fifteen years after the Global Financial Crisis: Recessions and Business Cycles in the History of Economic Thought

Money is agreement: beyond the chartalist reading of Adam Smith

Bee Michele , Universidade Federal de Minas Gerais-UFMG
Bruzzi Curi Luiz Felipe , Universidade Federal de Minas Gerais-UFMG

Adam Smith has been associated with the so-called 'orthodox view' of money. According to this view, in order to avoid the drawbacks of pure barter, individuals adopt a particularly suitable commodity to serve as a medium of exchange, usually a precious metal. Thinkers critical of this 'metalist' perspective, such as Georg Knapp and Alfred Mitchell Innes (as well as, later, John Maynard Keynes), have questioned this primacy of money's function as a medium of exchange, stressing that money is first and foremost a unit of account. In so doing, they consolidated a chartalist reading of Smith's view on monetary issues that, however, does not withstand a closer reading of his work. As this article intends to show, for Smith money as a measure of value emerges from the agreement on the valuation of reciprocal services in which exchange consists.

Area: Eshet Conference

Keywords: Smith, Money, Chartalism, Conjectural History

Please Login in order to download this file