Top: Getting Money Right

Money is Social

Stanley Dundee

2017-09-15 v. 1

The notion that money is a claim on society appears to be due to Georg Simmel, a German philosophor around the turn of the 20th century. In 1913, Albert Mitchell Innes proposed that

Money, then, is credit and nothing but credit. A's money is B's debt to hime, and when B pays his debt, A's money disappears. This is the whole theory of money.
Innes refined these ideas in 1914,
...a sale and a purchase is the exchange of a commodity for a credit. From this main theory springs the sub-theory that the value of credit of money does not depend on the value of any metal or metals, but on the right which the creditor acquires to payment, that is to say, satisfaction for the credit, and on the obligation of the debtor to pay his debt, and conversely on the right of the debtor to release himself from his debt by the tender of an equivalent debt owed by the creditor, and the obligation of the creditor to accept this tender in satisfaction of his credit.
Per Geoffrey Ingham,
To say that money is credit is to say that money is constituted by a social relation. Money, even in its virtual form as a a book entry, only becomes an exchangable commodity after is quality of moneyness has been constituted by the social relations between the issuers and users of money.

Of course, a credit is a claim, and the issuer of money stands for the society that issues it. Hence the attractive simplicity of money as a claim on the resources of society.