Telematic currency and market strategy (mtemuk.pdf). - Centre d ...

While at the beginning anybody with sufficient authority and riches could mint his own coins, at a later date
this function became an exclusive monopoly of official bodies.
It is easy to understand that when the use of metallic money becomes general, one of the basic characters of
the primitive money instruments is lost: documentation.
In every mercantile operation the only function of metallic money is to be a paying means, that is an
instrument which allows a good transaction to be made. By delivering some coins, any situation of market
exchange can be considered as paid and settled.
6. From metallic money to paper money.
Metallic money spread quickly and was well accepted by all the civilized peoples of antiquity. However, its
own nature held the seed of its obsolescence.
In fact, metallist systems have a very precise limitation to their development: the quantity of minting metal in
every geo-political society at any given time. This limitation is so precise, that soon it became apparent that
the systems of metallic and concrete money had to be discarded to go back little by little to money systems
whose character was an absolute abstraction.
As we have already said several times, money systems are abstract constructions with the function of making
the exchange of real goods easier, because of their evaluation. These abstract constructions are simple images
of the real goods exchanges and must circulate simultaneously, evolving and being adapted to them. When
this adaptation does not happen spontaneously, it becomes necessary to introduce an appropriate monetary
strategy: the invention of money.
In a regime of metallic money this strategy becomes impossible. In fact the philosopher's stone which
transforms any metal in gold has not yet been discovered, therefore it is not possible to increase at will the
existence of monetary metal when it is insufficient for the quantity of goods on the market.
Every time a market becomes in excess dynamic and productive, the lack of minting metal causes new sorts
of monetary instruments to appear, less limited in their possibility of expansion.
Historically, bankers have been originators -and main beneficiaries, even if not the only ones- of these new
forms of money, more and more abstract and far from the reality and intrinsic value of metallic money.
Let us see now, very shortly, the history of this return to the necessary abstraction of the money system,
which is not definitely reached until 1914.
Already in the Middle Ages, in Europe, the shortage of precious metals urged kings and other minting
authorities to effect money manipulations either secretly or publicly. Since the coinage and legal circulation of
money were in their hands, these authorities could make the face and legal value of the coins not to
correspond to the actual value of the metal. This could be done in two different ways: by minting new coins
with the same face value but with a lower contents of metal; or oficially and artificially increasing the face
value of the pieces in circulation. This way, the minting authority could effect payments using a smaller
quantity of metal. These proceedings were ordinary practice during the whole of the Low Middle Ages, when
royal treasuries were almost permanently indebted and could solve their problems with this monetary
stratagem.
But this solution was short lived, as the logic consequence of the manipulations was the increase of prices and
salaries; an increase which produced a new difficulty to the treasury, which was compelled to effect new
manipulations, starting an endless cycle. Of course the ones to suffer more were always the lower classes,
who had not enough buying power to face the price increases, and who could not manipulate the money
which was imposed on them.
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