Commodity Money Research Articles

Examining the Writings of Satoshi Nakamoto: A Monetary Analysis of the Bitcoin Protocol

ABSTRACT This paper considers the design of the Bitcoin protocol from a monetary perspective. To this end, it relies heavily on the publications of the creator(s) of Bitcoin, Satoshi Nakamoto, on different mailing lists and forums. It first expounds the political and economic motives which led Nakamoto to build an electronic system of payment based on ‘proof’ rather than on ‘trust’. Then, it considers the predetermined nature of the issue of bitcoins and support the view that one consequence of this issuing rule is that the bitcoin has no ‘monetary standard’ in any of the senses that have been attributed to this term in the literature. Finally, it deals with the concept of ‘synthetic commodity money’ and the widespread comparison of bitcoin to the Iraqi Swiss dinar. The conception of the monetary standard as a measure of the appreciation or depreciation of money is then used to distinguish the bitcoin from the Iraqi Swiss dinar.

Risk management and marketing in the IT industry for course analysis and forecasting of commodity money

Risk management and marketing in the IT industry for course analysis and forecasting of commodity money

Origins of money: a Motivation & Sedimentation Model (MSM) analysis

Abstract Few other social technologies and institutions are more consequential to human societies than money. Yet money remains a deeply perplexing phenomenon. On the one hand, it is a pan-human system of valuation, but on the other, it is conventional and variable in its uses. While it is controversial if money instantiates a fully-fledged sign system, it is rife with semiotic capacities. To present an illuminating analysis of money is thus a test case for the Motivation & Sedimentation Model (MSM) of meaning making, with roots in the phenomenology of Husserl and Merleau-Ponty. Using MSM, we analyze two origin accounts of money: the commodity money account evidenced in archaic and classical Greek coinage, and the credit money account exemplified by early findings in Mesopotamia. Both accounts focus on the interactions between the three levels of MSM: the pre-signitive Embodied, the cultural Sedimented, and the interactional Situated levels of meaning and propose different series of “loops” to account for the genesis of money. Despite key differences in the two origins, both imply semiotic processes operating according to motivated, and hence non-arbitrary, conventions developing within institutional formations that ultimately influence present day concepts of money.

Bringing Money to the Market: The Ambiguity in Polanyi’s Third “Fictitious Commodity”

The contribution examines Karl Polanyi’s analysis of the fictitiousness of the commodity description of money, and its suitability as a reference for the analysis of the commodification of money within contemporary markets for credit and finance. Any critique of the commodification of money that draws on Polanyi’s influential argument should distinguish between two fundamentally different meanings of the occurrence of money as a commodity: the institutional system that makes some commodity money versus the commercial practice that turns money into a commodity. Only a particular strand of Polanyi’s analysis provides a point of reference for a comprehensive critique of the commodification of money, rather than the monetization of some type of commodity. Departing from the aspects of Polanyi’s analysis that are specific to the political economy of the gold standard, the article draws on Polanyi’s material account of the essential contributions of public organization and social convention in the constitution of money. On these grounds, the commodification of money is potentially objectionable as the social disembedding of a common public institution.

The Song Dynasty’s Fiscal and Economic Policy and Its Social Economy

The fact that industrial and commercial taxation in the Song dynasty greatly exceeded agricultural taxation was unprecedented in previous dynasties. This is mainly explained by the Song government’s financial and economic policy which was dominated by industrial and commercial taxation, made good use of the laws and characteristics of market relations and the commodity economy in business operations, actively stimulated consumption and was clearly utilitarian. Under this policy, the rulers, in pursuit of huge profits, used state power and mobilized various resources to implement a monopolies system and a commercial tax system, which, in turn, helped develop the commodity money economy, expanded the scale of market exchange and promoted the high degree of development of the commodity economy of the time. The financial and economic policy of the Song dynasty showed the unique advantages of the imperial state’s intervention in the economy. It was this that distinguished the Song dynasty from other dynasties in terms of the prosperity of the commodity and monetary economy.

The properties of contemporary money

AbstractThe properties of money commonly referenced in the economics literature were originally identified by Jevons and Menger in the late 1800s and were intended to describe physical currencies, such as commodity money, metallic coins, and paper bills. In the digital era, many non‐physical currencies have either entered circulation or are under development, including demand deposits, cryptocurrencies, stablecoins, central bank digital currencies, in‐game currencies, and quantum money. These forms of money have novel properties that have not been studied extensively within the economics literature, but may ultimately determine which currencies prevail in the forthcoming era of currency competition. This review makes the first exhaustive attempt to identify and organize all properties of physical and digital forms of money. It examines both the economics and computer science literatures and categorizes properties within an expanded version of the canonical Jevons–Menger framework.

Tax Erosion in Seventeenth-Century Naples: Tommaso Campanella on Causes and Remedies

Writing in the first decade of the seventeenth century, Tommaso Campanella (1568–1639) studied tax erosion and proposed remedies that he promised would “transform a harm into a benefit.” The factual evolution of tax revenues and prices under the monetary and fiscal systems of his time confirms his diagnosis. A simple model built on his assumptions shows how clipping produces tax erosion in a commodity money system, and it illustrates how Campanella's plan not only eliminates this harm but also produces the benefit of higher government purchases at the expense of rentiers. A broader reading of his work clarifies the distributional implications of his proposal in the light of his radical egalitarianism and his goal of a united, harmonious society.

Money Supplies

From the spread of silver as commodity money in the early modern world to mass-produced national currency in the nineteenth century, coins had a dual nature. They supplied facts about the past when they were investigated by antiquarians, and they required knowledge of materials and their supply when used as currency. This essay explores a little-researched borderland between economic history and history of science: the work of assayers and mint officials, where antiquarian and commercial interests merged.

The “Control Space” of the State: A Key Element to Address the Nature of Money

The academy has traditionally tended to classify the study about money into two approaches that are often considered incompatible: commodity money and debt money. The first one presents money as a commodity that, thanks to its particular characteristics, allows transactions to be carried out in a much more efficient way than the simple barter. The second one considers that money is a type of debt used in a certain institutional context to facilitate transactions, normally issued by one State to distribute the resources produced in the territory over which it exercises its power. In this work, it is argued that these two approaches are not necessarily incompatible and that an analytical tool can be used to detect a common framework and thus better address the nature of money: the “control space” of the State. JEL Classification: E40, E42, E52

The underexamined role of money and how it undermines Nozick’s case for right libertarianism

In Anarchy, State and Utopia, Nozick presented his doctrine of right libertarianism, largely a contemporary restatement of Locke’s moral imperative that an individual’s rights to his life, liberty, and property are absolute and place limits on state action. Parallelly, Nozick espoused the free-market system as a framework that not only respects individual rights but ensures material benefits. While the free market results in radical inequalities in holdings and widespread dispossession, Nozick treats the process as morally just and any state redistribution through taxation as wrong. However, neither Nozick nor his many critics fully considered the role of money in capitalist free markets, an omission I begin to address.
 
 Nozick asserts that money emerges pre-politically through the uncoerced actions of individuals, and that it derives its value from the commodity that underpins it. This conception of money underpins Nozick’s claims that a minimal state can be just and that the free-market system is a moral, efficient, and neutral allocator of resources. However, Nozick’s approach omits addressing how money’s general acceptability and stability are achieved. Answers can be found in heterodox economic paradigms, which put the state at the center of money creation, rendering money (and the state) incompatible with natural rights. Furthermore, by insisting on money’s commodity nature, Nozick ignores the seventeenth century revolution in money, necessitated by the emergence of free-market capitalism and commodity money’s inability to underpin it. In other words, it is not commodity money but credit money that should be the proper object of Nozick’s analysis. I go on to analyze what credit money is, how it arose, and why some form of it is necessary in a free-market context. Ultimately, I argue that it is not compatible with natural rights and is itself redistributive.
 Key words: money, distributive justice, Nozick, Locke, free market capitalism, natural rights

DIGITALIZATION OF MONEY AND PROBABILITY OF CENTRAL BANK DIGITAL CURRENCY

Monetary transactions between closely related individuals are simple and have very low costs. However, the internationalization of transactions increases both the time and financial costs of money transfers. The speed and cost of transactions have become important in the transition from commodity money to cryptocurrency. The development of the internet and technology has accelerated the transformation of money. When we look at the development of money, commodity money, coins, banknotes, paper money, representative currencies and finally cryptocurrencies draw attention respectively. In the digital money (cryptocurrency) age, the central bank’s digitalization and issuing its own digital money is one of the issues discussed. Algorithmic digital currencies such as Bitcoin seem to be suitable competitors for central bank price currency and their presence in the market forces central banks to pursue tighter monetary policy. This study examines the transformation of money and the central bank’s stance on digital money. The study concludes that monetary authorities should not remain insensitive to the financial movements that have developed in digitalization. The issuance of their digital currencies by central banks will reduce the cost of delay and enable them to keep pace with the developing technological age.

ИССЛЕДОВАНИЕ НАУЧНО-ТЕОРЕТИЧЕСКИХ АСПЕКТОВ ИСПОЛЬЗОВАНИЯ КРИПТОВАЛЮТ

The article is devoted to the study of the formation of innovative mechanisms of decentralized virtual currencies, in particular on the example of Bitcoin. For most of its history, mankind has used equivalents based on commodity money as means of payment. Money is a specific commodity that has the maximum level of liquidity and has been used as a universal equivalent for determining the value of all goods and services for a long historical period of time. The development of money as a universal equivalent is inextricably linked with the development of the entire human civilization. Blockchain technology is not the easiest thing to understand, it is difficult to develop and apply. Nevertheless, it is actively developing and attracting more and more investments. Unfortunately, these technologies have not yet found their consolidation in Russian legislation, as it has been done in European and Western countries.

A Diamond-Based Autonomous Commodity Money for BRICS Countries and Global Public Use

A Diamond-Based Autonomous Commodity Money for BRICS Countries and Global Public Use

TOWARDS AN INTERPRETATION OF CRYPTOCURRENCY AS A COMMODITY FROM MAQASID AL-SHARI’AH PERSPECTIVE

From days of simple barter to the age of digital entries, the evolution of money is proof of a human sense of resourcefulness. Besides the universal acceptance of money as wealth, conventionally it is regarded as a commodity and according to Islamic jurisprudence, though money is used as a medium of exchange and store of value, it cannot be sold at a price higher than its face value or rented out. There has recently been increasing work on the position of commodity money and fiat money in the context of Islamic finance theories and commodity markets. Whereas traditional fiat currency plays a vital role in the socio-economy, digital or cryptocurrency starts to persuade the world economy under the ledger technology. Unlike fiat money, the cryptocurrency spectrum today, under its extreme configuration, intends to offer remarkable opportunities. The conventional works that have provided several studies on the impacts of cryptocurrency in the financial services industry and commodity markets, proportionate to the analysis of the classification of wealth pertaining to digital currencies in order to review the relationship between crypto-token and crypto-commodity. There have been few responses from the Islamic perspective, but not particularly in the light of Maqāsid. Therefore, the paper explores the nature of wealth and the principles involved in the acquisition and protection, and classification of wealth according to Maqāsid al-Shari’ah. With particular reference to a treatise of Maqāsid, the paper investigates five simultaneous characteristics and objectives of wealth deliberated by Ibn Ashur (2001). The last part of the paper analyzes the relationship between the five characteristics of wealth and the cryptocurrency ecosystem, such as tokens, initial coin offerings (ICOs), and cryptocurrency derivatives, to review the research opportunities to propose a more comprehensively sound study in the Maqasid framework.

Commodity money, natural values, and central banking in Ricardo

Ricardo studied the effects of alternative institutions on natural relations and ranked alternative monetary systems according to their ability to equalise the value of money to the natural value of gold. Pure commodity money is at the top of his normative hierarchy, only surpassed by his own "perfect" system. In commodity money systems, the price level is equal to the relative price of gold for "commodities in general", and money is endogenous. The quantity theory, by contrast, comes in operation in monetary system where the gold anchor is lost or works imperfectly. The supposed contradictions of Ricardo's monetary theory disappear within the interpretative framework adopted here. This framework builds on Pasinetti's insights in the role of natural values in Classical economics; develops Ricardo's own type-of-economy approach to monetary analysis; and shows that, far from being a commodity like any other, commodity money is a specific, complex institutional system.

Central Bank Digital Currency in Historical Perspective: Another Crossroad in Monetary History

Digitalization of money is a crossroad in monetary history. Advances in technology have led to the development of new forms of money: virtual (crypto) currencies like bitcoin, stable coins like libra/diem, and central bank digital currencies (CBDC) like the Bahamian sand dollar. These innovations in money and finance resonate with earlier shifts in monetary history: 1) the shift in the eighteenth and nineteenth centuries from commodity money (gold and silver coins) to convertible fiduciary money and inconvertible fiat money; 2) the shift in the nineteenth and twentieth centuries from central bank notes to a central bank monopoly; and 3) the evolution since the seventeenth century of central banks and the tools of monetary policy. This paper makes the case for CBDC through the lens of monetary history. The bottom line is that the history of transformations in monetary systems suggests that technical change in money is inevitably driven by the financial incentives of a market economy. Government has always had a key role in the provision of outside money, which is a public good. Government has also regulated inside money provided by the private sector. This held for fiduciary money and will likely hold for digital money. CBDC could make monetary policy more efficient, and it could transform the international monetary and payments systems.

Commodity Money and the Price Level

This article finds that in an open, free market economy, with a privately accessible state mint and an official currency based on a metallic standard, supply or demand shocks leave prices stable both in the short run and in the long run, with the exception of when the currency is debased. The stabilization property of this kind of currency derives from the mechanism by which changes in commodity prices motivate the holders of the stock of currency to shift their demand for it such that its acquisition cost equates to its purchasing power in terms of goods and services. When a country is large relative to the international market for specie, maintenance of price stability may require adjustments in the seigniorage charge, whereas in countries with closed economies such adjustments are in general imperative. In addition, through seigniorage adjustments, the price level may even be held fixed irrespective of the magnitude and origin of shocks, the relative size of the country, and the degree of its openness, whereas at the zero bound of the seigniorage charge, the same result may be achieved though lowering the specie content of the currency. These results are consistent with the monetary experiences of Athens in classical times, France during the period AD 1350–1436, Spain in the sixteenth century, the United States in AD 1870–1914, and China in AD 1910–35. Additionally, since electronic money such as bitcoin has properties similar to gold or silver, these results may extend to a cryptocurrency standard.

Two Sides of the Same Coin: the Ontology of Money in the Political Economies of David Hume and Adam Smith

"This paper analyses how the so-called metallist theory of money gave way to functionalism in early modernity. Theoretical metallism held that something, in order to perform the role of money, must bear some intrinsic value. Functionalism, on the contrary, endorsed a social ontology of money claiming that anything could perform that role as long as it was accepted as a means of payment. The paper argues that the early modern discovery of the so-called quantity theory of money played a key role in this transition, since this was the idea to question the inherent valueproofness of commodity money for the first time in history. According to our claim, commodity money was gradually replaced by fiat currencies after the former was no longer was regarded as more valueproof than the latter, and this theoretical struggle is clearly documented by Hume’s and Smith’s respective remarks on the subject. Keywords: quantity theory of money, theoretical metallism, theoretical functionalism, Luis de Molina, John Locke, John Law, David Hume, Adam Smith "

Православная церковь и окраинная политика империи (на материалах Сибири конца XIX – начала XX в.)

The article examines the importance of the Orthodoxy spread in Siberia as one of the incorporation forms of the Asian Russia peoples into the economic, administrative and socio-cultural space of the Russian Empire. The evolution of these methods is noted, associated with the changing tasks of the political construction of the empire and the development of commodity–money relations in the economy, everyday life and social relations among the indigenous population of the region during the 18th – early 20th centuries. It is emphasized that in the Russian colonization model of the eastern outskirts of the empire, political and socio-cultural goals associated with the spread of Orthodoxy mutually complemented each other. This was another difference between Russia's colonization policy towards the outskirts of the state and the colonial empires of the West

The Yellow Blaze: Naturalism's Response to Gold Economics in Frank Norris's McTeague

The Yellow BlazeNaturalism's Response to Gold Economics in Frank Norris's McTeague Todd Spooner (bio) "'It was a yellow blaze like a fire, like a sunset; such a glory, all piled up together, one piece over the other,'" recounts Maria Macapa between swallows of whiskey. "'Why, if the room was dark you'd think you could see just the same with all that glitter'" (Norris 29). Whether Maria's colorful tale of her youth in Mexico is real, or is simply imagined through a haze of dementia and alcohol, matters little in the case of the 1899 novel, McTeague. The transparent reality of Frank Norris's work is that the glorious yellow blaze serves as the predominant image of this entropic novel. McTeague's gold infatuation is not so surprising considering the late nineteenth-century monetary controversy among silver proponents and gold proponents. The prospect of operating exclusively on a single commodity monetary platform instilled fears of money shortages, deflation, and economic depression. The controversy eventually settled on demonetization of silver and sole reliance on the gold standard. As the single standard, gold then assumed a precarious identity as both artificial (money) and natural resource (object). This paradoxical nature enables the predominant tension in McTeague. Both relationships between McTeague-Trina and Zerkow-Maria enact this dichotomy and ultimately lead to adversarial behaviors of consumption (injection) and saving (leakage). Trina and Maria, through gold suppression, represent leakage from the economy. McTeague and Zerkow, through extreme resistance to leakage coupled with McTeague's former career as a gold miner, represent injection. Despite the Progressive Era's socioeconomic transformations of urbanization, industrialization, and domestic territorial expansion, McTeague is arguably more concerned with the monetary controversy pitting monometallism against bimetallism. Bimetallists promoted the continued minting [End Page 142] of both gold and silver while monometalism supporters clung exclusively to gold. When monometalism eventually prevailed, gold appropriated its perplexing dual role of glittering fetishized object as well as single commodity money transferable for goods and services. This ambiguous nature provokes compulsory responses from Norris's severely uncultivated characters. Gold, perceived as the superior element by goldbugs through Darwinian discourse, counters the primitive evolutionary status Norris assigns his ethnic characters. Trina, through hoarding practices, actualizes fears of the silverites of a constricting money supply. McTeague, through his background as a gold miner, exemplifies expansion of the money supply and promotion of gold as the standard. Although interpretations frequently vilify greed as the atavistic flaw of the novel's ethnic characters, it is rather the precarious nature of gold that compels adversarial responses of object-inspiring leakage and money-inspiring injection which ultimately determine the savage actions in McTeague. The examination of gold with respect to monetary economics is not novel interpretive territory for McTeague. It is no mystery that gold serves as the principal symbol of the novel, and its dichotomous nature prompts the question—why does the miser save? In his influential work The Gold Standard and the Logic of Naturalism (1987), Walter Benn Michaels has rigorously examined the natural versus artificial qualities of gold and more broadly the relationship between economics and determinism in McTeague. Michaels's work is more comprehensive than the monetary debate alone, instead leveraging Foucauldian discourse to interrogate the logic of naturalism in what he suggests is a false personification of the economy. Michaels expounds upon the economy's ability to serve as subject and ultimately critiques naturalism on this ground. The focus here is more finite in scope as it portends to examine McTeague through the monetary debate on its own terms. Although the Gilded Age is most frequently characterized as a period of progress and expansion, between 1873 and 1879 it was tormented by an international economic depression. As Alan Trachtenberg has expressed, the work of government during this period "seemed concerned mostly with tariffs and money policy" (165). Monetary policy at the time was myopically focused on commodity-based money or, as Michael O'Malley has conveyed, "insistence on a specie economy and the intrinsic value of precious metal" (370). During the years preceding the publication of McTeague, culminating in 1896, the United States was embroiled in a monetary debate between monometallists and bimetallists. Prior...