Types et Pouvoir de l'Argent

Types of Money

• Money exists in diverse forms.
• Two main categories:
  • Commodity money: Value linked to a physical object. Examples include shells, cloth coupons, specific metal objects (iron, brass, copper), and notably gold, silver, and other metals. Value based on beauty, use in adornment, and difficulty of counterfeiting.
  • Debt money: Value based on agreements between individuals or institutions. Value depends on established rules and the ratio between the quantity of money and its usage. Examples include money made from low-value metals (copper, bronze), records of debt between merchants (commercial paper), and unconvertible banknotes issued since World War I, especially after 1971/1976.
• These categories are not independent or perfectly interchangeable, they often coexist.
• They rely on trust.
• They are exchanged according to exchange and convertibility rules.

Power of Money and States

• Money and debt are instruments of power.
• States often control monetary power.
  • Holding a debt claim gives power to collect payment.
  • The authority issuing currency has power via legal tender status (sign must be accepted as legal currency).
  • The difference between minting cost and currency worth represents profit (seigniorage).
• Limits to Monetary Power:
  • Convertibility rules: Ability to exchange one currency for another at a fixed or independent price grants escape from state control. Dictatorships/crisis-affected countries often restrict exchange.
  • Trust rules: Excessive use of power (e.g., excessive money printing) leads to devaluation (inflation/hyperinflation).
  • Hyperinflation: Annual inflation of 50% or more for several years or 100% in a year.
• Hyperinflation frequently occurs in countries facing crisis and having authoritarian regimes, undermining both convertibility and trust.

State Capture of Monetary Power

• Modern states aim to capture monetary power by:
  • Establishing a monopoly on issuing currency (particularly physical money).
  • Controlling convertibility and trust rules.
• State control varies by currency type
• Types of Money:
  • Vertically controlled: Material currency (coins, bills). State has direct control or influence.
  • Horizontally controlled: Market-driven currencies, partially influenced by state rules. Examples include exchange-traded money, bank money, account money (like bitcoin) whose value and usage is based on market processes.