Re: Waiting for Gidot (or where is Gary M.)?

[GGard97342@xxxxxx]

In a message dated 05/03/01 00:59:54 GMT Standard Time, tomasson@xxxxxxxx
writes:

> Paul:
>
>  Thank you for your comments - let me make two points:
>
>  In response to my statement:
>
>  As indicated by the non-underlined part, Keynes did his work on liquidity
> preference without benefit of a coherent definition of "money" - I invite
my
> good friend Geoffrey Gardiner to elaborate the point,


Gunnar,

I hope that the chapter I am writing for Randy Wray will answer the purpose.
I hope briefly to show how for 40,000 years people have transformed trade
credit, almost certainly the original form of credit, into a means of
exchange. Thus an illiquid asset has been turned into a negotiable asset with
excellent liquidity. The mechanism for doing this has been the bill of
exchange in its various manifestations from knots in a piece of rope to tally
sticks to Babylonian case tablets to documentary credits.

"Bill of exchange" does not appear in the index to the GT. In Schumpeter it
gets one reference to page 695. Schumpeter has moreover misunderstood Tooke.

Money is only assignable credit and as credit is the origin of money, the
study of money should begin with the origin of credit. Any credit is capable
of being monetised, given the right legal system.

Michel Hudson's ISLET conference at the British Museum last November revealed
a fascinating example of early money and the silver standard. Bill Hallo of
Yale was giving his paper on second millennium BC examples of double-entry
bookkeeping but in addition he happened to mention a particular kind of
tablet of which the Museum has about 700 examples. Each tablet consists of a
receipt by a temple for a quantity of silver. If one breaks open the tablet
one finds inside another tablet which is an instruction to pay the silver to
bearer. Effectively they are as much bank notes as the Bank of England's
notes during the era of the gold standard. As the tablets have been found
intact, it was obviously not necessary to encash them. One wonders what
records the temples kept of their liabilities, and whether they really had
the silver to meet them.

Geoffrey Gardiner