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Thomas Attwood on the role of money

May 4, 2011

Adding to currency in circulation would have economic benefits 

 

Attwood argued that rival economists completely misunderstood the role of money. His list of agents used as money is quite remarkable in that it included elements rarely appreciated by other economists of this date: 

“Bills of exchange, transfers, book debts, hank notes, gold and silver and indeed of everything that passes for money in any shape or way” were creations of mind, “created by confidence, supported by confidence, and discharged by confidence.”  

 

The crucial role to be played by bank notes rested not in their ability to make exchanges but “in giving a spirit, a confidence, to the whole.” 

Money, therefore, needed no separate existence based upon value. In his opinion, arguments for and against a particular standard, whether gold, silver, or some other object, were irrelevant. 

Ricardo had argued, earlier, that an addition to the currency circulation would have no impact on economic growth, but Attwood claimed that bank notes were “alive”; they could break open the “prison doors” that bound society. They would create markets by influencing both supply and demand. 

Information source: Thomas Attwood: the biography of a radical  by David J. Moss, McGill-Queens University Press, 1990

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