Theories of credit money in Japanese Marxian economics: 4 Conclusion

 

conclusion

Inconvertible bank money is not fiat but credit money. Fiat money is issued by government spending. The government buys and consumes commodities and does not have assets corresponding to the issued money. In contrast, credit money is issued by a bank’s lending. The bank has assets backing the value of money. Similarly, central banks’ money is also credit money.

 However, the problem does not end here. When approaching from the theory of money, credit money is a “promise to pay the proper money.” It leaves unsolved the question of what the proper money is.

On the other hand, when approaching from the credit theory, credit money is what the bank delivers to the borrower in lending. The borrower buys the commodity by diverting it, retrieves it by sales, and finally returns it to the bank. Thus, the credit money is self-contained without the proper money. Okahashi, Yamaguchi, and Yoshida persuasively discuss the mechanism of credit money.

However, they do not answer what money is. Moreover, unfortunately, they substitute the historical description for a theoretical explanation of credit money. That is, once, the proper money was gold, and the credit money was a promise to pay the gold money. Currently, the credit money has been inconvertible and functions without conversion.

Instead, modern Uno theorists in Japan have been attempting to elucidate the theoretical genesis of credit money. In addition, there is a potential in rethinking the coexistence of the proper and the non-proper credit money based on three laws of circulation which are originally in Marx’s “The capital.” All of these are based on polymorphism of money, which will guide future research.

 

reference

conclusion

Inconvertible bank money is not fiat but credit money. Fiat money is issued by government spending. The government buys and consumes commodities and does not have assets corresponding to the issued money. In contrast, credit money is issued by a bank’s lending. The bank has assets backing the value of money. Similarly, central banks’ money is also credit money.

 However, the problem does not end here. When approaching from the theory of money, credit money is a “promise to pay the proper money.” It leaves unsolved the question of what the proper money is.

On the other hand, when approaching from the credit theory, credit money is what the bank delivers to the borrower in lending. The borrower buys the commodity by diverting it, retrieves it by sales, and finally returns it to the bank. Thus, the credit money is self-contained without the proper money. Okahashi, Yamaguchi, and Yoshida persuasively discuss the mechanism of credit money.

However, they do not answer what money is. Moreover, unfortunately, they substitute the historical description for a theoretical explanation of credit money. That is, once, the proper money was gold, and the credit money was a promise to pay the gold money. Currently, the credit money has been inconvertible and functions without conversion.

Instead, modern Uno theorists in Japan have been attempting to elucidate the theoretical genesis of credit money. In addition, there is a potential in rethinking the coexistence of the proper and the non-proper credit money based on three laws of circulation which are originally in Marx’s “The capital.” All of these are based on polymorphism of money, which will guide future research.

  

reference

Marx, Karl[1976] Capital: A Critique of Political Economy, Volume 1. London: Penguin Books

Marx, Karl[1978] Capital: A Critique of Political Economy, Volume 2. London: Penguin Books

Marx, Karl[1981] Capital: A Critique of Political Economy, Volume 3. London: Penguin Books

Uno, Kozo [1977] Principles of political economy: theory of a purely capitalist society, translated from the Japanese by Thomas T. Sekine, Harvester

 

日本語文献

岡橋保［1957］『貨幣論：増補新版』春秋社

(Okahashi, Tamotsu [1957] Theory of Money, augmented new edition, Shunju-Sha.)

吉田 暁 ［2002］『決済システムと銀行・中央銀行』日本経済評論社

(Yoshida, Satoru [2002] On Payment Systems, Banks and the Central Bank, Nihonkeizaihyoron-Sha)

吉田 暁 ［2008］「内生的貨幣供給論と信用創造」『季刊経済理論』45(2), 15-25.

(Yoshida, Satoru [2008] Endogenous Money Supply and Credit Creation, Political economy revire, Vol.45, No.2)

山口重克［1984］『金融機構の理論』東京大学出版会

(Yamaguchi, Shigekatsu [1984] Theory of Financial organization, Tokyo-Daigaku-Shuppankai)

山口重克［2000］『金融機構の理論の諸問題』御茶の水書房

(Yamaguchi, Shigekatsu [2008] Problems in the theory of Financial organization the real economy, Ochnomizu-Shobo)

山口重克［2008］『現実経済の諸問題』御茶の水書房

(Yamaguchi, Shigekatsu [2008] Problems in the real economy, Ochnomizu-Shobo)

小幡道昭『経済原論：基礎と演習』東京大学出版会

(Obata, Michiaki [1984] The Principles of Political Economy: basics and exercises, Tokyo-Daigaku-Shuppankai)

小幡道昭『価値論批判』弘文堂

(Obata, Michiaki [2013] Critical Studies of Marxian Value Theory, Kobun-Do)