Books and documents:
Agustí Chalaux de Subirà, Brauli Tamarit Tamarit.
Agustí Chalaux de Subirà.
Agustí Chalaux de Subirà.
Agustí Chalaux de Subirà.
Magdalena Grau, Agustí Chalaux.
Chapter 1. Human monetization.
In many contemporary cultures currency has become, freely or compulsorily,
a key piece in human relations.
It is difficult to imagine the world without currency. The utopias proposing
it, for the time being are unsuccessful. But, at the same time, there is
an intuition that currency not always improves human relations, that it
may also complicate them. We live in this ambiguity.
the last few years -as in certain periods of history of monetized societies-
«money has stopped being a taboo and has become the king».
This sentence belongs to Alain Minc, the right hand of financier Carlo
De Benedetti. In his last book, L'argent fou, he says that he «believes
in market economy, in capitalism and its ability to move about and renew
itself, and therefore he accepts 'the price which must be paid: the weight
of money in our society'. The main problem lies in the fact that «our
capitalism has no countermodel, it has been discovered that there is only
one way of making market economy, and now, within the system itself, a
counterpower must be found», without which «class conflicts
will again appear» and the legitimity of the present economic system
will be put in doubt. «The time has come to say stop, we are on the
verge of slipping». The market which only identifies itself with
money has become «totalitarian». Today we have «minimum
wages» for the rich because the interest ratios are much higher than
inflation. «No salary grows in the same proportion1».
After this surprising accusation, A. Minc stuns us with the solution:
«He recommends the introduction of ethics and the resurrection of
virtue and morality. Economic and life rules which consist of 'neither
selling nor buying shares' and of putting savings in a credit account».
As far as what we know about our economic system, excess production
or subconsumption crises, inflation or deflation, poverty and wealth...
are difficult-to-solve malfunctions. They appear to belong to the very
dynamics of actual capitalism. It is said that they are the unavoidable
price of a system which favours progress, development and modernization.
Actual socialism does not appear to have overcome these problems, and has
even given birth to new ones.
Theoreticians of both systems have considered the monetary problem as
a secondary subject in economics. As long as currency was linked to scarce
precious metals, it caused problems, but its emission was submitted to
some sort of discipline. When currency has freed itself from any actual
correlation, and the only discipline is the one imposed by the needs of
the states and by the interests of the banks, we come to live a radically
new situation, of which we do not know much about. «The position
of economists with respect to currency may appear strange. During the 18th
century when the banks producing notes multiplied themselves, thanks to
which it is possible to carry on a policy to create an autonomous currency,
free from the limitations imposed by the production of precious metals,
economists launched the idea that currency is a secondary phenomenon which
may be ignored when the fundamental economic laws must be studied. This
viewpoint, that has existed since then, does not stop them from regularly
denouncing the monetary disorders which, according to them, are the cause
of the instability of economies. This paradoxal attitude, in any case,
is the evidence of the complexity of the role of currency in modern societies2».
While theoreticians discuss, currency runs all over the world, by means
of computers, looking for immediate profits, taking advantage of the high
interest rates in some countries, buying and selling shares which have
no relationship with the value of the companies which emitted them, speculating
with real estate, with raw materials or with scarce natural resources...
Easy and plentiful money for speculation destroys actual production; worsens
the ecologic depredation; dooms millions of people to destitution; increases
the traffic of influences, tax evasion, drugs and weapons traffic... Here
and there voices are heard which warn against the dangers of speculative
economy, made easier by electronic transactions, for actual economy and
for the lawful State.
Dionis, a professor at the graduate business school, IESE, explains how
serious the situation is. «I remember the warning given in May 1989
by the 1988 Nobel Prize winner in Economics, Maurice Allais, through the
paper 'Le Monde', when he said that the volume of dollars which change
hands daily reaches 420,000 million, while the actual needs do not go beyond
the 12,400 million... No doubt the handling of unexisting money, which
makes 'sharks' or 'yuppies' rich in one day with disregard for the difficulties
produced to the real company, the one which gives service and produces
economic value, cannot be easily accepted. These fictitious businesses
have given us 'Black Monday' in 1987, the 'Sad Friday' in 1989, and the
next crack which may come in the '90s. In the decade of the '90s, either
the real European and world economy become stronger, or capitalism... will
On the other hand, a professor of economic policy in the Keita University
in Tokio, «compares financial markets with a great casino occupied
by speculators with their attention on any possible move», and says
that «it becomes more and more difficult to control these financial
games [...] because financial markets all over the world are now synchronized
and operations are controlled globally, not nationally. We may foresee
that the information of the international networks will convert world markets
into casinos in the '90s, which will cause the appearance of several 'balloons'
and will increase the number of operations that are not based on economic
These recent calls for attention, given by people who know quite well
the present system, are to be added up to those of other people who during
many years have been warning about the dangers of a currency separated
from the actual goods and services market. In 1974, Pierre Mendès-France
already set forth these problems, but the way to solve them has not yet
been found. «For a long time I have been thinking that it is urgent
to protect commercial operations and current transactions from the accidents
produced by the wild migrations of capitals. These migrations must be controlled
and certain panic or speculation agitations must be prevented. Some sort
of police for capital movements should be created. The trend to inflation
can be controlled only if a clear and irresistible law brings together
the monetary mechanism with the controllable needs of the economic life
Simultaneously with these processes of divorce between real economy
and the movement of quick money, basically electronic money, the flow of
black money goes on. «As an average, over one ton of bank notes from
all over the world arrives in Switzerland every day6».
Most of this money may be whitened from fiscal fraud, traffic of influences
or drugs. «The three great Swiss banks [...] have reacted vigorously
against the implications concerning their participation in the Lebanese
connection», but the Minister of Interior of the country has demonstrated
that the couriers who transferred the money from Turkey to Zürich,
via Sophia, did so with the banks bags7».
Some of the present problems are so perilous, that institutions themselves,
which usually have financial control over the States, have started to realize
the absurdity and danger of the situation. «The director of the International
Monetary Fund has addressed the indebted governments asking them to resist
the «extravagant claims» of the creditor banks when claiming
their astronomical debt. Should they carry out these payments, they would
have to give up essential imports and to condemn their countries to starvation.
[This] escape of information has provided the greatest anxiety to the private
sectors of the bank of the rich countries, which now face the consequences
of over a decade lending money imprudently to unstable or weak governments8».
In order to attempt political changes, currency appears to be a key
instrument. President Fujimori promised to change «the currency of
Peru as a step to oppose the crisis». The outgoing president, Alan
García, accepted that «In my government perhaps many errors
have been committed [...] but the emotional burden was too heavy, there
was too much hate, because at a given time we tried to control the instruments
in the handling of money9».
Months have passed, the change of currency has not been introduced and
the situation does not appear to be improving. When, because of an inflationary
situation (as in Argentina) a change of currency takes place (the peso
for the austral, or the comparison of the austral with the dollar), the
name or the value is changed, but the uninformative and corrupting features
are not modified. The results usually are not those which were expected.
The present sort of currency is also a good tool to confuse matters.
«The direct cause of the fall of the federal direction of the party
(The Greens) was the financial irregularities in the purchase and management
of the party's headquarters in Bonn. After having been, for many years,
the great accuser of the corruption in the other parliamentary parties
for the Flick scandal and others, the «greens» have come to
be dispossessed of their aureole of integrity and Spartan simplicity. «Fundamentalists»
accused «realists» of taking advantage in a «despicable»
way of the errors which had taken place and rejected all the accusations
of misappropriation and fiscal irregularities. According to one of the
deposed radical leaders, the scandal was «a move prepared a long
time before in order to integrate the party in the current system, and
to remove its revolutionary and anticapitalistic character10».
Before the 1929 crack, some social sectors earned a lot of money. When
everything burst, only a few won. Almost everybody lost, and the crisis
spread all over the world, and with it the war too. It is always like that.
An infernal cycle: quick profits separated from the real market, crisis,
and a war to overcome the crisis. In 1929 monetary authorities refused
to interfere on time. Now, even if they did interfere in the States they
would not know how to control international speculation. The lefts and
the alternative parties do not say nor do much with respect to this. Perhaps
the dream prevails that the crisis will lead to the end of capitalism,
which will bring about the birth of a new society...
In face of monetary and economic problems, the ordinary citizen feels
overwhelmed. He does not understand much, hides in his nest and hopes that
after all it will only be an alarmism. He cannot accept the fact that he
is in a steerless vessel. This frightens him. He exculpates himself by
saying «economists and politicians should solve this, thats what
they study for and thats why they collect our taxes!»
But citizens who do not want to be irresponsible must perforce try to
understand some more about the power of currency, if they are to know in
which vessel they are sailing and how they can co-operate to avoid shipwrecking.
very clear» origin.
We must admit that the origin of currency is not clear. And perhaps
it is not because no agreement has yet been reached as to what is currency.
What we know is that in different cultures and times a wide range of tools
and objects is found, of which there are indications that they have had
«monetary» functions. But these indications from the past are
under the risk of being interpreted by historians according to conceptions
and realities of the present. Currency is one of the items in this dangerous
position, at least if we consider the poor results obtained while trying
to find its origins.
Generally speaking, as we shall see, we may say that currency is an
old invention which appears under different shapes («token-goods»,
clay, tools, metals, paper, cards,...), may show different features (personalization,
anonymity, intrinsic value, abstract equivalence,...) and can fulfil several
functions (account unit, exchange means, value deposit,...). This ancient
and peculiar invention has improved the exchange of all sorts of «goods
and services» between and within the cultures which have developed
a greater or lesser degree of productive specialization.
Communal cultures, inside which the reciprocity of presents prevails,
have also accepted in many cases one form of currency or other in their
relations with other communities or with the societies in which they are
Popular literature on this subject, on which citizens and economists
have built up their idea of currency, is full of affirmations like this:
«The most primitive evidence of the use of money is to be found
in the exchange of metal bars made at the Babylonian temples around 3000
b.C. The most ancient known currency belongs to the 7th century b.C.»
«The primitive forms of money varied all over the world. Usually
they were items which could be used clearly and easily, not too large and
on which everybody agreed they were desirable. Cocoa beans, feathers, olive
oil and skins had been used as currency. Shells were one of the most usual
forms of primitive currency. Shell necklaces were used mainly in the Pacific
islands. Different metal rings were some of the most important common currencies
in prehistoric times: they were used in wide areas of Europe and of the
Middle East. In Tibet and China tea tablets were among the first forms
«They understood that instead of exchanging objects it was better
to use valuable pieces, that were small and handy, to exchange them for
goods. Everything would be exchanged for one, two, three or more gold straws,
according to their value12».
«Homer heroes stated in oxen the value of their weapons. Also the
Egyptians, Germans and old Romans calculated with oxen13».
All the above information, given out without any chronology nor connection,
is a conglomeration of data which reinforces the idea that currency was
created with an intrinsic value, as a third commodity, to improve the exchange
of goods, and that all these «primitive» forms are only useful
to help the birth of the monetary perfection: the coined metal pieces.
To these, books dedicate half their pages, and the others are used to explain
the modern evolution of currency (from paper to electronics), an evolution
which, paradoxically, contradicts most of the theoretical advantages of
Mercy, market, money.
It is not our task in this essay to develop a complete historic study
on these matters, but we will try to demythicize an imposed view of currency,
generally accepted but mostly irreal. We shall try to briefly set out a
hypothetical approach to the various expressions of the monetary fact.
All history is a hypothesis.
In the diversity of human cultures which have thrived and still thrive
on our planet, many have felt the need to exchange objects, usually held
in excess, for others, of which they normally have a shortage, either outside
their community (with other communities or societies) or inside their own
culture (among groups or individuals).
For many centuries and in many places, this need has worked out in a
sort of market which is based on the reciprocal gift, a gift whose measure
of value is the subjective satisfaction of those carrying out the exchange.
It is a market for the exchange of gifts, gracious (mercy), qualitative,
ritual. At present, in spite of the destruction they are suffering, there
are still cultures which consider this sort of market as the most dignifiedly
human. The reciprocity market produces human values (prestige, fame,
personal responsibility...) and social values (to maintain peace, to acknowledge
the relationship bonds, to strengthen collective alliances...) which are
considered as important as the value of the exchanged «material»
object, or even more.
In the reciprocity market, thanks to the stimulus of these human and
social values, it is also usual to cause some sort of productive rivalry
and, therefore, overproduction and abundancy. An abundancy that is relative,
of course, and in proportion to their desires, which are not usually too
sophisticated nor numerous. The maintenance of these forms of the reciprocity
market is not only a problem of protection of the «values»
of «primitive» communities, but it has also much to do with
the problem of «famine», which attains 2/3 of the present day
human population: In the West we have considered these forms of reciprocity
and production market for consumption old-fashioned and to be the cause
of the problems of lack of development suffered by these cultures (as seen
from our standpoint, which considers the Western model as the summit of
Both the capitalistic and socialist strategies of the Western states,
companies and non-governmental oraganizations for help to development,
have been calamitous: many attempts have been made to «substitute
the indigenous reciprocity process by a 'profitable' production process
(profitable in terms of change)», that is «to develop... private
or collective forms of production to direct the indigenous production towards
exchange and the creation of exchange currency»; «this I suggest
should be called an economicide14».
But other cultures, especially those in which the market has become
so complex and far-reaching that the trust and the ethnic bonds needed
by reciprocity have been lost, have felt the need to carry out exchange
more satisfactorily than the subjective-qualitative market15».
These cultures use what we might call monetary units, completely
abstract realities, which allow to make a «rule of three»,
an equivalence of value between two objects to be exchanged. In the same
way we measure definite distances by using conventional and abstract length
units (for example, the metre), to measure the exchange value of actual
goods we use monetary units: these are conventional measuring units, abstract
and homogenizing. They are an abstract accounting the common denominator,
and allow to compare all the heterogeneous goods existing in a given market.
Thanks to the fact that to every heterogeneous good is ascribed a number
of abstract, homogenizing units, it becomes very easy to calculate numerical
equivalences among different goods.
The immediate consequence of the introduction of monetary units in a
market is the verification of trade values. These trade values are
the result of the homogenizing comparison between concrete goods
and abstract monetary units. This means that they are mixed values
Prices (for example: 1 kg potatoes is equal to 60 monetary units)
and salaries (for example: 1 labour day is equal to 4,000 monetary
units) are the direct trade values.
On the other hand, what we call currency is the buying power
of a monetary unit to buy some given commodities (for example: with
a monetary unit I can buy 1/60th kg potatoes or 1/4,000th labour day).
We can say that currency is an inverse trade value.
The possibility that in many cultures an abstract monetary unit
may have been used, has not even been considered as a key to the interpretation
of many objects which were considered «currency». They were
not easily adaptable to the commodity-currency (such as gold), considered
as the only «true» currency.
It is possible that many of these «monetary» items may be
either signs of wealth and prestige, or standards for value measurement.
In the first instance they are offered or exchanged at given moments or
for given events with the social function of creation and maintenance of
bonds of friendship and relation. While being standards for value measurement,
these objects are almost never exchanged but are used as an abstract reference,
or a tool for counting and calculating, which is used to establish equivalences
This hypothesis would allow us to set the use of «oxen»
(in Greece, Egypt, Germany and the archaic Rome) as an abstract monetary
unit, as a reference unit which allows to establish «rules of three»
between two items being exchanged. This hypothesis appears to be much more
consistent than that of the use of «oxen» as currency-commodity
which must be divided, exchanged and transported for each exchange! If
this were so, we would discover a great misunderstanding which has been
complicating things up until now.
Most of the time, available documents are not sufficient to reliably
confirm this interpretation. This difficulty mainly, comes from the fact
that the studies carried out are usually guided by the «currency-commodity»
view and not by the «abstract monetary unit» hypothesis. In
spite of these difficulties, we have chosen a couple of examples which
appear to be going in the indicated direction.
The inhabitants of the Admiralty Islands (Malaysia) can estimate all
their belongings in shells and dog's teeth. In their current exchanges,
however, the shells and dog's teeth are almost never used, but their use
is compulsory in ritual exchanges.
Among the Lele of Kasai (Congo), the raffia fabric is the wedding assets
that every man who wants to marry must possess. But, at the same time,
the commodities which do not belong to the ritual exchanges can be assessed
in units of raffia fabric. Therefore, the raffia fabric isn't an actual
commodity in theses exchanges, but a value standard.
The most significant case is told by a 19th century French explorer,
L.G. Binger, who explains a business operation being carried out between
two traders from north Ghana (where, as in many other parts of Africa,
cauris -shells- were used as currency): «The salt calabash is worth
2,000 cauris, 100 kola are worth 1,000 cauris. I shall therefore
give you 200 kola for one salt calabash16».
Up to now we have seen two different ways of solving the exchange problems:
the reciprocity market (without currency) and the exchange market
(with an abstract monetary unit to count equivalences). Because of the
growing complexity and the fluctuation of trade values, prices, salaries
and therefore, currency of some cultures today, they have considered it
necessary to find new forms of exchange. These cultures found instruments
that allow transactions to be quicker, more comfortable, more agile, exact,
sure.., than those offered by the exchange market (only with an abstract
These cultures invented the monetary instruments. With these,
the direct exchange of goods can be substituted by a system of change delayed
in space and time. Using the monetary instruments it becomes possible to
obtain the desired commodity without giving any other commodity in exchange.
The monetary instruments are, therefore, a «debt acknowledgement»
which, in the end, can be stated in two very different ways:
- either as a document registered in a system of personal current accounts,
which allows to compensate the monetary units of every sale-purchase operation.
- or as a commodity currency with enough value to be accepted as a pledge
of the same value as that of the commodity sold, a pledge which allows
buying another commodity at another time.
We shall define and distinguish these two types of monetary instruments
in most of the following chapters. As we shall see, it is possible that
the monetary instrument based on a sort of «personalized current
accounts» came before that based on the «metal currency».
But it is also very probable that, in a constantly expanding market, sooner
o later the system of notations in current accounts became a nuisance,
slow and insufficient and therefore, there appeared the monetary instruments
which we historically know in the West as the metal currency (or any other
form of commodity-currency with intrinsic value).
For the time being, it is only necessary to remember that, generally
speaking, there are different sorts of markets with respect to the use
or non-use of one type of «currency».
- Reciprocity market without any currency.
- Exchange market with an abstract monetary unit.
- Exchange market with an abstract monetary unit and with a monetary
instrument («accounting» or «metal» instrument).
The exchange market, based on the use of monetary instruments, is the one
which has prevailed in most civilizations, i.e. where the city culture,
with or without a State, has substituted the other cultural organizations,
mainly communal ones. Monetary instruments have invaded most of contemporary
human relations, even in communal cultures (with more or less incidence),
so that the most accurate study of the functions of the different types
of currency (with their dangers and possibilities) becomes a key item for
the understanding of and the attempt to solving an important part of human
Following the purest tradition, we may say that currency has mainly
- Unit of account (improves equivalence).
- Means of payement (improves exchange).
- Value deposit (improves savings and investments).
The first two functions, as we shall see, are quite independent from the
type of monetary instrument used. This means, they might be carried out
with gold coins or with a system of cheques and notations in current accounts.
Their social and economic results are different in each case.
The third function actually does depend on the type of monetary instrument
because, as long as this accomplishes the reserve function in the wrong
way, people will be compelled to get rid of it and go back to bartering
-typical of high inflation moments. If the instrument carries out its reserve
function well, then people will try to treasure it as a source of wealth.
Its circulation will be reduced, and it will be difficult for the currency
to carry out its function as intermediary change.
It will be necessary to add a fourth function to those three functions
of the monetary instruments which has, up until now, been ignored, but
which is fundamental in order to take advantage of the possibilities of
the electronic money:
- Information system (improves macroeconomy and the lawful State).
Minc propone un cambio radical en el sistema capitalista», El
Correu de la Unesco», February 1990.
real y economia especulativa», Actualidad Económica, 25.12.1989.
rápida globalización económica», El Periódico,
nuevo camino de la economía mundial», Actualidad Económica,
banca suiza teme que el escándalo del blanqueo de dinero del narcotráfico
afecte a su prestigio», La Vanguardia, 8.11.1988.
socialistas exigen que se confisque el dinero sucio!, Cinco Días,
deuda del Tercer Mundo devora los beneficios de los bancos privados»,
La Vanguardia, 1.3.1990.
ofrece un gobierno de unidad nacional», El País, 11.6.1990.
'verdes' de la RFA ante el cisma», El País, 6.12.1988.
Richard (1976), «Els Diners», Plaza & Janés, Barcelona,
1978, pp. 3-4
Francisco, «La història dels diners», La Caixa, Barcelona,
Nitsche, (1970), «El dinero», Editorial Noguer, S.A., Barcelona,
1971, p. 11.
Temple, «Alternative au Développement», Centre Interculturel
Monchanin, Montreal, 1989, p.97.
Grau, «Moneda telemàtica i estratègia de mercat»,
Centre d'Estudis Joan Bardina, Barcelona, 1985, chapter
2. In this work are submitted the bases of criticism to present currency
and the foundations of a rational currency. It is the first essay submitting
Agustí Chalaux's contributions on these matter.
Correu de la Unesco», February 1990.