ABSTRACT
In economics, the traditional perspective from which to explain simultaneous economic behaviour goes under the rubric of general equilibrium analysis. Such an approach is characterized, in part, by the complete elimination of the non-probabilistic uncertainty produced by the realities of human ignorance and historical time. When introducing a demand for money and monetary equilibrium 1 into a model of this sort, economists often take the position that it is first necessary to set out the particular ‘indispensable’ function, or functions, that money is to perform in that model. 2 Thus one must begin by asking about the purpose to be served by holding money and about the role that money is to play in furthering economic activity. Thereafter, a derivation of the demand for money emanating from the answers to these questions can be given. From such perspectives, a number of specifications of a role for money and a consequent demand for money, some of which are described below, have been proposed. But if one believes, along with Keynes (1937: 216), Shackle (1974: 4, 61, 62), and others, that money is primarily a non-probabilistic ‘uncertainty phenomenon’ 3 then none of these proposals is satisfactory since they are all embedded in an environment in which non-probabilistic uncertainty, hereafter referred to as just ‘uncertainty’, is not present.
