ABSTRACT
The analysis of the modern industrial state, whether capitalist or socialist, presented in the preceding two chapters leads to the conclusion that the power of the monetary system comes from the centre, and is born out of the interaction of the state treasury and the central bank, which in their turn react, directly or indirectly, to transactions carried out in any part of the system. The fact that the system is itself divided into two sectors, separated by the boundary of the pure-money complex, does not mean that the external sector is in any real sense autonomous. It is to some degree independent, so that the system of distribution of money within it is indeterminate. In the last analysis, however, the monetary system of an industrial economy has a boundary which corresponds to its political frontiers.1
