24 Pages

Enter the ghost

Cashless payments in the early modern Low Countries, 1500–1800 1
ByOscar Gelderblom, Joost Jonker

In the Low Countries and probably elsewhere in Europe, ghost money eliminated many problems associated with paying cash by enabling people to settle transactions in a widely accepted fictional currency. In this chapter, the authors argue that merchants chiefly economized on coin by using money of account or ghost money, a well-known but underrated phenomenon that facilitated payments to a much higher degree than hitherto appreciated. By taking cash payments as a sign of economic modernity and, conversely, their paucity for backwardness, the strand of literature echoes the old idea of economies evolving from a Naturalwirtschaft via a Geldwirtschaft into a Kreditwirtschaft. Cash settlements are then taken as a sign of market-oriented production and an advanced economy, cashless exchange as backward barter. An absence of cash payments may signify the existence of cashless payment networks, in which cash and credit could both substitute and complement each other, or perform entirely different functions, depending on circumstances.