14 Pages

Introduction – John H. Munro

But what is meant by ‘money’ in this volume? We may begin with the catechism presented in so many introductory economics courses: on the four functions of money. e rst and most important is in serving as a medium of exchange. For Aristotle, medieval scholastics and for many in the Classical School, this was and is the only true function of money. But the other three roles of money are also vitally important: as a ‘money of account’, or standard of value used in reckoning prices, costs and values; as a store of value (i.e. if the purchasing power of money remains stable); and as a standard of deferred payment (money in the form of a wide variety of credit instruments). First, we must understand the di erence between bullion and coin; and, second, we must

understand the link between coined money and moneys of account. Only then can we appreciate why debasement is so important in monetary history, and why it helped create the conditions for producing substitute moneys.