ABSTRACT
In 1892, Karl Menger published a famous paper 'On the origin of money', in which he argued that money is 'the spontaneous outcome, the unpremeditated resultant, of particular, individual efforts of the members of a society, who have little by little worked their way to a discrimination of the different degrees of saleableness in commodities' (p. 77). The widespread adoption of the precious metals as media of exchange, for example, was because 'their saleableness is far and away superior to that of all other commodities' (p. 80), where Menger defined 'saleableness' as the 'facility with which they can be disposed of at a market at any convenient time at current purchasing prices' (p. 72). Although the origin of money was therefore a social, and not a state institution, this did not deny the need for a public monetary authority, and Menger concluded his theory with a powerful analogy: 'by state recognition and state regulation, this social institution of money has been perfected and adjusted to the manifold and varying needs of an evolving commerce, just as customary rights have been perfected and adjusted by statute law' (p. 82).
