Wesley Mitchell
Quotes From
“The Role of Money in Economic History” (1944)
- When money is introduced into the dealings of men, it enlarges their freedom. . . . By virtue of its generalized purchasing power, money emancipates its users from numberless restrictions upon what they do and what they get. As a society learns to use money confidently, it gradually abandons restrictions upon the places people shall live, the occupations they shall follow, the circles they shall serve, the prices they shall charge, and the goods they can buy. Its citizens have both a formal and a genuine freedom in these respects wider than is possible under an organization in which services and commodities are bartered. Adam Smith’s “obvious and simple system of natural liberty” seems obvious and natural only to denizens of a money economy.#Quoted in Axel Leijonhufvud, “Costs and Consequences of Inflation” (1975)
Posts About
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Money and its Institutional Substitutes: The Role of Exchange Institutions in Human Cooperation
This paper offers an increasing returns model of the evolution of exchange institutions building on Smith’s dictum that “the division of labor is limited by the extent of the market”. Exchange institutions are characterized by a tradeoff between fixed and marginal costs: the effort necessary to execute an exchange may . . .