Digitization and the evolution of money as a social technology of account

Journal of Evolutionary Economics - Tập 32 - Trang 175-203 - 2021
Michael Peneder1
1Austrian Institute of Economic Research (WIFO), Vienna, Austria

Tóm tắt

Throughout the history of monetary thought, economists have predominantly emphasised the function of money as a medium of exchange along with the intrinsic properties that enhance its salability and credibility as the most liquid store of value. But the social institution of money co-evolves with technology. It is significant that the advent of digital crypto-currencies was initiated by computer scientists and has taken economists completely by surprise. As a consequence, it also forces our profession to rethink the basic phenomenology of money. In accordance with the views of Wieser and Schumpeter, digitization brings to the fore the immaterial function of money as a standard of value and social technology of account, which increasingly absorbs its function as a medium of exchange. The potential impact of this on economic policy is huge. The variety of different crypto coins has proven the technical feasibility of competing private currencies as proposed by Hayek. In the long term, however, there is reason to doubt the persistence of intense competition. One must fear that major digital platforms will extend their current dominance in multisided virtual market places to include digital payments and money. Central banks are increasingly anxious to preserve public sovereignty over the common unit of account and are considering issuing their own digital fiat money. After the current era of intense creative experimentation, the potentially new spontaneous order of private crypto-currencies is likely to be supplanted by central bank digital currencies (CBDCs), the design of which will depend on deliberate public choices and policies.

Tài liệu tham khảo

Abadi J, Brunnermeier MK (2018) Blockchain economics, working paper no. 25407. NBER, Cambridge Agur I, Ari A, Dell’Ariccia G (2019) Designing central bank digital currencies, working paper no. 19/252. IMF, Washington Allen D, Berg C, Novak M, Markey-Towler B, Potts J (2020) Blockchain and the evolution of institutional technologies: implications for innovation policy. Res Policy 49(1). https://www.sciencedirect.com/science/article/pii/S0048733319301842 Auer R, Cornelli G, Frost J (2020) Rise of the central bank digital currencies: drivers, approaches and technologies, BIS working papers no. 880. Bank for International Settlements, Basel Bagehot W (1873) Lombard street. A description of the money market. Wiley, New York Barrdear J, Kumhof M (2016) The macroeconomics of central bank issued digital currencies, staff working paper no. 605. Bank of England, London Baumol WJ, Panzar JC, Willig RD (1982) Contestable markets and the theory of industry structure. Harcourt Brace Jovanovich, San Diego Berg C, Davidson S, Potts J (2019) Understanding the blockchain economy. An introduction to institutional cryptoeconomics. Edward Elgar, Cheltenham Berg C, Davidson S, Potts J (2020) Proof of work as a three-sided market. Frontiers in Blockchain 3(2). https://www.frontiersin.org/articles/10.3389/fbloc.2020.00002/full Biais B, Bisiére C., Bouvard M, Casamatta C (2019) Blockchains, coordination, and forks. AEA Papers and Proceedings 109:88–92 Bindseil U (2019) Controlling CBDC through tiered remuneration, SUERF policy note No. 95. https://www.suerf.org/policynotes/7321/controlling-cbdc-through-tiered-remuneration Binswanger M (2015) Geld aus dem Nichts – Wie Banken Wachstum ermöglichen und Krisen verursachen. Wiley-Verlag, Weinheim Böhm-Bawerk Ev (1884) Kapital und Kapitalzins. Erste Abteilung, Geschichte und Kritik der Kapitalzins-Theorien / Capital and Interest. A critical history of economical theory (transl. William A. Smart), Macmillan, London Bordo MD, Levin AT (2018) Central bank digital currency and the future of monetary policy. In: Bordo MD, Cochrane JH, Seru A (eds) The structural foundation of monetary policy, Hoover Institution Press, Stanford, pp 143–178 Boyd W (1796/1811) Report of the committee, drawn up by Mr. Boyd, and approved by the meeting of the 5th April; reprinted in Boyd W. (1811), A letter to the right Honourable William Pitt, 2nd edn. Ridgway, London Brunnermeier MK, James H, Landau J-P (2019) The digitalization of money, working paper no. 26300. NBER, Cambridge Brunnermeier MK, Niepelt D (2019) On the equivalence of private and public money. Journal of Monetary Economics 106:27–41 Cassis Y, Cottrell PL (2015) Private banking in Europe. Rise, retreat and resurgence. Oxford University Press, Oxford Catalini C, Gans JS (2018) Initial coin offerings and the value of crypto tokens, working paper no. 24418. NBER, Cambridge Cesarano F (2014) The puzzle of metallism: searching for the nature of money. History of Political Economy 46(2):177–210 CSIS (2020) How will a central bank digital currency advance China’s interests? London: Center for Strategic and International Studies. https://chinapower.csis.org/china-digital-currency (Accessed 20 Aug 2020) Cukierman A (2019) Welfare and political economy aspects of a central bank digital currency, discussion paper no. 13728. CEPR, London Das D, Dutta A (2020) Bitcoin’s energy consumption: is it the achilles heel to miner’s revenue? Economics Letters 186:1–6 Denzel MA (2008) The european bill of exchange. Its development from the middle ages to 1914. In: Chaudhuri S, Denzel MA (eds) Cashless payments and transactions from the antiquity to 1914, Stuttgart: Steiner, 153-194 (quotations are from the same paper as presented at the IEHC 2006 in Helsinki) de Roover (1944) Waht is dry exchange? A contribution to the study of english mercantilism. Journal of Political Economy 52(3), reprinted in: Kirshner (ed.), 1974. Business, Banking, and Economic Thought in Late Medieval and Early Modern Europe. Selected Studies of Raymond de Roover, Chicago: University of Chicago Press, 183–199 de Roover (1954) New interpretations in the history of banking. Journal of World History 2, reprinted in: Kirshner (ed.), 1974. business, Banking, and Economic Thought in Late Medieval and Early Modern Europe. Selected Studies of Raymond de Roover, Chicago, University of Chicago Press, 200–238 De Lis SF, Urbiola P (2020) Retail central bank digital currencies: means of payment vs. store of value, SUERF Policy Note, https://www.suerf.org/docx/f_e15c78fe25d60a659d23e62645fa1a2d_15609_suerf.pdf Duong J (2020) Overview of central bank digital currency – state of play, SUERF Policy Note, https://www.suerf.org/policynotes/12575/overview-of-central-bank-digital-currency-state-of-play Eichengreen B (2019) From commodity to fiat and now to crypto: what does history tell us? Working Paper No. 25426. NBER, Cambridge Engert W, Fung BSC (2018) Motivations and implications of a central bank digital currency. In: Gnan E, Masciandaro BD (eds) Do we need central bank digital currency? Conference Proceedings 2018/2, SUERF – the European Money and Finance Forum, Vienna, pp 56–71 European Central Bank (2020) Report on a digital euro, Frankfurt: ECB. https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_euro4d7268b458.en.pdf European Commission (2020a) Communication on a digital finance strategy for the EU, COM(2020) 591, Brussels: European Commission European Commission (2020b) Communication on a retail payments strategy for the EU, COM(2020) 592, Brussels: European Commission Evans DS, Schmalensee R (2005) Paying with plastic. The digital revolution in buying and borrowing, 2nd edn. MIT Press, Cambridge Evans DS, Schmalensee R (2016) Matchmakers. The new economics of multisided platforms. Harvard University Press, Boston Fatás A, Weder di Mauro B (2019) Initial coin offerings: fundamentally different but highly correlated. In: Fatás A (ed) The economics of fintech and digital currencies. CEPR, London, pp 75–82 Ferguson N (2008) The ascent of money. A financial history of the world. Penguin Press, New York Fernández-Villaverde J, Sanches D (2018) On the economics of digital currencies working paper WP 18-07. Federal Reserve Bank of Philadelphia, Philadelphia Fernández-Villaverde J, Sanches D, Schilling L, Uhlig H (2020) Central bank digital currency: central banking for all? Working Paper No. 26753. NBER, Cambridge FSB (2020) Regulation, supervision and oversight of ‘global stablecoin’ arrangements. Final report and high-level recommendations. Financial Stability Board, Basel Fuller EW (2020) A source book on early monetary thought. Edward Elgar, Cheltenham Gnan E, Masciandaro BD (eds.) (2018) Do we need central bank digital currency? Conference Proceedings 2018/2, SUERF – the European Money and Finance Forum, Vienna.? Goetzmann WN (2016) Money changes everything. How finance made civilization possible. Princeton University Press, Princeton Government Office for Science (UK) (2016) Distributed ledger technology: beyond block chain. UK Government Office, London Grym A (2020) Lessons learned from the world’s first CBDC, Bank of Finland Economics Review 8. https://helda.helsinki.fi/bof/handle/123456789/17590 Hagemann H (2010) L. Albert Hahn’s economic theory of bank credit, working paper no. 134, Wirtschaftsuniversität Wien, Vienna Hahn LA (1924) Volkswirtschaftliche Theorie des Bankkredits, 2nd edn. Mohr, Tübingen Hayek FA (1976/1990) Denationalisation of money: the argument refined. An analysis of the theory and practice of concurrent currencies, 3rd edn. Institute of Economic Affairs, London Heblich S, Trew A (2019) Banking and industrialization. J Eur Econ Assoc 17(6):1753–1796 Keynes JM (1923) A tract on monetary reform. Macmillan, London Klein A (2020) China’s digital payments revolution. Brookings Institution, Washington Knapp GF (1905/1924) The state theory of money. Macmillan, London Kocherlakota NR (1998a) Money is memory. Journal of Economic Theory 81(2):232–51 Kocherlakota NR (1998b) The technological role of fiat money. Federal Reserve Bank of Minneapolis Quarterly Review 22(3):2–10 Kumhof M, Noone C (2018) Central bank digital currencies – design principles and balance sheet implications, staff working paper no. 725. Bank of England, London Laidler DEW (1991) The golden age of the quantity theory. Princeton University Press, Princeton Libra Association (2019) An introduction to libra. White Paper. Libra Association, Geneva Libra Association (2020) An introduction to libra. White Paper 2.0. Libra Association, Geneva Luther W (2019) Getting off the ground: the case of bitcoin. Journal of Institutional Economics 15(2):189–205 Luther W, Olson J (2014) Bitcoin is memory. Journal of Prices & Markets 3(3):22–33 Menger C (1892) On the origin of money. Econ J 2(6):239–255 Mises L (1912/1953) Theorie des Geldes und der Umlaufsmittel, Berlin: Duncker & Humblot [quoted from the English translation (with part IV added), The Theory of Money and Credit, New Haven: Yale University Press] Mittermaier K (2018) Menger’s aristotelianism. Camb J Econ 42:577–594 Nakamoto S (2008) Bitcoin: a peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf Panetta F (2018) 21st Century Cash. Central Banking, Technological innovation and digital currencies, In: Gnan E, Masciandaro D (eds.), Do We Need Central Bank Digital Currency? Conference Proceedings 2018/2, SUERF. The European Money and Finance Forum, Vienna, pp 23–32 Peneder M (2012) Firm growth, schumpeterian entrepreneurship and venture capital. In: Cumming DJ (ed) Oxford handbook of entrepreneurial finance. Oxford University Press, Oxford, pp 424–466 Peneder M, Resch A (2015) Schumpeter and venture finance: radical theorist, broke investor and enigmatic teacher. Ind Corp Chang 24(6):1315–1352 Peneder M, Resch A (2021) Schumpeter’s venture money. Oxford University Press, Oxford Peng X (1994) A monetary history of China (translated by Edward H. Kaplan). Western Washington University, Bellingham Pichler P, Summer M, Weber B (2019) Does digitalization require central bank digital currencies for the general public?. OeNB Monetary Policy & The Economy Q4(/19):40–56 Polanyi K (1944) The great transformation. The political and economic origins of our time (reprint of 1957), Beacon Press, Boston Redish A (2016) Monetary systems. In: Cassis Y, Grossman R, Schenk CR (eds) The Oxford handbook of banking and financial history. Oxford, Oxford University Press, pp 321–341 Reserve Bank of India (1998) Payment systems in India, Mumbai (available at: https://m.rbi.org.in//scripts/OccasionalPublications.aspx) Ricardo D (1816) Proposals for an Economical and Secure Currency, John Murray London [quotations from Sraffa P. and Dobb M.H. (eds.), 1951. The Works and Correspondence of David Ricardo, Volume IV, Cambridge University Press / reprint by the Liberty Fund, 43–142] Rochet J-C, Tirole J (2003) Platform competition in two-sided markets. J Eur Econ Assoc 1(4):990–1029 Schumpeter JA (1908) Das Wesen und der Hauptinhalt der theoretischen nationalökonomie. Duncker & Humblot, Berlin Schumpeter JA (Unknown Month 1917) Das Sozialprodukt und die Rechenpfennige. Glossen und Beiträge zur Geldtheorie von Heute, in Archiv für Sozialwissenschaft und Sozialpolitik 44, 627-715 (quoted from the English translation by A.W. Marget ‘Money and the Social Product’, International Economic Papers 6: 148-211) Schumpeter JA (1942/50) Capitalism, socialism and democracy, 3rd edn. Harper & Row, New York Schumpeter JA (1954) History of economic analysis. Oxford University Press, Oxford Schumpeter JA (1970) Das Wesen des Geldes, Göttingen: Vandenhoeck & Ruprecht Segendorf B, Eklööf H, Gustafsson P, Landelius A, Cicovic S (2019) What is Libra? Economic Commentaries No. 9 29 October 2019, Stockholm: Sveriges Riksbank Sveriges Riksbank (2017) The Riksbank’s e-krona Projekt. Report 1, Stockholm: Sveriges Riksbank Sveriges Riksbank (2018) The Riksbank’s e-krona Projekt. Report 2, Stockholm: Sveriges Riksbank Thornton H (1802) An enquiry into the nature and effects of the paper credit of great Britain (edition of 1939 with an Introduction by F.A. v. Hayek), Kelley, New York Tinn K (2019) Distributed ledger technologies and start-up financing. In: Fatás A (ed) The economics of fintech and digital currencies, london: CEPR, pp 15–20 Tobin J (1985) Financial innovation and deregulation in perspective. Bank of Japan Monetary and Economic Studies 3(2):19–29 Tobin J (1987) The case for preserving regulatory distinctions, proceedings of the economic policy symposium, Jackon Hole, Federal Reserve Bank of Kansas City, 167–183 Usher AP (1934) The origins of banking: the primitive bank of deposit, 1200-1600. Econ Hist Rev 4(4):399–428 Usher AP (1943) The early history of deposit banking in Mediterranean Europe. Harvard University Press, Cambridge van de Mierop M (2005) The invention of interest: sumerian loans. In: Goetzmann, Rouwenhorst (eds) The origins of value. Oxford University Press, Oxford, pp 17–30 Viner J (1937) Studies in the theory of international trade. Harper, New York von Glahn R (2005) The origins of paper money in china. In: Goetzmann, Rouwenhorst (eds) The origins of value. Oxford University Press, Oxford, pp 65–90 Weber B (2018) Democratizing money? Debating legitimacy in monetary reform proposals. Cambridge University Press, Cambridge Wieser F (1904) Der Geldwert und seine geschichtlichen veränderungen, Zeitschrift für Volkswirtschaft Sozialpolitik und Verwaltung, XIII, Wien Wieser F (1914/1927) Theorie der gesellschaftlichen Wirtschaft, J.C.B. Tübingen: Mohr (2nd ed. 1924; English translation as Social Economics, New York: Adelphi) Wieser F (1927) “Geld” in handwörterbuch der Staatswissenschaften, 4th ed., Vol. IV, Jena Yang Y, Lockett H (2019) What is China’s digital currency plan? Financial Times, November 25 2019 (https://www.ft.com/content/e3f9c3c2-0aaf-11ea-bb52-34c8d9dc6d84) Yao Q (2018) A systematic framework to understand central bank digital currency. Science China Information Science 61(3):033101