In The Theory of Money and Credit, Ludwig von Mises presents a profound economic philosophy about the nature of money and credit, focusing on money’s role as a social medium of exchange and a store of value.
On pages 414–416, Mises emphasizes that money is not a creation of the state but a natural outcome of the market exchange process. Money emerges when a commodity is naturally and widely chosen as a medium of exchange because it is easily accepted and convertible into other goods.
Mises rejects the chartalist theory—that money derives its value from the state issuing it and its acceptance through taxation. Instead, he asserts that money has value because users trust its exchangeability in a free market, not because of state authority.
Moreover, he distinguishes clearly between money and credit. Money is a tangible asset that can be used immediately for transactions, while credit is a promise of future payment—an extension of money but fundamentally different.
In summary, Mises’s philosophy here is:
Money is the product of a spontaneous social process, sustained by collective trust and acceptance in a free market, rather than a tool created or controlled by the state.
Vhtech777
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2025-06-02 15:37:45
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"content": "In The Theory of Money and Credit, Ludwig von Mises presents a profound economic philosophy about the nature of money and credit, focusing on money’s role as a social medium of exchange and a store of value.\n\nOn pages 414–416, Mises emphasizes that money is not a creation of the state but a natural outcome of the market exchange process. Money emerges when a commodity is naturally and widely chosen as a medium of exchange because it is easily accepted and convertible into other goods.\n\nMises rejects the chartalist theory—that money derives its value from the state issuing it and its acceptance through taxation. Instead, he asserts that money has value because users trust its exchangeability in a free market, not because of state authority.\n\nMoreover, he distinguishes clearly between money and credit. Money is a tangible asset that can be used immediately for transactions, while credit is a promise of future payment—an extension of money but fundamentally different.\n\nIn summary, Mises’s philosophy here is:\nMoney is the product of a spontaneous social process, sustained by collective trust and acceptance in a free market, rather than a tool created or controlled by the state.",
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