Essay On Chartalism

Chartalism vs. Menger Comparison Money in Economics is typically defined as a primary medium of exchange or a mean of exchange; it allows a person to trade something of his own for something he wants. “The ideal money typically has three characteristics: it acts as a medium of exchange, it is an economic good, and it is a means of economic calculation.”(1) Money is anything of value that serves as an accepted medium of financial exchange. It is considered a legal tender for the repayment of debt, has a standard of value, unit of accounting measure, and is a means to save or store purchasing power. Therefore, any form of money is more dynamic and valuable when it is portable, Uniform, Divisible, and Durable. I will be discussing two different

Money here is shown to have developed from early state structures, including those from tribal traditions of making gifts and contributions. Interestingly, there is also evidence from ancient Mesopotamia of the practice of lending goods in exchange for interest. The emergence of trade and markets became tied to the state household of kings, a high priest, or warlords. This information tells us that markets do not develop from a constitutional vacuum free of state powers. In fact, Markets must build and rest upon a state legal structure which includes the monetary system. Graeber says, “States created markets, markets require states. Neither could continue without the other. In fact, we are told they are opposites, but it’s a false dichotomy.”(3)

After all, both the views of Chartalism and Menger show that the currency had to be widely accepted to be valuable and beneficial to the economy as money. However, the main difference is that Chartalism believes a government entity created it, while Menger presumes people established it as a more logical method for the exchange of goods to replace the barter system which was more difficult because the two parties had to agree to exchange for something they both