Skidelsky on Keynesian Uncertainty

This is a nice summary by Robert Skidelsky of the concept of uncertainty in Keynes’ thought.



I would add that the interested reader can go straight to Keynes’ important 1937 article where he emphasised the concept of uncertainty and its implications for economics:

Keynes, “The General Theory of Employment,” Quarterly Journal of Economics 51 (1937): 209–223.

The crucial passage is here:

“By ‘uncertain’ knowledge, let me explain, I do not mean merely to distinguish what is known for certain from what is only probable. The game of roulette is not subject, in this sense, to uncertainty; nor is the prospect of a Victory bond being drawn. Or, again, the expectation of life is only slightly uncertain. Even the weather is only moderately uncertain. The sense in which I am using the term is that in which the prospect of a European war is uncertain, or the price of copper and the rate of interest twenty years hence, or the obsolescence of a new invention, or the position of private wealthowners in the social system in 1970. About these matters there is no scientific basis on which to form any calculable probability whatever” (Keynes 1937: 213–214).

The Origin of Coinage in Ancient Greece

A short post. I note that someone has brought up the issue of the origin of money in comments on an earlier post. I will say that the specialist literature on the origin of coinage in the ancient Greco-Roman world confirms the chartalist theory of the origin of money:

“Numismatists believe that the earliest coins were produced at Lydia (now Western Turkey) in the mid-seventh century BC. The coins were made of electrum, a naturally occurring alloy of gold and silver. They had a design on one side and were of uniform weight but had a highly variable proportion of gold. In an influential article Cook (1958) argued that these coins were introduced to pay mercenaries, a thesis modified by Kraay (1964) who suggested that governments minted coins to pay mercenaries only in order to create a medium for the payment of taxes …”

Redish (1992), quoted in C. A. E. Goodhart, “Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas,” in S. A. Bell and E. J. Nell (eds), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money, Edward Elgar, Cheltenham. p. 7.

One can also read the interesting review article by Peacock (2006), who concludes:

“the state’s role in the development of coinage is undisputed … Coinage was not an endogenous development of the economic sphere, as Menger held, nor was it created merely in order to facilitate trade which had existed thousands of years before money and was in no need of facilitation” (Peacock 2006: 642).

The reason that coinage became a widely-accepted medium of exchange and unit of account was that the state demanded its issued coin back for payment of taxes and other payments to the state, such as harbour dues and fines. This process is what monetized the economy and encouraged the use of coinage as a medium of exchange.


BIBLIOGRAPHY

Cook, R.M. 1958. “Speculation on the Origins of Coinage,” Historia 7: 257–262.

Goodhart, C. A. E. 2003. “Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas,” in S. A. Bell and E. J. Nell (eds), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money, Edward Elgar, Cheltenham. 1–25.

Kraay, C. M. 1964. “Hoards, Small Change and the Origin of Coinage,” Journal of Hellenic Studies 84: 76–91.

Peacock, M. S. 2006. “The Origins of Money in Ancient Greece: The Political Economy of Coinage and Exchange,” Cambridge Journal of Economics 30: 637–650.

Redish, A. 1992. “Coinage, development of,” in P. Newman, M. Milgate and J. Eatwell (eds), The New Palgrave Dictionary of Money and Finance, vol. 1, Macmillan, Basingstoke. 376–378.


FURTHER BIBLIOGRAPHY
For anyone interested in this subject, here is a longer list of the specialist literature.

Bresson, A. 2005. “Coinage and money supply in the Hellenistic Age,” in Z. H. Archibald, J. K. Davies and V. Gabrielsen (eds), Making, Moving and Managing. The New World of Ancient Economies, 323– 31 BC, Oxbow Books, Oxford. 44–72.

Cook, R.M. 1958. “Speculation on the Origins of Coinage,” Historia 7: 257–262.

Figueira, T. J. 2006. Review of Seaford 2004. Classical World 99.4: 467–468.

Goodhart, C. A. E. 2003. “Two Concepts of Money: Implications for the Analysis of Optimal Currency Areas,” in S. A. Bell and E. J. Nell (eds), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money, Edward Elgar, Cheltenham. 1–25.

Henry, J. 2004. “The Social Origins of Money,” in L. R. Wray (ed.), Credit and State Theories of Money, Edward Elgar, Cheltenham. 79–98.

Hudson, M. 2003. “The Creditary/Monetarist Debate in Historical Perspective,” in S. A. Bell and E. J. Nell (eds), The State, the Market, and the Euro: Chartalism versus Metallism in the Theory of Money, Edward Elgar, Cheltenham. 39–76.

Hudson, A. M. 2004. “The Archaeology of Money,” in L. R. Wray (ed.), Credit and State Theories of Money, Edward Elgar, Cheltenham. 99–127

Ingham, G. 2000. “‘Babylonian Madness’: on the Historical and Sociological Origins of Money,” in J. Smithin (ed.), What is Money?, Routledge, London and New York. 16–41.

Kraay, C. M. 1964. “Hoards, Small Change and the Origin of Coinage,” Journal of Hellenic Studies 84: 76–91.

Oliver, G. 2006. “Coinage,” in N. G. Wilson (ed.), Encyclopedia of Ancient Greece, Routledge, New York and London. 174–176.

Peacock, M. S. 2006. “The Origins of Money in Ancient Greece: The Political Economy of Coinage and Exchange,” Cambridge Journal of Economics 30: 637–650.

Seaford, R. 2004. Money and the Early Greek Mind: Homer, Philosophy, Tragedy, Cambridge University Press, Cambridge.

Schaps, D. M. 2007. Review of Seaford 2004. Classical Review n.s. 57: 10–12.

Schaps, D. M. 2003. Review of Georges Le Rider, La naissance de la monnaie: Pratiques monétaires de l’Orient ancient (Presses Universitaires de France, Paris, 2001), Bryn Mawr Classical Review 2003.12.13, http://bmcr.brynmawr.edu/2003/2003-12-13.html

Schaps, D. M. 2004. The Invention of Coinage and the Monetization of Ancient Greece, University of Michigan Press, Ann Arbor.

von Reden, S. 2002. “Money in the ancient economy: A survey of recent research,” Klio 84.1: 141–174.

Wray, L. R. 1998. Understanding Modern Money: The Key to Full Employment and Price Stability, Edward Elgar, Cheltenham, 1998.

Wray, L. R. 2003. “Money,” in J. E. King (ed.), The Elgar Companion to Post Keynesian Economics, Edward Elgar, Cheltenham, UK and Northhampton, MA, USA. 261–265.