Abstract

Standard general equilibrium models of economic exchange have historically had a difficult time incorporating money and monetary phenomena, mostly because they assume away problems of both the passage of historical time and the tacit nature of knowledge. That economists still rely on such methods and apply the results to questions of policy seems problematic. This study is an attempt to look at many of these same questions from a different theoretical perspective. Starting with the theory of the origin of money offered by Carl Menger in 1892, this study explores an evolutionary approach to monetary phenomena and extends and applies that analysis to monetary institutions, monetary history, and to debates over the role of such phenomena under capitalism and socialism. ;By starting from a more interpretive philosophical framework, specifically by drawing an analogy between an interpretive theory of language and an evolutionary theory of money, the study attempts to resolve the friction between the economic theory of money and money's role in the real world. The study concludes that the problems with both neoclassical and Marxian theories of money result from their being rooted in an Enlightenment view of knowledge and rationality. With a different philosophical approach, many of these difficulties disappear and the benefits of a freely evolving monetary order can be appreciated