Menger's ideas about the origins of #money are based on the key idea that money emerged through centuries-long processes within a market #economy, the result of countless decisions by #market participants seeking the most efficient means to achieve their personal goals. Monetary exchange developed as an unintended but necessary byproduct of the actions undertaken by individuals in pursuit of their immediate goals, and yet, over time, it formed a coherent and stable system because these actions promised each individual greater success in achieving their goals. Thus, the institution of money was not consciously devised to solve a specific problem, just as the mechanism of monetary exchange was not created with the goal of achieving specific macrostatistical aggregates.
In light of Menger's explanation of the origins of money, the answer to the question of how to devise and implement good money becomes clear.
The money that the market adopts is precisely the money that best fulfills the socially coordinating function of a universal medium of exchange. It is the product of natural selection by the market—a process that takes into account the experience and knowledge of literally millions of people.
To argue that the money chosen by the market can and should be improved is to heroically assume that countless participants in transactions have consistently and repeatedly misjudged the relative benefits and costs inherent in alternative media of exchange.
Moreover, as Menger notes, the recurring formation of market prices is analogous to the emergence of money in that both are the result of the anonymous efforts of countless individuals who comprise the market process.
If, therefore, the market process can be relied upon to determine the "correct" and generally accepted prices for an almost infinite variety of goods, then we can certainly be confident that the same process will help us to find and introduce the "correct" medium of exchange, and then to continually and intelligently adjust this institution in accordance with changing economic conditions.
#bitcoin
In light of Menger's explanation of the origins of money, the answer to the question of how to devise and implement good money becomes clear.
The money that the market adopts is precisely the money that best fulfills the socially coordinating function of a universal medium of exchange. It is the product of natural selection by the market—a process that takes into account the experience and knowledge of literally millions of people.
To argue that the money chosen by the market can and should be improved is to heroically assume that countless participants in transactions have consistently and repeatedly misjudged the relative benefits and costs inherent in alternative media of exchange.
Moreover, as Menger notes, the recurring formation of market prices is analogous to the emergence of money in that both are the result of the anonymous efforts of countless individuals who comprise the market process.
If, therefore, the market process can be relied upon to determine the "correct" and generally accepted prices for an almost infinite variety of goods, then we can certainly be confident that the same process will help us to find and introduce the "correct" medium of exchange, and then to continually and intelligently adjust this institution in accordance with changing economic conditions.
#bitcoin
