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Commons Futurity pg. 483-486

 Today, we move on to section IV of the Futurity chapter  and the scarcity of debt.

IV. Scarcity of Debt and 1. Scarcity of metallic money

Commons starts this section with a discussion of Dave Hume and how he helped divide economics between commodity economists and monetary economists. Hume made a distinction between the stability of the metallic money supply and the change in the money supply.  However, economists did not have the tools to deal with this issue. They transferred labor as in the labor theory of value for their measure of economic value. This was a major problem as it mistook efficiency for scarcity. Hume was actually arguing to address the issue of mercantilism and the idea that a country could only succeed by hoarding gold and silver. Hume disagreed with this analysis and wanted to show why it was wrong. The ultimate concluding aprt of this section is that Hume’s argument, ultimately led to a very long 19th century debate between economists over whether money was a real or nominal factor in changing economic conditions.



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