The Modern Period

The monetary systems of Europe and America in that period were still primarily based on precious metal, both in terms of the material out of which coins were made and the standard of value for all banknotes. Towards the end of the twentieth century, by contrast, physical currency was no longer required for many monetary transactions, which could be carried out purely by means of accounting procedures using cheques, credit and debit cards, etc. and recently developed electronic and computer technology. Analogous monetary instruments allowing the use of coined money to be bypassed have of course existed in previous centuries. Bills of exchange, for example, have been mentioned at various points in the course of this book. But such developments in the pre-modern period generally involved the expectation that, in extremis, debts could always be called in as hard cash -gold and silver - for which bills were only a convenient and occasional substitute.

In the pre-modern period of Western history, then, money as a concept remained firmly rooted in the material of gold and silver. Gold and silver are no longer the prime symbols of money or exchange value, and neither cash nor credit cards are conceived of as substitutes for specific amounts of precious metal. British banknotes still bear the words 'I promise to pay the bearer on demand the sum of [...] pounds' (i.e. in gold) but this legend is a mere antiquarian survival, the historical significance of which is mostly lost on the British themselves. The source of the value of money, then, has changed radically over the last two hundred years. In the process, money has become much more flexible and, perhaps, more manageable, but this profound development has not occurred without considerable theoretical debate and a certain amount of catastrophe.

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