Evaluating Stephen Zarlenga's Treatment of Historical Monetary Thought

Mainstream monetary theory has been subject to critiques from heterodox economists from the post-Keynesian and Marxist traditions yet, the monetary reform movement has been critical of political economists from all traditions for failing to identify the private issue of money as the central problem. In the United Kingdom, for instance, credit monies emanating from private banks constitute 97Shakespeare 2002). This paper reviews elements of the classically-derived mainstream view, and its critics, and evaluates the claims of monetary reformers. Stephen Zarlenga, for instance, in his historical study of the political economy of money, suggests that the (unnecessary) acceptance of the private creation of money precludes the possibility of a state-sanctioned ?money of account? (Zarlenga 2002).This cartalist notion of state-money, (perhaps mistakenly) citing Aristotelian origin, is seen as indispensable for effective monetary reform today. It is proposed that money is issued and established by law that is deliberately intended to exceed its intrinsic value, when functioning as a measure of commodities. Yet, this paper argues that these reformist ideas have been unfair in their historical treatment of Marx, Smith and Keynes, who had more sophisticated ideas on monetary matters than is credited. Notwithstanding, Zarlenga?s (et al) work serves to illuminate an interesting arena for future research.