Money, the Market, Knowledge, and Rules

Flavio FELICE

University of Molise, Campobasso , Italy

Enzo DI NUOSCIO

University of Molise, Campobasso , Italy

Abstract

The article intends to present the notion of money in the context of market economy. The theoretical reference of the analyses are, on the one hand, the ‘historical-genetic’ approach developed by Carl Menger and, on the other hand, the way this approach has been adopted by the German ordoliberalism and the social market economy. In this regard, the authors analyze Menger’s historical-genetic reconstruction of money to show how the interpretation of social phenomena principally concerns human action and how interactions give rise to unintended consequences. In this specific theoretical context, the article presents a political and economic model known as ordoliberalism, as well as its evolution, after World War II, in the form of social market economy. In this connection, the authors have underlined three prerequisites for a healthy currency to ensure steady and lasting economic development: unification of the monetary system, stability in the value of money, and freedom to use the money. Those prerequisites are considered necessary by the theoreticians of social market economy and have also been inherited by the interpreters of the European unification process. Since money is the backbone of market economy and a powerful cognitive tool enhancing an individual’s ability to act, it increases the problem solving capacity of a social group. In conclusion, money, like language, is not just a simple means to an end, because “having a language” means, according to Hans Georg Gadamer, “having a world.”

Keywords:

ordoliberalism, social market economy, Carl Menger, unification of the monetary system, stability in the value of money, freedom to use the money