The f u n c t i o n s o f money taken t o g e t h e r c r e a t e th e c o n d i t i o n s f o r th e e x is te n c e o f chan n e ls o f communication between independent p r i v a t e a g e n ts. T h is i s so because these chan nels - c o n t r a c t u a l r e l a t i o n s - are t r i d im e n sio n a l processes w h ich r e q u i r e som ething t o be used as ( i ) s ta n d a rd o f v a lu e , ( i i ) means o f payment, and ( i i i ) s t o r e o f v a lu e . A c c o r d in g ly , t h e r e i s c o m p le m e n ta rity between th e d i s t i n c t f u n c t i o n s o f money, f o r th e y are i n t e g r a t e d i n t o th e form o f an i n s t i t u t i o n c apa ble o f c o p in g w i t h th e c o m p le x it ie s o f th e c o n t r a c t u a l r e l a t i o n s in c a p i t a l i s t economies. In o t h e r words, i t i s th e c o m p le m e n ta rity between th o se f u n c t i o n s t h a t p r o v id e s th e p ro d u ce rs w i t h codes and r u le s w h ich e na ble them b o th t o e s t a b l i s h and t o d is c h a rg e c o n t r a c t u a l commitments o v e r tim e . Moreover, th e complementary c h a r a c t e r o f th e f u n c t i o n s o f money d e m on strate s th e inadequateness o f a p a r t i a l a n a ly s e s o f money. A lth o u g h th e f u n c t i o n a l d i s t i n c t i o n i s nece ssa ry, each p a r t i c u l a r f u n c t i o n o f money must be i n t e g r a t e d w i t h th e o t h e r s i f money i s t o be u n d erstoo d as a s i n g l e and p u rp o s e fu l i n s t i t u t i o n ;
i . e . as an i n s t i t u t i o n w h ich makes s o c i a l coh e sio n in c a p i t a l i s t economies a p o s s i b l e r e s u l t o f th e s earch f o r p r i v a t e w e a lth .^
For a p o s i t i o n c o n t r a r y t o t h i s v ie w , see Fama (1 9 8 0 ), whose propo sal f o r d e r e g u la t io n o f th e ban king system a ls o in c lu d e s th e p o s s i b i l i t y (and th e d e s i r a b i l i t y ) o f th e com plete s e p a r a tio n o f th e f u n c t i o n s o f money, so t h a t th e in d e te r m in a c y o f monetary systems c o u ld be a vo id e d . Fama ( i b i d . : 55) i l l u s t r a t e s h i s propo sal w i t h a p a ra b le o f an "advanced s o c i e t y " in an " e n lig h te n e d age ", in w hich "te rm s l i k e money, medium o f exchange, means o f payment, and tem p ora ry abode o f p u rc h a s in g power have long ago f a l l e n from i t s v o c a b u la ry , and a l l w r i t t e n accounts o f th e a n c ie n t 'm o n e ta ry a g e ’ were lo ng ago re c y c le d as p a r t o f an e c o lo g y movement". In such a h y p o t h e t i c a l s o c i e t y , a l l t r a n s a c t i o n s would be c a r r i e d o u t th ro u g h an account system o f exchange p r o v id e d by p r i v a t e banks. A ls o , a p h y s ic a l good would be used as n u m e ra ire , f o r th e use o f a m ere ly nominal commodity f o r p e r fo rm in g t h i s f u n c t i o n would r e q u ir e th e r e g u l a t i o n o f th e S ta te and so would in t r o d u c e an element o f i n s t a b i l i t y i n t o th e system.
Besides th e o b s c u ra n tis m d is g u is e d as th e e c o l o g i c a l p r e o c c u p a tio n o f an " e n lig h t e n e d " s o c i e t y t h a t erases i t s h i s t o r y , th e main f la w o f Fama’ s pro p o sa l i s t h a t i t cannot be a p p lie d t o market economies. By denying th e im portance o f th e f u n c t i o n s o f money and p ro p o s in g t h a t
I d e a l l y , a l l f u n c t i o n s s h o u ld be fused i n t o one and th e same a s s e t. The same a s s e t kept as s t o r e o f v a lu e and used t o d is c h a r g e payments s h o u ld be th e s ta n d a rd in terms o f w h ich c o n t r a c t s are e s t a b l is h e d . In t h i s h y p o t h e t i c a l s i t u a t i o n , a l l c o n t r a c t s would be e s t a b l is h e d in terms o f th e n a t io n a l c u r re n c y and d is c h a rg e d th ro u g h th e d e l i v e r y o f th e c o n c re te r e p r e s e n t a t iv e s o f t h a t c u r re n c y (n o te s and c o i n s ) . S i m i l a r l y , those r e p r e s e n t a t iv e s would be kept o v e r tim e as s t o r e o f v a lu e and used as means o f payment whenever nece ssary. I n t h i s way, t h e r e would be no q u e s tio n in g about th e complementary c h a r a c t e r o f th e f u n c t i o n s o f money and i t s r o l e as an i n s t i t u t i o n ; i . e . money would p r o v id e th e p ro d u c e rs w i t h a l l th e in f o r m a t i o n necessary f o r th e o p e r a t io n o f th e p r o d u c t iv e sphere.
I n modern market economies, however, t h i s i s not th e case; in s te a d , many d i s t i n c t a s s e ts are employed t o f u l f i l th e b a s ic f u n c t i o n s o f money. When i t comes t o th e means-of-payment f u n c t i o n , t h e r e are s e v e ra l r e p r e s e n t a t iv e s o f th e n a t io n a l c u r re n c y - o t h e r than notes and c o in s - w hich a re e q u a ll y accepted t o d is c h a rg e c o n t r a c t s (cheques, c r e d i t c a rd s , e t c . ) . S i m i l a r l y , a g r e a t number o f a s s e ts ( e i t h e r f i n a n c i a l o r p h y s i c a l ) a re used as s t o r e o f v a lu e because o f th e l i q u i d i t y assigned t o them ( f i n a n c i a l a s s e ts , f o r e i g n c u r r e n c ie s , g o ld , e t c . ) . In such an e n v iro n m e n t, th e " t h i n g s " w hich p e rfo rm th e f u n c t i o n s o f money must be expected t o be c o n v e rte d i n t o each o t h e r a t s t a b l e and a c c e p ta b le terms t o m a in ta in t h e i r c o m p le m e n ta rity . On th e one hand, th e " t h i n g s " used as s t o r e o f v a lu e must be expe cted t o be exchanged f o r those w h ich a c t as means o f payment in terms c o m p a tib le w i t h th e p r o d u c e r 's f u t u r e needs f o r p u rc h a s in g power.
exchange r e l a t i o n s sho u ld be c a r r i e d o u t th ro u g h an account system w hich uses a p h y s ic a l good as s ta n d a rd o f v a lu e ( i . e . by denying th e complementary c h a r a c t e r o f th e f u n c t i o n s o f money), Fama s im u lta n e o u s ly d e n ie s any c e n t r a l r o l e t o be pla ye d by money as an i n s t i t u t i o n . I t may even be t h a t f u t u r e s o c i e t i e s w i l l not be monetary ones, but then th e y w i l l not be m arket economies e i t h e r .
a c c o r d in g t o h i s e x p e c ta t io n s a t th e moment c o n t r a c t s a re e s t a b l is h e d . On th e o t h e r hand, th e " t h i n g s " w h ich are supposed t o s e rv e as means o f payment must be expected t o be r e f e r r e d t o th e s ta n d a rd o f v a lu e i n s t a b l e and known terms i f th e y are t o be accepted as c o n c r e te r e p r e s e n t a t iv e s o f t h a t s ta n d a r d . That i s , th e d e l i v e r y o f a s o c i a l l y accepted means o f payment must be expected t o t r a n s f e r , in d e f i n i t e te rm s, th e w e a lth w h ich i s prom ised t o be t r a n s f e r r e d in monetary c o n t r a c t s .
I f th e r e e x i s t s w idespread c o n fid e n c e i n th e s t a b i l i t y o f ( i ) th e p rocess o f c o n v e r t i b i l i t y between th e a s s e ts used as s t o r e o f v a lu e and those accepted as means o f payment and ( i i ) th e r e l a t i o n o f r e p r e s e n t a t iv e n e s s between th e l a t t e r a s s e ts and th e s o c i a l l y accepted s ta n d a rd o f v a lu e , one can a f f i r m t h a t t h e r e i s u n i t y o f th e f u n c t i o n s o f money. And th e s t r o n g e r th e c o n fid e n c e , th e s t r o n g e r th e u n i t y . Thus, th e u n i t y o f th e f u n c t i o n s o f money i s b eing proposed as an e x - a n t e concept w hich r e f e r s t o th e b e l i e f each i n d i v i d u a l p ro d u ce r possesses in th e a b i l i t y t o employ th e d i f f e r e n t in s tr u m e n ts w h ich p e rfo rm th e f u n c t i o n s o f money as a s i n g l e i n s t i t u t i o n . A c c o r d i n g l y , th e m aintenance o f th e