6 ideas
An abstract unit of account (the pound, the dollar) must exist before any object can function as money, because only a shared measure lets different goods and debts be compared at all. The unit of account is therefore a social and political construction, not something that emerges spontaneously from exchange.
Every form of money, coins included, is a transferable claim or credit on an issuer, denominated in a money of account. A coin's value comes from the promise that the issuer will accept it back in settlement of debts such as taxes, not from its metal content. Money is a social relation between creditor and debtor, not a thing with intrinsic value.
The state gives a currency value by naming the unit of account and by declaring what it will accept in payment of taxes and other obligations owed to it. Because everyone subject to the state owes it taxes, the state's own IOUs are in general demand, and that demand makes them the most widely acceptable means of final payment. Monetary sovereignty is thus a matter of political authority, not market choice.
Mainstream economics models money as a neutral medium that eases real exchange but does not change underlying outcomes, so it can be abstracted away. Ingham argues this hides the fact that producing money is a contested process, fought over by states, banks, creditors and debtors, that decides who can command resources. Seeing money as a social relation puts power, conflict and institutions back into monetary analysis.
In late seventeenth-century England, founding the Bank of England in 1694 joined private merchant bills of exchange to the state's sovereign debt. The bank lent to the crown, and its notes, backed by that public debt, circulated as money. This hybrid let private credit be turned into public currency at scale, and Ingham treats it as the institutional core of capitalism, which he defines as a system of elastic credit-money creation.
Monetary claims form a hierarchy ranked by how widely they are accepted as final settlement. State and central bank money sit at the top, bank deposits in the middle, and private IOUs at the bottom. Lower-tier promises are ultimately settled in higher-tier money, so a monetary system stays stable only while the social and political arrangements that link its tiers hold.