Synthesizing state and spontaneous order theories of money

Alexander W. Salter, William J. Luther

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


What role does government play in determining the medium of exchange? Economists weighing in on the issue have typically espoused one of two views. State theorists credit government with the emergence and continued acceptance of commonly accepted media of exchange. In contrast, spontaneous order theorists find little need for government, maintaining that money emerges and continues to circulate as a result of a decentralized market process. History suggests a more subtle theory is required. We provide a generalized theory of the emergence and perpetuation of money, informed by both approaches and consistent with recent theoretical and empirical advances in the literature.

Original languageEnglish
Pages (from-to)161-178
Number of pages18
JournalAdvances in Austrian Economics
StatePublished - 2014


  • Chartalism
  • Medium of exchange
  • Menger
  • Search
  • Spontaneous order
  • Unit of account


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