Monetary surrogates and money’s dual nature

One of the many fruitful notions of Geoffrey Ingham's The Nature of Money is that of "monetary space". "Monetary space" is defined by money of account in terms of which debts are contracted and discharged and all transactions are conducted. [M]onetary space is the site, or field, of potential transactions that may be conducted under specific monetary conditions that is to say, monetary space is sovereign space. (Ingham 2004, p. 71) Sometimes, as this chapter will recount, monetary space is invaded by "monetary surrogates". Recent examples include the debt-offsets and so-called bills of exchange prevalent in Russia in the 1990s (Woodruff 1999b), and the bonds (bonos) issued by various levels of Argentina's government in the period leading up to the collapse of the peso-dollar peg in late 2001 (Woodruff 2005). The term "surrogates" appropriately designates these alternatives to official money, as they were denominated in the official currency (roubles or pesos) and offered in payments of debts denominated in the official currency. In both instances, as well, many of these monetary surrogates originated outside the influence of the national government, and they represented therefore a serious challenge to national monetary sovereignty. In neither instance can there be any question of a hyperinflationary "flight from money" giving rise to surrogates: Argentina was experiencing outright deflation, and Russia's inflation rate was far below hyperinflationary levels, and generally falling as monetary surrogates were spreading.