Classical Chinese Monetary Theory

As in the Mediterranean world, coinage of metallic money in China dates back to ca. 600 BCE. But in contrast to the precious metal coinages that prevailed in much of the world in premodern times, the Chinese monetary system from its origins and throughout most of the imperial era was based on bronze currencies. Given the differences in monetary standards, the philosophy of money in China diverged radically from Western traditions rooted in the writings of ancient Greek philosophers. Bronze coin typically circulated as a fiduciary currency whose value was determined by demand for it in market exchange and state payments. Moreover, instead of the theories of money premised on the priority of money as a means of exchange that predominated in Greek and much of later Western thought, Chinese monetary philosophy hewed to the principles of theoretical cartalism: money is an arbitrary creation of the community or state whose value is fixed by convention or legislation rather than its intrinsic commodity value. The period from 400 BCE to 100 CE witnessed the flowering of philosophical debate over the origins, history, nature, and purpose of money that laid the foundations for the canonical traditions of Chinese monetary thought.