DEBT AS THE BASIS OF CURRENCY - THE MONETARY-ECONOMICS OF TRUST

Even more than most nineteenth-century economists, Henry Dunning Macle od recognized the importance of trust in a properly functioning moneta ry system. Macleod developed a credit theory of money in which he argu ed that money originated as a debt claim against society. The value of money depends on the willingness of economic agents to accept it, no matter what material the money is made of. Macleod applied this theory to the evaluation of other systems in which money is not based on deb t, showing the dangerous consequences that could arise from pursuing o ther theories of money creation to their logical conclusions.