Cambridge Journal of Economics 2017, 1 of 14

doi:10.1093/cje/bex070

A critique of Lawson’s ‘Social positioning

and the nature of money’
Geoffrey Ingham*

This article challenges Tony Lawson’s claim ( Lawson, 2016) that his ontology of
money as the ‘social positioning’ of ‘prior value’ is more sustainable than prominent
existing theories and is able therefore to reconcile their putative incompatibility.

Key words: Commodity, Credit, Economics, Methodenstreit, Money, Social ontology,

Sociology

1. Introduction
‘Strictly speaking, of course, there are no such things as pounds, euros and dollars;
these are mere abstract accounting units and money itself, or the material of money,
I  am suggesting, is always rather more concrete (if not always observable) thing or
stuff.’ (Lawson, 2016, p. 984)
‘The eye has never seen, nor the hand touched a dollar. All that we can touch or see
is a promise to pay or satisfy a debt due for an amount called a dollar [which is] intan-
gible, immaterial, abstract.’ (Mitchell Innes, p. 159)

Tony Lawson has recently advanced the bold claim that his ontology of ‘social posi-
tioning’ can resolve an antinomy in the theory of money that has endured since the
Methodenstreit in the social sciences during the early twentieth century.1 Does money
have to be something that already has—in Lawson’s terms—‘prior’, or ‘intrinsic’,
value; or, is it a ‘credit’, or ‘token’, whose denominated value as a prospective means
for settling debt is constituted entirely by its social construction and acceptance? The
dispute was acrimonious because the distinction between money as an exchangeable
commodity and as a token means of payment of debts expressed a deeper opposition
between two quite different social ontologies—the real bone of contention. Unlike
Lawson, I agree with Schumpeter’s opinion at the time that the two theories of money
were by their very nature incompatible (Schumpeter, [1917] 1956, p. 649).

Manuscript received 28 October 2016; final version received 25 April 2017.

Address for correspondence: Geoffrey Ingham, Christ’s College, Cambridge, CB2 3BU, UK; email: gki1000@
cam.ac.uk.
*Christ’s College, University of Cambridge.
1
 The antinomy is much older and probably originated at the same time that forms of money were
first used. See Schumpeter ([1954] 1994, pp.  51–71) and Peacock (2006, 2013); see von Glahn (1996,
pp. 23–47) for an account of the two theories in Chinese monetary thought in the second century BCE. See
Ellis (1934) for a detailed account of the debate during and immediately after the Methodenstreit.

© The Author 2017. Published by Oxford University Press on behalf of the Cambridge Political Economy Society.
All rights reserved.

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 Page 2 of 14  G. Ingham
For Lawson, money must be based on something that has ‘prior’ value and, as both
material commodities (commodity-exchange theory) and debt (credit theory) have
such a value, they can be ‘socially positioned’ as money. Therefore, the two theories
‘are both reconcilable, being merely different instances of a general conception, onto-
logically derived’ (p. 963). Despite the thorough and extensive scholarship, I am not
convinced by Lawson’s endeavour. I  will argue that it contains a number of closely
related difficulties which result from attempting to locate money ontologically in the
‘social positioning’ of ‘prior’ value. These are briefly listed below and elaborated in a
subsequent discussion of my understanding of the two theories which, in turn, is fol-
lowed by a closer examination of Lawson’s account.
First, it is not clear in what sense something is considered to have a ‘prior’ value
and how this is actually assigned. Whilst explicitly acknowledging the importance of
historical analysis, Lawson is primarily concerned with ontology (Lawson, 2016, pp.
962, 964). I assume, therefore, that ‘prior’ is intended to mean logically anterior rather
than historically prior in the sense, for example, that early coinage consisted of precious
metal. My critique is based on the understanding that he attempts to establish concep-
tually that all money is founded on an anterior value.
The details of Lawson’s argument will be examined later; but it should be noted
that I cannot see how money as an anterior value can be securely established ontologi-
cally without recourse to a non-monetary theory of value. In monetary theory, these
are ‘substance’ theories (see Orléan, 2014): Mengerian commodity-exchange theory;
Marxian labour theory of value; and neoclassical economics’ utility theory all locate
money in a value that already exists in some sense anterior to its denomination as
money by a unit (money) of account. (Consequently, these theories are able to con-
sider money to be a ‘neutral’ component of an economic system in which the ‘real’
values can be analysed with the arbitrary addition of a numeraire. See also note 16.)
From a strictly ontological standpoint, however, it is patently not true that money
is, at all times and in all places (the test of ontological explanation), based on a ‘prior’
value that is itself not already monetary—i.e., denominated in a money of account.
This is precisely the force of Menger’s conundrum of ‘worthless tokens’ and of the
puzzle of ‘valueless’ fiat money which has exercised successive generations of neoclas-
sical economists. Therefore, unless some kind of ‘substance’ theory of anterior value
is implied, I would contend that Lawson’s central argument that money is a socially
positioned ‘prior’ value can only be historical. Furthermore, although it is possible, if
mistaken, to conceptualise anterior value in terms of commodities, labour-time, or
utility, I will argue that it is even less plausible to consider debt in this way. In short,
Lawson’s failure to specify ontologically the nature of ‘prior’ value implies a tautology:
money is that which is ‘socially positioned’ as money.
Second, by looking for ‘prior’ value and paying a good deal of attention to the ‘stuff
[and] material’ of ‘money itself’ (p. 984), Lawson fails to acknowledge the full impli-
cation of the fact that credit theories are nominalist theories. In effect, the proposed
reconciliation is between Lawson’s particular reading of credit theory and the standard
interpretation of commodity theory which, as he acknowledges, fits more comfortably
with his ‘social positioning’ methodology.
It is a constitutive tenet of credit theory that the ability of ‘things’ to bear or trans-
mit monetary value is constituted entirely by their denomination in a unit (money) of
account (see Ellis [1934] for a comparison of early twentieth-century German nomi-
nalist and materialist commodity theories). In this conception, the myriad means of

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transmission—coins, notes, cards, electronic impulses, etc.—are of secondary impor-
tance. Regardless of the form of transmission, the power of monetary value derives
from the capacity to settle debts that are denominated in the same unit of account.
Contrary to Lawson’s assertion in the epigraph cited above, moneys of account are not
‘mere abstract accounting devices’ for measuring ‘money itself’ (p. 984); rather, they
assign the nominal value without which ‘money itself’ cannot exist.
I shall argue that from an ontological standpoint, and contrary to the commodity-
exchange theory, money of account is not merely a number that is applied to pre-
existing (‘prior’) value (see also note 16). Rather, money of account is the means by
which the forms for the transmission of monetary value are constructed sui generis as
prospective virtual value that did not previously exist. These are the tokens or credits
by which the values of commodities and debts are actualised as prices by the users
of money in their bids and offers and loans and settlements. Historically, as we shall
see, things with recognised value—utility or sacredness—were used to construct mon-
eys of account. Furthermore, for some considerable time past, material with intrinsic
value comprised some—but by no means all—of the money things that transmitted
the money of account’s denominated value—most obviously, precious metal coinage.
Third, in a further consequence of assessing credit theory through his ‘social posi-
tioning’ lens, Lawson appears to have been drawn towards the logic of the commodity-
exchange theory in his focus on exchangeable material money things—especially cash.
As I understand it, ‘social positioning’, at a most basic level, is similar to a sociological
explanation of phenomena in terms of their relationships with other phenomena in
the system of which they form a part. However, unlike Lawson, I consider that there
is a difference between the position of material objects in material systems and those
of social roles and relations in social systems comprising, among other elements, sym-
bolic representations. As Lawson avers, the ‘positions’ of students and lecturers are
explicable terms of their systemic role interaction. But, as we shall see, I do not think
that this is of the same order of reality as the functional relationships between mate-
rial elements in a physical system—as in Lawson’s example of the ‘positioning’ of the
physical properties of glass to function as windows in houses (p. 964; see also note 21).
Subsuming material and social properties under the same rubric leads to the mis-
leading incorporation of elements of commodity-exchange theory’s ontology into his
analysis; for example, inter alia, citing the portability and durability of precious metal
coins and cash as functional prerequisites for the ‘social positioning’ of their putative
‘prior’ value (p. 980). I will suggest that this focus also produces what is to my mind
a confusing analysis of the position of coins and cash in the credit theory of money.
Lawson’s explicit concern with the ‘material’ and ‘concrete’ things that are handed over
in exchange diverts his attention from what I consider to be money’s specific nature
as an emergent property constituted by the social construction of abstract, or virtual,
value denominated in a money of account. In this regard, as we shall see, it is pivotally
important to understand the force of the distinction between medium of exchange and
means of payment that was so important in the debates during the Methodenstreit.
Starting from a conception of ‘social positioning’ which does not discriminate clearly
between material and social phenomena inhibits an appreciation that the two theories
profess distinct and incompatible ontologies of value in general and in its monetary
incarnation. Fundamentally, Lawson does not confront the nominalist import of the
credit theory of money. Borrowing his terminology, I would argue that money is not a
matter of the ‘social positioning’ of ‘prior’ value; rather, it involves a social process in

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 Page 4 of 14  G. Ingham
which the ‘positioning’ creates the abstract value which, in turn, is used to actualise the
value, as money price, of goods and debt.
As the basis for the more detailed critical examination of Lawson’s reconciliation
in Section 3, I shall first expand on these underlying ontological differences between
the commodity-exchange and credit theories and reiterate why I consider the latter to
be superior.2 In short, I am not persuaded by his view that as the two theories have
persisted for so long, there must be something in both of them (Lawson, 2016, p. 963).

2.  The two theories’ ontologies

Carl Menger was sorely exercised by the proponents of the credit or token theory in
the Historical School.3 He was adamant that money had spontaneously emerged as the
most tradable commodity in barter, and as such it was nothing more than a medium of
exchange—that is, something handed in exchange for something else. In this ontology,
money is merely a special commodity that can be exchanged for all others (Clower,
[1967] 1984). Its ‘logical origins’ can be deduced from its reduction of the rational
agent’s transaction costs and maximization of exchange opportunities. Media of
exchange, emerging from barter, came be used to cancel debts at a later stage, but this
was theoretically incidental. Moreover, as money’s historical origins were, in Keynes’s
whimsically phrase, lost in the mists of a climatically benign period of prehistory, the
economic theorists contended that a conceptual, or logical-deductive, methodology
was the only one available.
Some of the historians and sociologists in the dispute were not simply searching
for the historical origins, but also advanced what became the basis for nominalist and
credit theories (Ellis, 1934). As I have indicated, these held that money’s specific prop-
erty as a denominator of nominal value (unit/money of account) enabled the construc-
tion of price-lists and, most importantly, debt contracts which could be settled with
whatever was accepted as the credit token transmitting or bearing the same nominal
value.4
After his exposure to the Historical School and his own investigation of money in the
ancient Near Eastern societies, Keynes agreed (Keynes, 2013, pp. 223–94), dismiss-
ing the commodity-exchange theories of money in the opening sentence of A Treatise
on Money—‘money of account, namely that in which debts and prices and general
purchasing power is expressed is the primary concept of the theory of money’ (Keynes,
1930, p. 3, emphasis in original; see Ingham, 2000).5 Moreover, ‘money proper in the
full sense of the term can only exist in relation to a money of account [which] is the
description or title of money and the money is the thing which answers the descrip-
tion’ (p. 3). Keynes saw the significance of the fact that Babylon, two millennia before
coinage, had a money of account for budgeting and debt contracts, but no circulating
material means of payment. Following Knapp, Keynes contended that states write and

2
  I shall not deal with Lawson’s discussions of Keynes, Marx and Mitchell Innes, which are presented in
such a way as to support his ontology of ‘social positioning’. Needless to say, these differ in some respects
from my own interpretations.
3
 See Ellis (1934).
4
 The question of the social conception of value that could have provided the analogue for the monetary
measure cannot be pursued here. See Ingham (2004, pp. 90–93); and the most thorough analysis in Peacock
(2013, ch. 4 and 5).
5
 See Ingham (2000) on Keynes’s ‘Babylonian Madness’.

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edit the monetary ‘dictionary’ by declaring the description (money of account) and
that which answers the description (p. 4).6 It is of the utmost importance to under-
stand that only if the thing answers the description does it have the power to purchase
and to settle debt that is denominated in the same way.7 In a comment aimed at the
Mengerian theory, Keynes contrasts money in this full sense with ‘a convenient medium
of exchange’ that may be used on the spot—‘but if this is all we have scarcely emerged
from the stage of barter’ (p. 3).
Following this distinction, I have referred to debt denomination and debt settling
power as ‘moneyness’, as opposed to ‘tradability’ (Ingham, 2004, 2012, 2016). Money’s
value is ontologically grounded in its debt settling and purchasing power not from any
pre-existing tradable—but unspecified—value. Money’s power of objectively (inter-
subjective) given ‘valuableness’ derives from the existence of a socially constructed
monetary space delineated by the common unit of account by which all prices and
debts are denominated.8 Money is a credit in the sense that there exist actual and poten-
tial debts, denominated in precisely the same way, awaiting cancellation.9 If this ceases
to be the case, then money loses its power.10 This is an emergent social property in
which particular social arrangements confer attributes which are qualitatively different
from the mere tradability of commodities, based on any ‘substance’ value or utility.11
A fundamentally important consequence of this qualitative difference is that money,
identified by money of account, is divisible and, unlike tradable commodities with var-
ying exchange ratios, can become a sound basis for economic calculation.12 As we shall
see, the fundamental question for an ontology of money—regardless of the adequacy
of historical evidence—is whether a money of account could possibly emerge from the
mere tradability of things. Of course, people might be persuaded to hold money in the
form of a valuable commodity, as a hedge, if they were uncertain about its purchasing
and debt settling powers. However, this is an empirical/historical, not an ontological/
conceptual, question and is quite distinct from the enterprise that Lawson explicitly
pursues.
The relevance of the distinction between money as a nominal value and a trad-
able commodity and the different ontologies on which the two are based has been
almost completely lost to latter-day social science. This is a consequence of a concep-
tion of money which was adopted explicitly to evade the significance of the distinction
between media of exchange and means of payment and the different conceptions of the
nature of money in the underlying methodological dispute which had produced them.

6
  Keynes understood that the state theory of money should not be taken literally. He referred to the state
or community and the force of law or custom—i.e., authority—in declaring the unit of account and means
of settlement for contracts.
7
  Lawson believes that Keynes’s ‘conception fits easily with the one I am defending’ (2016, p. 983), but
nonetheless pursues his concern with the ‘material’ and ‘concrete’ nature of money.
8
 See Knapp’s ([1924] 1973) distinction between ‘valuableness’ and realised monetary ‘value’.
9
  For Hicks, all three typical monetary transactions—payment in advance; deferred payment; payment on
the spot—are debt contracts (Hicks, 1989, p. 41).
10
  It is significant that units of account often continue to denominate debt contracts even when the extant
form of money has been rejected in favour of payment in kind. For example, see Woodruff ’s (2013) account
of Russia in the 1990s.
11
 See Orléan (2014) for a critique of the theory of ‘substance value’ in economics.
12
  It has been argued that the inability to impose a uniform unit of account and the persistence of payment
in kind impeded capitalism development in China (Weber, 1951, p. 3; Ingham, 2015).

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 Page 6 of 14  G. Ingham
In the early twentieth century, the American economist Walker put aside what he saw
as this metaphysical question of the essence or nature of money and replaced it with
his portmanteau list of functions, implicitly combining the two distinct theories under one
rubric (Schumpeter 1994 [1954], p. 1086). ‘Money is what money does’ became firmly
established as the conventional textbook mantra—unit (money) of account; store of
value; and (both) medium of exchange and means of payment.
Lawson begins with a consideration of the conventional list of money’s functions
and, consequently, like many others, unwittingly falls inadvertently into its trap. He is
unable fully to recognise the significance of the distinction between medium of exchange
and means of payment, using the terms throughout his analysis as equivalent alterna-
tives for the same phenomenon—that is, money.13
Despite the risk of perpetuating the conceptual (and common-sense) confusion, we
might choose to continue to refer to both tradable media of exchange and denomi-
nated means of payment as different kinds of the same thing, which is the implication
of the conventional list of money’s function and Lawson’s approach. However, they
are distinct phenomena. Leaving aside the question of whether genuine barter-based
economies have ever existed, there is no doubt that media of exchange—tools, pre-
cious metals and so on—were used in inter-community quasi-barter trade at the same
time as the Mesopotamian credit systems and the later use of the first primitive coins
in Lydia and Greece (e.g., Einzig, 1966; Davies, 1996; Graeber, 2011; Martin, 2014;
Goetzmann, 2016). However, evidence points to the simultaneous emergence of writ-
ing and the novel social technology of nominal units of account in the states of the
ancient Near East and Indo-China (Keynes, [1982] 2013; Martin, 2014; Graeber,
2011; Goetzmann, 2016).
As I have suggested, the fundamental analytical question is whether the existence
of a unit of account, which denominates debts and the means of their payment, can
be derived from the barter commodity-exchange model. It is important to note that
this model comprises nothing other than discrete or, in Orléan’s term (Orléan, 2014),
‘isolated’ individuals whose maximising strategies are held to lead to the spontane-
ous emergence of the commodity that is exchangeable for—or can ‘buy’—all others.14
This would vindicate the Mengerian commodity-exchange theory and, by demonstrat-
ing that a commodity’s prior value was the basis for a money of account, show that
the Historical School and Keynes were merely noting the historical circumstances in
which states had imposed or administered, but had not devised and introduced, mon-
eys of account.
Ceteris paribus, bartered commodities will have widely varying exchange ratios,
based on individual traders’ preferences, rendering them an inadequate basis for debt
contracts and for price-lists in a genuine multilateral market.15 One hundred goods
could yield 4,950 exchange ratios (Ingham, 2004, pp. 22–25; Davies, 1996, p. 15;
Orléan, 2014, pp. 124–37). Empirically, some commodities would be more tradable
than others; but without the addition of further conditions to the model of ‘isolated’

13
  I should not exclude myself from those who have focussed on the list! However, I did pose the question
of whether all functions had to be fulfilled for something to be money, and if not, which ones were specific.
I followed Keynes on money of account (Ingham, 2004, pp. 3–6).
14
  Clower ([1967] 1984).
15
  See Orléan’s thought experiment (genèse conceptuélle) to demonstrate the necessity of money for multi-
lateral market transactions (Orléan, 2014, pp. 113–20).

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 ‘Social positioning and the nature of money’   Page 7 of 14
individuals engaged in barter, the logical/conceptual derivation of the emergence of a
single medium of exchange cannot be sustained.16 ‘There are as many valuations as
there are goods and circumstances of exchange, with no possibility of being able to
deduce anything whatever from them’ (Orléan, 2014, p. 127).17
Radford’s study of Second World War prison camps is frequently cited as evidence
of the ‘spontaneous’ emergence of money from commodity exchange (Radford, 1945;
see the textbook example in Champ and Freeman, 2001, p. 38). In the transit camps,
cigarettes were the most tradable commodities, but they had widely varying exchange
ratios with other goods. The ‘highest level of commercial organisation’ occurred in the
established camps’ shops, ‘controlled by representatives of the Senior British Officer’,
which prohibited barter, posted prices and only accepted payment in the controlled
supply of cigarettes. Eventually, a paper currency was introduced based on a money
of account—the Bully Mark, which represented a fixed exchange rate between food
(‘bully’) and cigarettes (Radford, 1945, pp.  197–98). The camp’s money economy,
based upon the nominal money of account of an invariant relationship between ‘bully’
and cigarettes, did not emerge spontaneously from exchanges between ‘isolated’ utility
maximizing individuals; it was, rather, organised by the authority of the officers.
Clearly, money of account may be constructed by establishing a ratio between various
measures, by weight or counting, of material things. But, the invariant value standard
that it represents is an abstraction—i.e., ‘existing in thought rather than matter’ (Concise
Oxford English Dictionary; Ingham, 2004, ch. 2).18 In a response, echoed by Lawson,
critics have contended that this argument reduces money to a virtual existence: money
is ‘measure without value’ (Sgambati, 2015, p. 310; and the reply in Ingham, 2016);
and that it is necessary to demonstrate the ‘existence of money of account that did
not originally function as a medium of exchange, i.e. money of account with purely
ideal units, products of human consciousness alone’ (Lapavitsas, 2005, p.  396; and
the reply in Ingham, 2006). To be sure, Babylonians used barley and silver by weight
as payment; however, the money of account for budgeting and establishing prices and
debts, based on an authoritatively established ratio of quantities of barley (gur) and silver
by weight (shekel), was the result of an abstraction by human consciousness.
Money’s nature as purchasing and debt settling power is an abstract social force that
is only apparent in its operation. Its power does not reside in its material structure—
these are merely the varied means by which these powers are deemed to be established
as standard value, stored and transmitted. Money is in the category of socially con-
structed powers that are represented by objects, and actualised—i.e., made ‘real’—by
social relationships and institutions. Economic theories which focus on the substance
or utility of ‘material’ things fail to provide an adequate conceptual framework for
grasping money’s nature. A more appropriate model, e.g., would be Durkheim’s social
ontology of religion which the anthropologist Mauss applied to money and likened

16
  Economic theory’s claim that ‘higgling and haggling’ in myriad bilateral transactions will eventually
produce a genuine multilateral market based on prices is implausible. It is significant that Walras had to
introduce an auctioneer and a numeraire into his model in order that it could function.
17
  Even Menger conceded this point; see Orléan (2014, p. 127, note 32). In a money economy, I know
that my stock of wealth is £1m by referring to current prices. Tony Lawson has a stock of tradable things,
but has no means of establishing his wealth until the barter exchanges have taken place, returning him to
the status quo ante.
18
  Derivative contracts are similarly based on ideal or virtual qualities of commodities.

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 Page 8 of 14  G. Ingham
it to the magico-religious power of mana, as brilliantly explicated by Orléan (Orléan,
2013, pp. 54–57).
In short, the credit theory of money trumps the commodity theory because the latter
cannot explain, in its own terms, the existence of the unit of account by which money
is ontologically distinguished from merely exchangeable things which have utility for
some or, for others, embody an intrinsically valuable substance. Regardless of the form
of the money stuff (metal, paper, book or digital record), all money is a token credit
denominated in money of account. Medieval European monetary systems are instruc-
tive. In general, coins did not bear a numerical unit; their value was manipulated by the
sovereign’s ‘crying up’ or ‘crying down’ the coins by changing their exchange ratio with
a linchpin money of account, based on a virtual coin of a fixed fineness or weight (see
Fantacci, 2008; Einaudi, [1936] 1953). In the words of the great Cambridge historian
and numismatist Philip Grierson, ‘money lies behind coin’, Grierson, 1977, p. 12).
Simmel’s magisterial Philosophy of Money (a notable omission from Lawson’s exten-
sive bibliography) focuses on money’s abstract value; it is ‘the value of things without
the things themselves … the relation between things that persists in spite of changes
between the things themselves’ (Simmel, [1907] 1978, pp.  121, 124); it is ‘one of
those normative ideas that obey the norms that they themselves represent’ (Simmel,
[1907] 1978, p. 122). Forms of money represent an abstract conception of value which
is measured by itself—that is to say, a tautological but efficacious social construct.19
Money is abstract value sui generis, existing in a monetary space defined and circum-
scribed by the money of account which is sought by all participants (Ingham, 2004;
Orléan, 2013, 2014). Money is best seen as an ensemble of multilateral social rela-
tions of actual and potential credits and debts using means for transmitting abstract
anterior value by which these are contracted and settled. These means exist exclusively
in virtue of bearing/transmitting the socially recognised, consequently objectively valid
(intersubjective), measure of value. In a monetary system, the value of credit and debt
is mutually and internally determined.

3.  Lawson’s reconciliation

On first inspection, Lawson’s ontology of money as the ‘positioning’ of an already
valuable thing by being measured and socially accepted might appear to be simply a
different formulation of my position outlined above.
‘Money is constituted where it is accepted throughout a specific community that
a thing or stuff of value is positioned as generalised form of value, to function as a
general means of payment, in conditions of an equally accepted an appropriately posi-
tioned common or shared system of value measurement. Money is just that positioned
form of value.’ (Lawson, 2016, p. 972)
However, there are significant differences between Lawson’s ‘positioning’ and the
conception that I have advanced. First, as I have already indicated, Lawson doesn’t
provide an ontological explanation of how the ‘prior value’ of the ‘stuff’ is established
and how it becomes ‘generalised value’. Second, there is a preoccupation with the
materiality of value—in particular the role of cash—which I consider to be misleading
in an ontological account of money’s nature.

19
  Mirowski refers to the ‘working fiction of an invariant standard’ (Mirowski, 1991, p. 579).

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 ‘Social positioning and the nature of money’   Page 9 of 14
After taking the conventional list of functions as a ‘compelling starting point’, Lawson
concludes that ‘store of value’ is the most fundamental: ‘any item that is to serve the
functions of money has to be a form of value. For without value there is presumably
nothing to measure (or to store) or in which to ground any means of payment or
exchange … the property that must be possessed of any item or stuff, prior to it being,
and in order for its to be appropriately positioned as money (where it is), just is that it
is a reliable form of value’ (p. 967, emphasis added). By tacitly accepting that all the
attributes in the conventional list of functions, including both medium of exchange and
means of payment, are essential for the specification of money, Lawson is led to think
that it is necessary to reconcile the two theories because they ‘each capture something
of the actual situation’ (p. 963).
However, commodity theory advances a particular ontology of money’s nature in
an ahistorical conceptual account of how value is established in barter exchange. This
is the source of the incompatibility; the commodity theory is conceptually flawed and
historically inaccurate. I have argued that what Lawson refers to as ‘situations’ depicted
by the two theories are phenomenologically distinct, and that he has been misled by
the list of functions. Ontologically, money cannot be a matter of measuring an anterior/
prior value; monetary value cannot exist until it has been simultaneously described,
measured and thereby created. Historically, ideal abstracted conceptions of valuable
things were linked to create money of account, which is ontologically distinct from the
merely tradable things in Menger’s model.
Lawson clearly understands that his argument, ‘needless to say, begs the question
of the meaning of value in the relevant context’ (p.  967). But merely assuming the
existence of agreed value and the means of measurement, which in Lawson’s lexicon
renders it ‘reliable’, doesn’t answer the question. An adequate theory of the ontology of
money must provide an answer with an account of the specific conditions of existence of
the value—non-monetary or monetary. To repeat: barter-exchange commodity theory
and credit theory contain quite different ontologies of how value is generated. The for-
mer are substance theories in which things possess intrinsic value—‘congealed labour’
or utility for the individual. For the credit theory, monetary value is the abstract value,
described by money of account, by which actual values are realised by the interaction
of money users—buyers, sellers, debtors and creditors. Lawson’s reconciliation of the
two opposed theories by subsuming them under his ‘social positioning’ rubric is based
on the failure fully to recognise their irreconcilable ontologies.
Given that Lawson believes ‘money itself, or the material of money … is always rather
more concrete (if not always observable) thing or stuff’ (p. 984; n.b. the identification
of ‘money itself’ with ‘the material of money’), it is obvious, as he suggests, that his
framework can readily accommodate the commodity theory (p. 980). However, I would
suggest that his historical example of tobacco as commodity money in Colonial North
America may be read as supporting credit theory’s emphasis on money of account as
the unique specification of money rather than his argument for ‘prior’ value (p. 981–82).
An authority’s imposition of a unit of account on a commodity transforms a merely
tradable good (medium of exchange), with variable exchange ratios with other goods,
into money that can settle debts (means of payment), denominated in the same unit
of account (Grierson, 1977). Given the shortage of coin, tobacco was used as a sur-
rogate after its transformation into money by being rated at three shillings (money of
account) a pound by the Virginia legislature. To be sure, the surrogate was more likely

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 Page 10 of 14  G. Ingham
to be accepted in the first instance because it was intrinsically valuable, but this isn’t the
point. Moreover, the material commodity representing three shillings was soon replaced
by ‘“tobacco notes” issued by inspectors of government warehouses’ (p. 981).
Unlike commodity-exchange theory, Lawson is fully aware that ‘claim or credit
theories are prima facie the least likely, and perhaps even unlikely’, to conform to his
conception of the ontology of money (p. 975). Echoing Menger’s rhetorical question
of 1892, he recognises that ‘the puzzling task I face is to explain how bits of paper and
paper positioned as modern cash can possibly be said to possess value’ (p. 975; n.b.
the concern with cash). For the credit theorist, the answer is astonishingly simple: the
value of the ‘bits of paper’ (token credit) is given by the value of the debt that they can
redeem, as I explained at the outset. This is entirely the consequence of their common
denomination in the abstract money of account. But how does Lawson try to effect this
admittedly difficult reconciliation?
Pursuing the emphasis on cash, he contends in the first step that ‘coins and notes are
not only of minimal value, but never do serve as a means of payment anyway, whether
as a medium of exchange or otherwise, and so in my conception are not after all a form
of money’ (p. 976). Leaving aside the conflation of means of payment and medium
of exchange, this assertion simply recasts and at the same time obscures an essential
component of the credit theory of money. He continues: cash merely identifies specific
social relations that are of value, which are the credit rights internally related to the
debt obligations of the issuer of cash—‘it is these credit-debt relations that constitute
the relevant components of the value system’ (p. 976). Hence, ‘money is a specific
positioned set of social relations, where the latter, like all social relations, are real; cash
is a specific set of identifiers or tokens of such relations’ (p. 976). This is precisely
Simmel’s conclusion, repeated and elaborated, for example, by Ingham (2004) and
Orléan (2014). Issuers promise to accept or otherwise redeem the money that they
have issued; money’s value resides in its issuance as debt.20 After a considerable strug-
gle, I remain unable to see how the depiction of money in this section of Lawson’s
analysis differs in essential terms from the standard credit theory of money or to see
why tokens of credit cannot be referred to as money—or, more precisely, elements in
a monetary system which transmit the abstract value.
The problem with coins and cash seems to be a consequence of trying to integrate both
theories in the ‘social positioning’ ontology. Lawson contends that ‘notes and coins never
do serve as means of payment anyway, whether as a medium of change or otherwise, and
so on my conception are not after all a form of money’; rather, ‘the positional rights of
holders of cash take the form of credit rights internally related to the debt obligation of
the issuer of the cash’ (p. 976). Therefore, it is ‘not cash in the form of coins and notes per
se that are of value’ (p. 976; see also p. 978). To some significant degree, this is consistent
with the nominalist credit theory of money as a system of relations that I have advanced,
but it also contradicts one of Lawson’s foundational assertions that money ‘is always
rather more concrete (if not always observable) thing or stuff’ (Lawson, 2016, p. 984).
It is no surprise to a credit theorist to be told that the form for the transmission of
the credits in a monetary system is of secondary importance; but what precisely are

20
  ‘When barter is replaced by money transactions a third factor is introduced between the two parties …
the direct line of contact between them moves to the relationship which each of them … has with the eco-
nomic community that accepts the money’ (Simmel, [1907] 1978, p. 177).

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 ‘Social positioning and the nature of money’   Page 11 of 14
‘coins and notes per se’? I can only assume that per se is taken to refer to their mate-
rial composition. However, this has no direct bearing on their designation as forms of
money, which is dependent, to use Keynes’s term, on their ‘description’ by money of
account. As this applies to all forms of money, it is not clear why Lawson continues
to single out cash for this interrogation. For credit theory, the abstract debt cancel-
ling power is the essential quality of all forms of money, regardless of their material
constitution. Cash is ‘portable credit’ that cancels a debt (Gardiner, 1993); it is the
same order of phenomena as electronic impulses. (It is precisely this focus on cash and
coins that, e.g., led to the theoretical convolutions of velocity of circulation and other
misleading metaphors in the quantity theory of money [Schumpeter, [1954] 1994,
pp. 318–21, 1095–1106].)
To say that coins identify the holders of the credit in the social relations of a mone-
tary system merely recasts the credit theory of money into ‘social positioning’s’ lexicon,
which is an exercise that is only made necessary by subsuming material objects and
social roles under the same meta-theoretical rubric.
This is not the place to engage in the semiotics of money and its relationship to
Lawson’s version of social ontology as the ‘positioning’ of social relations and things.
However, I prefer to understand money as the power of abstract value that is signified
by the signifiers that we call money—‘the purest reification of means, a concrete instru-
ment which is absolutely identical with its abstract concept’ (Simmel, [1907] 1978,
p.  211). By its very nature, abstract power is socially constructed and is not directly
discernible to the senses—as succinctly expressed by Mitchell Innes in the epigraph at
the head of this article (Mitchell Innes, 1914, p. 159). Social life is replete with signi-
fiers of our mental creations—especially sacred objects, but also flags, medals and so
on. But it doesn’t make sense to locate national identity in the flag’s cloth, nor the con-
cept of honour in the medal’s metal.21 Like Mauss, Simmel understood that our trust
in money ‘requires a supra-theoretical belief’ or ‘quasi-religious faith’ (Simmel, [1907]
1978, p. 179).
Rather than confronting the different ontologies that frame the two theories of money,
Lawson interprets the problem as ‘a terminological difficulty’ that he needs ‘to face up
to’ (p. 978). He notes that credit theorists’ work contains ‘an uneasy slippage between
credit relation and token, with either or both being labelled money, as if they were one
and the same thing’ (p. 978; see Lawson’s reference to Ingham, 2004, p. 5). However, I
argue that social relations and their signifiers are not one and the same thing, but they are
elements in the same thing—a social system. It is a definitive property of human society
to create abstract qualities and to forge the material forms of their signifying symbols.
In this regard, we might briefly note a further consequence of Lawson’s reasoning. In
his insistence that cash has properties that ‘come to serve as its system functions’, he con-
joins those that are frequently invoked in the commodity theory (‘ease of transportabil-
ity, durability, difficulty of copying/counterfeiting’) with the differentia specifica in credit
theory (‘bearing symbols of so many units of account’) (p. 980). Following the logic of
his glass and windows in houses (p. 964), Lawson implies that the material properties of

21
  In terms of the Lawson–Searle disagreement as summarised by Lawson, it would seem that I  must
be with Searle in believing that ‘mere representations are sufficient for the functioning of deontic powers’
(Lawson, 2016, p. 965, footnote 5). To my mind, social representations can never be ‘mere’. Furthermore, it
appears that I might also share Searle’s view on the relationship between ‘brute’ facts or properties and their
social transformation. However, I haven’t given this possibility a great deal of thought.

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 Page 12 of 14  G. Ingham
cash such as ‘durability’ perform essential monetary system functions in the same way as
the ‘bearing of symbols’ of units of account.22 However, almost anything can and has been
‘positioned’ as means of representing and transmitting monetary value, but this is not the
case with windows. What he sees as ‘terminological’ is in fact a conceptual ‘difficulty’ which
is the result of not observing the phenomenological difference between the ‘social posi-
tioning’ of elements in material systems and in symbolic social orders. To be sure, builders
and glaziers ‘socially position’ glass as windows, but this is made possible by its material
properties. The same is not true of symbolic orders—such as abstract money of account—
in which the properties are both socially created and simultaneously ‘positioned’.
Returning to the main issue, however, we must briefly examine how Lawson attempts
to accommodate credit theory in his version of social ontology and, thereby, reconcile
it with commodity-exchange theory. His answer is disarmingly simple: in the same way
as a commodity, debt can be seen as a ‘prior’ form of value which is then ‘positioned’
as money (p. 977). However, I do not find this convincing. First, granting for the sake
of the argument that debt is a form of value, it makes all the difference in the world
ontologically whether the debt is denominated and paid in money or in kind—for
example, a ‘pound of flesh’ or a hundred lashes! If paid in money, the debt will have to
have been contracted first in an anterior money of account, which is the only way that a
monetary value of the debt can be established. (Moreover, this would provide the basis
for the transferability of debt which is essential for a monetary debt, as opposed to the
particularism of a debt in kind or the exchange of gifts and favours.)
Second, although Lawson agrees with credit theory that the act of issuance confers
the nominal value of the debt settling capacity of coins and cash (p.  976; see also
p. 978), his analysis of credit theory, in the main, follows the logic of the commodity-
exchange theory. In effect, debt is assigned the same theoretical status, or ‘position’,
as the commodity; it is the ‘prior’ value without which money cannot be produced.
However, without the specification of how debt is assigned its value, it remains an
unresolved tautology to assert that money is socially positioned ‘prior’ value of debt.
As I  have already noted, this isn’t a problem for credit theory; money is a socially
constructed tautology—‘one of those normative ideas that obey the norms that they
themselves represent’ (Simmel, [1907] 1978, p. 122). In a monetary system, debt and
credit are mutually and indivisibly determined by the money of account.
In short, it is not enough to say that ‘all forms of value are ultimately determined by
the system as a whole, the product directly or otherwise of human beings interacting in
the whole gamut of social relations’ (p. 977). This just about covers everything in social
life, but doesn’t really tell us anything about how value is determined and its specific
monetary incarnation—i.e., how monetary relations differ from commodity exchange
and other kinds of debt obligation.

4.  Conclusion: conceptual and historical analysis

Notwithstanding a reluctance to pursue the question of methodology, I cannot avoid
the conclusion that the difficulties that I perceive in Lawson’s reconciliation of the
two theories of money can be traced to the use of ‘social positioning’ in the ontol-
ogy of both social and material systems. Consequently, Lawson is led to believe that

22
  Felix Martin has suggested that the misleading preoccupation with the coinage form of monetary trans-
mission is to some extent at least a consequence of their survival, as opposed, e.g., to tally sticks and other
perishable forms (Martin, 2014, p. 30).

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 ‘Social positioning and the nature of money’   Page 13 of 14
commodity-exchange theory’s focus on the pre-existing value of material things is sig-
nificant for the ontology ‘of’ money. To be sure, the history of money’s long develop-
ment could not be written without charting the changing physical nature of forms for
transmitting value, but this is not the problem that Lawson set himself.
The two theories provide different ontological accounts of how the ‘positioning’ of
value as money is accomplished. In the original Methodenstreit dispute, the economic
theorists—Menger and von Mises—set out to explain value in terms of the subjective
utility of goods for individuals engaged in ‘pure’ exchange in a ‘natural economy’,
shorn of all historical context. Money was the outcome of such a process. Hildebrand,
Knies, Roscher and others focussed on the historical changes in the development of
money and insisted that commodity theory could not explain the existence of ‘value-
less’ modern money, detached from precious metal.
In typical fashion, Max Weber intervened to disagree with both positions. As we can
never know or capture the complexity of reality, analytical constructs are an inevitable
necessity in the social sciences. However, unlike natural phenomena, human history
is a singular developmental process in which particular phenomena can only be fully
understood in their historical location. For example, homo economicus is a useful ana-
lytical construct but not a universal, timeless characteristic of human action. Rather,
it describes a particular type of action that emerged and was made possible by its loca-
tion in the particular historical structure of modern capitalism (see the discussion in
Ingham, 2011, pp. 24–35). To overcome the analytical problem, Weber proposed the
use of ‘ideal types’ which were both conceptual and historical. Customary media of
exchange in traditional society were contrasted with the money economy of modern
capitalism. In the former, media of exchange are ‘material objects that are accepted
merely in the expectation that they will be accepted by others’. In the latter, means of
payment were based on a ‘“definite quantum”, guaranteed by law, which is divisible
as a fraction or multiple, enabling arithmetic calculation’. As opposed to traditional
media of exchange, all money’s consequences are ‘dependent on what is in principle
the most important fact of all—the possibility of calculation’ (Weber, 1978, vol. 1,
pp. 75–82). Like all social phenomena, realisation of this possibility had definite his-
torical ‘substantive conditions’ (Weber, 1978, vol. 1, pp. 107–8).
In short, particular substantive conditions are critically important for understanding
the unique specificity of money and how it differs from mere media of exchange. To my
mind, these are also ontological conditions that reveal and explain the nature of money.
The important task is to show precisely how this is possible.

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