Currency Overtaking,Myth of Currency Standard and the Evolution of Chinese Currency System:A Concurrent Discussion on the Legacy of Chinese Finance in Goetzmann's View
Over recent years,there has occurred a large body of literature on the evolution of the Chinese currency system both in domestic and foreign academic fields.Yet much of it has achieved little in the reconstruction of analytical framework.However,William N.Goetzmann makes an obvious exception in this regard.In sorting through the legacy of Chinese finance,he discovered the phenomenon of currency overtaking buried in the depth of history.Early in the Shang Dynasty,there already existed a currency which functioned only as a sym-bol of medium in exchanges,while in the west this situation didn't occur until very late.Such a discovery seems to give a clue to solve some of the long-confusing myths in Chinese history.Factors contributing to this accomplishment include the early formation of a unified political system and an economy of super big scale and the demand for inter-spacial distribution of resources.The most important financial legacy from the overtaking is undoubtedly the establishment of a money system without standard,which provides a completely new logic for our understanding of the credit nature of the paper money system and the copper coinage system used in the long history of China.From this perspective,a new insight into the Gresham's law——a constant happening in history——can be gained;the strange coexistence of the prosperity of the Tang Dynasty and its backward money system will find a logical explanation;the origin of money,which functions as a means of distribution,becomes traceable.Indeed,a money system without standard is one of the lowest cost.Yet it is also a system which has the strictest requirement for government credit and is the most difficult to handle.The final test falls on how well the government can discipline itself with regard to its fiscal policy.It is needless to say,Goetz-mann,consciously or unconsciously,reveals a tendency towards Eurocentrism.However,he is,meanwhile,puzzled by the Chinese myth,that is,why China can enjoy a civilization for thousands of years in the case of having no modern economic(financial)institutions.According to the argument in my paper,the answer to the puzzle can be reduced to one statement:China has always followed its own unique financial means in the crea-tion of its splendid civilization and economic prosperity.
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