On October [tk] 1968, Mark Bickhard and I met in New York city at a “convention” Murray Rothbard had summoned to found his Radical Libertarian Alliance. Karl Hess was there, who left early to lead some confrontation with the military at Fort Dix in New Jersey as an anti-war gesture (“new left style”).
Mark and I visited other people in NYC, among them Murray Bookchin, a well known, published anarchist. Bookchin was expounding to us about his “system” for a communal society. He had some idea of the “distribution” of production using computers, but it was not choate.
- Mark Bickhard asked Murray Bookchin what was his “unit of information” in his imaginary computer economic-information system? (“Bits” of some variant; associated with “what value?”)
Mark Bickhard went on to become a Professor of Philosophy, Robotics, and Psychology at Lehigh University. He has published several books and articles further developing his early ideas.
The Unit of Accounting
To me, his question introduced the concept of the “Unit of Accounting” as the key detail to the question about money and “the quantity of money.”
- The Unit of Accounting is ADDITIVE.
It can have a Sum Total. That becomes “the quantity.” It also becomes the basis for CREDIT. Credit is any form of “asset” based on a promise of future payments (the “liability” of some obligor), and of course those are traded as well as held to maturity. Some of those liquid assets are called “nearly money” by economists.
- For example, what your banker owes you on your current statement is called “money” because it is only one step removed. But it is not as fungible as BenFranklin F.R.$100 notes.
See further discussion of where this analysis of the Unit of Accounting, and its central role in “money,” are explored:
- A Flexible Exchange Rate World.