Table of Contents Metallism versus Chartalism . The following was excerpted, with some editing, from the paper titled The Hierarchy of Money by Stephanie Bell, written for The Jerome Levy Economics Institute. There is no shortage of views on the nature and role of money among the different schools of economics. However subtle the differences may be, they can all be associated with one of two basic theories, metallism or chartalism . Chartalism is a term derived from the Latin word 'charta' meaning a ticket or token.
Chartal money is the token for value, while metallist money is the thing of value itself.
Precious Metal Viewed as Money Metallists believe money developed spontaneously as a medium of exchange in order to eliminate the obvious limitations of barter. Society is thought to have settled on precious metal as currency so that money would have intrinsic value. Money's value then is explained in terms of its precious metal content or backing. As a producible commodity, metallist money was really no different from any other commodity. To guarantee the weight and purity of precious metal as money, a stamp certifying its integrity came to be required before it could circulate widely.