This section explores two diametrically opposed theories of money: the debt-money theory and the commodity-money theory. On the one hand, proponents of debt-based monetary theory assert that money is fundamentally a form of debt. On the other hand, proponents of commodity-money argue that money is fundamentally a commodity, such as gold, with other instruments, such as bills and IOUs, being merely forms of credit.

Let's explore a clear summary of these theories.

Here is a summary of the monetary theory known as "debt-money", according to which money is fundamentally a form of debt:

According to this theory, developed by Alfred Mitchell-Innes and expanded upon by David Graeber, money is intrinsically an acknowledgement of debt, stemming from the credit relations that historically pre-existed direct monetary exchanges. Rather than arising from a need linked to barter, money appears as a way of accounting for, transferring, and settling social obligations or debts between individuals or groups.

Thus, all money circulates as a debt owed by one person or institution to another, backed by the trust and social or state authority guaranteeing its validity. According to this view, to possess money is to hold a claim on society; society owes the holder a debt. Money is therefore never neutral or autonomous, but always an underlying debt: holding money essentially means owning a claim on society or an economic community.

This reasoning contradicts the classic idea of money as a simple "intermediate commodity", and instead emphasizes the central role of social and political relations in the creation and management of money.

A point of contention in this theory is its assertion that money is invariably a debt, particularly when considering examples like the exchange of gold between distinct tribes, where the transaction is final and leaves no residual debt. Proponents of this theory will often tell us that these exchanges are not monetary exchanges, but barter. As already mentioned, I disagree. It is a monetary exchange, since the gold is not going to be consumed; it is going to be used as money.

Here's a clear summary of the monetary theory known as "commodity-money", where money always emerges as a commodity, notably gold, which emerges from a need to be able to trade, a commodity that will generally be accepted abroad and which is acquired for trading purposes.

According to this theory, developed by classical economists (Adam Smith, David Ricardo) and taken up by Marx, money emerges naturally as a commodity among others, often a precious metal such as gold or silver, which has an intrinsic value independent of its monetary role. Initially, these commodities are spontaneously chosen by economic players to facilitate trade, thanks to their intrinsic qualities (scarcity, durability, divisibility, and stability).

Commodity-money is distinguished by its physical existence and a value determined by the amount of labor socially required to produce it (as in Marx). Society uses gold, for example, not only to simplify barter but also as a unit of account, a store of value, and a universal medium of exchange.

In this vision, money always retains a real value, as it remains linked to a tangible commodity. Even when the role of money becomes abstract (minted coins, banknotes, or scriptural money), its validity still derives, directly or indirectly, from a reference to an underlying commodity such as gold. This theory therefore insists on the material and economic origin of money, as opposed to theories that regard it as a mere convention or debt. According to this theory, any representation of money by a substitute, such as a bill redeemable in gold, would be credit.

The always commodity theory posits that money must be a tangible good, such as gold. Proponents of this view argue that a banknote, even if backed by gold and functioning as money, is not money itself but merely a claim on the underlying commodity.

A common analogy posits that a banknote is to a gold coin what a coat check ticket is to a coat: the ticket is not the coat, but merely a claim on that specific object

However, this analogy is flawed. A locker room coupon is not a generally accepted method of payment. It is a specific claim on a particular good. Money, in contrast, is a universal medium of exchange. Money is not a claim on a specific object but a generally accepted means of payment that can be used to acquire any good or service.

Therefore, the parallel between a limited-use coupon and a universally accepted banknote is invalid. This distinction highlights a key point of contention. Commodity-money theorists often maintain that only the physical gold in the vault is money, and the banknote is a substitute. Critics of this view, however, see no semantic paradox in considering both the physical gold and the representative banknote to be forms of money, a concept Ludwig von Mises addressed with his theory of "monetary substitutes."

The weakness of the locker room analogy is addressed in scholarly critiques of commodity theories. For instance in Aux origines de la monnaie, Alain Testart highlights a fundamental distinction:

*Note 14: "Excellent criticism - excellent because it is on the very ground on which Knapp places himself, the legal ground - by Rist (1938: 372, note 1) of the comparison between paper money and checkroom tokens: if we can speak of a kind of claim in both cases, the fundamental difference is that in the first case, and in the first only, it is a claim without a specific object

The same author further develops this concept of a claim to distinguish money from credit:

The most striking paradox illustrating the dichotomy between debt-money and commodity-money theories concerns the question of whether gold is a currency today.

On the one hand, debt-money theory defines money first and foremost as an intermediary exchange or means of payment that is generally accepted, or even imposed, by a public authority. From this perspective, gold is no longer a currency, since it is not widely used or accepted as a common medium of exchange.

On the other hand, commodity-money theory views money as a tangible commodity, spontaneously chosen by society for its intrinsic characteristics (scarcity, durability, divisibility, etc.). According to this approach, gold remains the true universal currency, and all other forms of money today are, fundamentally, no more than credit based on trust.

This paradox clearly shows the gap between these two monetary conceptions: for the former, gold is no longer a currency; for the latter, on the contrary, it remains the only true currency in existence.