CBFL Seminar Series: Money as a Thing and Money as Functions

Professor David Fox of the University of Edinburgh and Visiting Professor at the National University of Singapore gave a seminar entitled ‘Money as a Thing and Money as Functions’ at the Faculty of Law’s Bukit Timah Campus.

Professor Fox started with the idea that money in private law is a composite entity: an aggregation of legally-recognised functions that happen to be associated with, or represented in, certain things recognised in the law of property. In that sense, money is more about legal functions than it is about things. The range of things that private law treats as money are, as things, very different (for example coins, bank notes, bank deposits). What is central and common across these, however, is that they are denominated in monetary units and that they are capable of being tendered in discharge of monetary debts (a legal function), nearly always at nominal rates (1:1 equivalence).  The gist of money in law, argued Professor Fox, is a network of legally ascribed functions. The thing to which those functions are ascribed is just one component of the composite entity.

This thing has a function of its own: by treating the thing as a kind of property, it allocates the capacity to discharge debts to a particular person through an exclusive regime of proprietary protection. In other words, while one aspect of money is its function in discharging debts, the aspect involving the proprietary regime provides the answer to the question of by whom that debt-discharging function may be exercised. Money is an institutional fact, a product of collective intentionality. This is to be contrasted with brute facts which do not rely upon human consensus. The functions of an object such as money are never intrinsic to it: they are ascribed to the object by users or by some authoritative legal institution (where it involves legal functions). In principle, this means that any kind of thing may have monetary functions ascribed to it, although some kinds of things are better suited than others to do so.

The continued existence of an object’s monetary status depends entirely on collective belief or its continued legal status. The recognition of new monetary things tends to be incremental and the kinds of things to which these monetary functions are ascribed need to exist in definite (or definitive) form. Even if monetary functions tend to subsume the things they are ascribed to, the things themselves have a place in the law of property by way of certain functions, such as allocating the power to discharge debts to whoever has title to the money. As a composite thing, an understanding of money requires reference to other kinds of related legal relationships, notably debt.

The seminar concluded with a vibrant Question & Answer segment which included the theories of institutional fact and the work of John Searle, the form that has to be taken by money and whether formless money would be workable, the possibility of certain digital assets such as cryptocurrencies being recognised as types of money, and the relationship between legal tender, currency, and debt in understanding the function of money in private law.