British diplomat and economist, author of two papers in The Banking Law Journal that constitute the most radical early statement of the credit theory of money: “What Is Money?” (May 1913) and “The Credit Theory of Exchange” (January 1914). Innes served in the British diplomatic corps in Egypt, Uruguay, and the United States. His monetary writing was a sideline to his diplomatic career, and the papers vanished from economic discourse for most of the twentieth century before being rediscovered by the MMT school.
Innes argued, with historical evidence spanning Babylonian clay tablets through medieval tally sticks to modern banking, that money has never been a medium of exchange that evolved from barter. The barter story (Smith’s “propensity to truck, barter, and exchange”) is a myth with no anthropological support. Money is credit: a record of debt. The coin is a token of indebtedness, not a commodity with intrinsic value. The government’s money is the government’s debt, and taxation is the mechanism by which the government redeems its own IOUs. Innes stated this with a clarity that would not be matched for eighty years: “A sale and purchase is the exchange of a commodity for a credit. The only thing which gives the credit its value is the guarantee of the government that it will be received for taxes.”
S-curve position and structural prematurity
Innes published in 1913 and 1914, at the absolute peak of the industrial acceleration phase and on the eve of the gold standard’s first collapse. The timing is significant. The coordination story Innes challenged (money is a commodity; gold backing gives it value; taxes transfer real wealth from the private economy to the state) was at its maximum institutional entrenchment. The Bank of England, the gold standard, the entire architecture of pre-war international finance operated on the metallist premise. Innes’s papers were published in a specialist journal, attracted brief attention (John Maynard Keynes reviewed the first paper, favorably but cautiously), and disappeared.
The disappearance is the structural-prematurity pattern in its purest form. Innes was not refuted. He was ignored. The coordination story he challenged was load-bearing infrastructure for the global financial system of 1913. Acknowledging that money was credit, that the barter story was a myth, and that taxes redeemed government IOUs would have dissolved the narrative substrate on which the gold standard rested. The acceleration phase could not absorb the correction because the acceleration phase was built on the story the correction dissolved.
Innes’s two papers were rediscovered in the 1990s by L. Randall Wray, who republished them with commentary in the collection Credit and State Theories of Money (2004). They are now treated as foundational texts of Modern Monetary Theory. The gap between publication and reception (roughly eighty years) is comparable to the gap between Knapp’s State Theory (1905) and its absorption into MMT. Both gaps are predicted by the structural-prematurity thesis: the correction becomes receivable when the phase that required the old story is ending.
Innes’s destruction of the barter myth is separately significant for the BioConomy corpus. If money did not evolve from barter, the entire story that markets are natural extensions of a human “propensity to truck, barter, and exchange” (Smith) collapses. Money is an institutional creation. The form of money is a design choice. And design choices can be redesigned. This is the opening through which the Substrate Hypothesis enters: if the monetary substrate is designed, it can be redesigned. The question is what coordination behaviors the redesign produces.
Related pages
- Georg Friedrich Knapp
- Abba Lerner
- Hyman Minsky
- Warren Mosler
- L. Randall Wray
- Stephanie Kelton
- Adam Smith
- Substrate Hypothesis
- Structural Prematurity
- The S-Curve Thesis
Sources
- Innes, A. M. (1913). “What Is Money?” The Banking Law Journal, May 1913
- Innes, A. M. (1914). “The Credit Theory of Exchange.” The Banking Law Journal, January 1914
- Wray, L. R., ed. (2004). Credit and State Theories of Money: The Contributions of A. Mitchell Innes
Provenance
Created September 2026 for the BioConomy wiki as part of the MMT/Chartalist lineage mapping for the MMT/S-curve research brief.