Lietaer also believes the archetype that has been repressed is the Great Mother archetype (abundance), and the two shadows that have emerged are greed and fear of scarcity. If an archetype has been repressed for a long enough period of time, people come to regard these shadows as 'normal'. So, it should come as no surprise that, during the Victorian era (the ultimate repression of this Mother archetype) Adam Smith looked upon the world, saw how civilized nations behaved (in terms of self interest and greed), and regarded this as 'normal'. Therefore, Lietaer believes that modern economic behaviours (neoliberal) are based upon a repressed archetype, and this is what creates 'scarcity economics', defined by some as the maximization of scarce resources in a world of unlimited wants. It is not the resources that are scarce; the scarcity of money itself (as an exchange medium) creates the sense that they are.
Finally, during the fifth stage of monetary development, the issue of counterfeiting was confronted by nations through the declaration of fiat money. Fiat currencies are territorially homogenous currencies26 (referred to as NTHC's) that are legislated forms of money to be used to pay taxes and settle all accounts and debts. As Helleiner has shown, prior to the development of NTHC's many nations had regional, or sub-national currencies issued by regional banks.27 Furthermore, the development of national currencies is not the 'natural' order of currencies, but constructed by states, as defined by the Peace of Westphalia. As Cohen argues, "Westphalia . . .enshrined territory as the central organizing principle of world politics" (p.14). The Peace of Westphalia marked a critical turning point in human affairs, as it separated medievalism from modernity.
In this stage of monetary history, money became defined along the lines of geography, and the rise of the modern nation state roughly corresponded to the development of NTHC's. The "One state, One currency" theory defined currency along three lines: 1) its territorial domain (defined by the political jurisdiction of the state), 2) its transactional domain (defined by the space of a currency's use for transactional purposed and 3) its authoritative domain (a modern definition that is a combination of both). Money acted as a political symbol, as it enabled a distinction between 'us' and 'them' (Cohen, P.35). Money served to construct a national identity; therefore it served the dual purpose of acting as a daily reminder to citizens of their connection to the state as well as reminding each other that they were part of the same social entity - similar to language (Cohen, p.36). Money also aided the state in extracting seigniorage28 (a fee for the use of money) which rested on two pillars of 1) monetary policy that is subordinated to fiscal policy and 2) the absence of an available substitute currency. Finally, the development of NTHC provided monetary insulation, or the avoidance of having another nation provide monetary services, which, Cohen argues is an issue of sovereignty: "In short if you want political autonomy, don't rely on someone else's money" (p.46).
Be Sure to Continue to Page 7 of "E Pluribus Unum: Dollar Hegemony and Money Creation in IPE".
