We are now moving to section 2 of the Futurity chapter entitled “Release of Debt”. This section is about 20 pages long. Here Commons starts by focusing on G.F. Knapp and his idea of a “pay community”. Georg Fredrich Knapp was a German economist who published an important book in 1905 titled “The State Theory of Money”. For Knapp money is not a commodity but an “institution” that allows for the creation and release of debt or liabilities. Commons calls him the German “Macleod”. Common believes that the expansion of means and methods for the release of debt as a form of duty is the history of civilization. He writes that both Macleod and Knapp understood that the expansion of forms of debt release were an important part of the economic story. He writes that, “Capitalism is the present status of releasable debts, and Knapp's definition of means of payment is a special case of the general principle of the changes in means and methods that have been going on through changes...
This blog has been setup to explore the ideas and philosophy of the American institutional economist John R. Commons.