To what extent might competition become a basis for the money supply process? Is private competition in the money supply viable and useful or do we need a government monopoly on money? Dealing with these questions and others, Paul Terres outlines a competitive framework within which monetary institutions and systems can evolve. The logic of a competitive monetary system lies in its capacity to promote the discovery and the implementation of better monetary systems. The repeated abuse of the state monopoly on banknotes by governments would be prevented in a competitive monetary system, which would also create better conditions for stable money than monopolistic government policies or 'independent' central banks have done. However, a competitive money system would revolutionize the theoretical analysis of money, would necessitate a completely new interpretation of the causal relationship between money and prices and would make current monetary theory obsolete to a large extent. (Published in German.)
