Money proper versus money representatives

There's a distinction praxeologically very relevant to do: money proper and money representatives.

The distinctive feature of money proper, vis-à-vis a money representative, is that money proper absolutely cancels a debt.

The distinctive feature of a money representative, vis-à-vis money proper, is that a money representative serves merely as a sort of IOU. It doesn't matter whether or not the creditor sometime decides to claim debt cancellation. It doesn't matter if the debt is against a specific debtor or against whoever who happens to fulfill certain more or less predetermined requirements. What matters is that a money representative, unlike money proper, doesn't cancel a debt.

This classification doesn't exactly follows Mises's Appendix B to his outstanding The Theory of Money and Credit. I consider Mises's categories as innecesarily tainted by historic development rather than praxeologic relevance.

The rather materialistic distinction between commodity monies and fiat monies is a nothing but a rough approximation to the important distinction pointed out above.

Distinction between money proper and money representatives belongs to the (praxeologic) pure theory of posesion. As such, the institution of legal property plays a major role. This could result in problems to define concrete assets. For instance, I'm not pretty sure if the Costa Rican colones which I carry in my pocket are no liability to anyone or if I could go to court to demand that the Central Bank of Costa Rica give me something in exchange for colones. Currently, as the Central Bank is commited to free sale of dollars (receiving exclusively colones), my colones could somehow be seen as money representatives of dollars proper.

This sheds light on other important aspect of money representation. Effective substitutability requires a reasonable expectation of the price of the credit instrument (money representative) in exchange for the asset which cancels the debt (or alternatively for another money representative, not homogeneous with the original).

As money qua money (this is: without taking into account its use value, but exclussively its exchange value) requires the expectation of it being accepted in an eventual future exchange, it could be argued that money qua money is a representative of something else, that money money qua money is (praxeologically though not legally) nothing but a representative! Ironic as it sounds, this is precisely the core of Macleod's credit-theory of money. (1)

(1) On the difference between use value and exchange value, see Menger's Principles of Economics, chapter VI.