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Money, Money, Money

It is far from obvious what money is.

That the price of gold has risen to an all-time high is evidence of this.

Of what real value is a piece of gold? It has some industrial use, but not much.
It endures over time, but basalt does likewise and, indeed, in the context of a human lifetime the endurance of gold is nothing outstanding; it shares that property with too many other substances. Why should it increase in value relative to any or all national currencies, as it has done?

It is in fact a reference point; the currencies have fallen in value relative to it.

Probably money is an economic notion more than a legal one. That notion is subject to change; consider e-money.
E-money can be encountered in a chip card which has been “loadedâ€? with “valueâ€? and which can be used to discharge an obligation, limited to the value in the card. The possession of the card is sufficient to get the value of it. Significantly, the State need not, and usually does not, have any involvement in such e-money.

One theory of money, “fiat moneyâ€?, bases it on the State control of the monetary system and the issuing of notes and coinage. “Nominalismâ€? is an essential element of the State theory of money. Nominalism was recognized by Aristotle in the Nichomachean Ethics;

… money has been introduced by convention as a kind of substitute for a need or demand … its value is derived not from nature but from law, and can be altered or abolished at willâ€?.

It is a principle of Irish (and UK) law that the purpose of the award of compensation by the courts is to, insofar as money can, place the injured party in the same position as if he/she had not been injured.

The State theory of money is, potentially, at odds with that principle because nominalism disregards everything save the attributed value to the currency or State “unit of accountâ€?. Nominalism disregards the changing value of the currency. It takes no account of inflation or depreciation.

The compensation principle is an expression of another principle; the need to do justice. The acceptance of Nominalism is, when it comes to compensation for injury, a breach of the requirement to do justice.

Unadjusted money value may in a period of inflation greatly benefit a wrongdoer. The wrongdoer may deprive a victim of value but, due to the effects of inflation, ultimately be obliged only to make restitution of something of lesser value than the benefit he/she gained.

The Book of Quantum of the Personal Injuries Assessment Board has a similar effect.
It sets out “valuesâ€? for some types of personal injury and in doing so clearly accepts the State theory of money and inherently accepts the principle of nominalism. In truth, the “valuesâ€? in the Book of Quantum are not fixed values; they change to a greater or lesser degree and the underlying trend historically is to have them depreciate in value, relative to everything other than the attributed value of the currency.

The UK courts have avoided the problem by affirming that the “valueâ€? at the date of judgment is the appropriate value to determine proper compensation – Ascot Midland Baptist (Trust) Association v Bermingham Corporation (1970) AC 874. This approach involves taking account the value of the money; it takes account of the effect of inflation. A Book of Quantum does not.

It is worth noting that the UK Law Commission rejected the idea of the establishment of a “Compensation Advisory Boardâ€? i.e. a UK PIAB.