On October 25, “Macro-Finance Salon - Millennium Commemoration of the Birth of Paper Currency (1023-2023),” jointly organized by the International Monetary Institute (IMI) and the Department of Monetary and Finance at the School of Finance, was successfully held. The event focused on the theme of “Marketized Currency in Modern China and Hayek's Monetary Theory.” Professor Dai Jianbing, Party Secretary at Hebei Normal University and Deputy Director of the Financial History Professional Committee of the China Finance Society, attended the salon and delivered the keynote speech. He elaborated on the actual performances of modern China's pluralistic and co-existing monetary forms as a verification of Hayek's conception of competitive currencies. Professor He Ping from the School of Finance at RUC and Deputy Director of the Financial History Professional Committee of the China Finance Society chaired the salon.

Professor Dai Jianbing regarded currency as one of the greatest inventions of mankind at the institutional economic level, making substantial contributions to economic development by reducing transaction costs. He highlighted the vast knowledge, theories, and data on Chinese currency from the late Qing Dynasty in the 1840s to the Republic of China, emphasizing the significance of investing time and effort in in-depth research.

Firstly, he expounded on Hayek's monetary theory. Hayek believed that while “the government monopoly on currency” was a historical fact, it might not necessarily be reasonable. He argued that economic crises and the Great Depression resulted from monopolized currencies. Therefore, he advocated that monetary competition was preferable than a single currency monopolized by the State, foreseeing an eventual denationalization of currency. The foundation of this theory lies in the ideology of democracy and liberty, advocating that currency competition surpasses currency monopolies, and sound currency stems from self-interest rather than benevolence, among other factors.

Subsequently, Professor Dai Jianbing provided a detailed account of the operational logic of China’s marketized currency (unauthorized notes) since modern times, covering its connotations, circulation period, causes of issuance, issuing authorities, and monetary functions. This comprehensive analysis depicted modern Chinese society’s transition from an era of highly prosperous freely issued currencies to a state-monopoly credit issuance system, revealing the challenges in realizing Hayek's ideal of solving economic crises through “competitive currency issuance”.

Professor Dai noted that unauthorized notes held a significant position throughout the development of China's currency movement, predominantly spanning three stages: the Daoguang-Xianfeng periods, the Taiping Heavenly Kingdom- the early years of the Republic of China, and the Republic of China period. The emergence of unauthorized notes stemmed from five primary reasons: transaction demands in the lower market, severe shortage in currency supply, significant inflation in national currencies, tools for private merchants' profits, and local autonomy during the Republic of China period. The widespread circulation of unauthorized notes primarily resulted from the development of China's modern commodity economy, secondary to defects within the monetary system, and was closely linked to political disunity. The fundamental cause lay in the feudal or semi-feudal nature of the economy.

Translated by Zhang Yao