This morning I had the privilege of chairing a fascinating session at the Digital Money Forum run each year by Dave Birch of Consult Hyperion. The speakers were Professor George Selgin of the University of Georgia, and James Turk of the Gold Money Foundation. Both were arguing, from different perspectives, for private money as a competitor to government money.

Prof Selgin drew on his book Good Money, about the emergence of business-issued coinages in the early Industrial Revolution. It's a fascinating story, one I didn't know. The state didn't bother to issue any copper or silver coins, despite the demand fuelled by an economic revolution, so the private sector filled the vacuum. The episode, he says, disproves Gresham's Law about bad money driving out good. On the contrary, the good private moneys drove out the plentiful counterfeits that had previously circulated.

(It struck me that Gresham's Law is another example of the widespread fear of competition – people think competition reduces quality because it makes businesses cut-throat, even though time and again events show that it improves quality and choice. The kind of 'competition' that doesn't serve consumers is just oligopolistic rivalry.)

The conclusion: a government monopoly of cash is a bad thing. Without the private copper coins, some of the earliest of which were minted by Matthew Boulton, the Industrial Revolution couldn't have happened.

James Turk is a devotee of gold as the only source of true monetary value. His argument was that fiat paper currencies and governments' attachment to printing money to fund their activities in the end always debase their currency. It has to be said that there's a lot of evidence for this in the historical record, although I certainly think one can argue with his conclusion that “gold is special”.

The session was a highly literary one. In addition to the classic book by Tom Sargent and Francois Velde, The Big Problem of Small Change, other books cited were Money and the Mechanism of Exchange by William Stanley Jevons, Treatise on silver by John Locke, and Treatise on Money by J.M.Keynes. Unfortunately I could only attend one session but as ever the Digital Money Forum proved itself a must for anyone interested in the intersection of technology and money. (Which covers pretty much everything really….) The Digital Money Reader 2011 gives a flavour of its range – maybe Dave can send me the link when it's generally available.