The Origins of the Credit Theory of Money

In Adam smith's day, it became possible to see the market as its own entirely independent sphere of human activity. This required laws and police, but also specific monetary policies which liberals like smith were successfully advocating. The century before, the wealth of nations had seen at least two attempts to create state supported central banks in france and sweden that had proven to be spectacular failures. It might be helpful then to consider what these alternative theories actually were, state and credit theories of money.