Henry Vaughan argues that it is the voluntary and “universal concurrence of mankind”, not the laws, which makes money acceptable as a medium of exchange (1675)
The English political economist McCulloch was a pioneer historian of economic thought. In his collection of English tracts on money he includes Henry Vaughan’s Discourse of Coin and Coinage (1675) which has an interesting discussion of how the "universal concurrence of mankind" is what makes money money:
But you will say, that gold coins, excepting the difference of colour, and of some other properties of the metals, have as much the appearance of money as silver coins: Granted; and so have copper coins too; and so might pewter ones, &c., but this is nothing to the purpose; it is not the mint, but the laws, and the universal concurrence of mankind, that make money.
John Ramsay McCulloch (1789-1864) was a follower of David Ricardo, the first professor of political economy at the University of London in 1828, and a pioneer in the collection of economic statistics and historical economic tracts. In 1856 he published two valuable collections of documents, one on commerce and the other on money. Henry Vaughan’s treatise comes from the latter. In it he makes the excellent point that money (in this case gold coins) emerges from a commonly agreed upon standard of exchange. He debates whether “the mint” (i.e. the government) or the “universal concurrence of mankind” is the more powerful force in inducing people to accept certain coins in order to make their sales and purchases. He seems to come down on the side of voluntary, popular acceptance by the users as the key factor. This is a similar theory to that developed by Ludwig von Mises in his 1912 work The Theory of Money and Credit, a cornerstone text in the development of the Austrian school of economics.