Money Parables

tags

Modern Monetary Theory

Notes

money is “a creature of the state.”

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credit money tradition, which sees money’s origins in reciprocal obligations between producers.

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Market societies use narratives to justify the social technology called money.

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the notion of saleability to explain money’s origins. In Menger’s theory, trial and error teaches producers to exchange their goods for those commodities that are easiest to sell

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money emerges as the “most saleable” commodity

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describe money as merely a token devised by the state.

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Keynes saw the state’s role not only in enforcing money contracts, but, crucially, in the right to define what counts as money.

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Commodity money stories suffer from a similar chicken-egg problem: Smith and Menger each take as given the existence of well-developed domestic markets. But would these markets exist before money was around to enable them?

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money is “merely a Right or Title to acquire some satisfaction from some one else, i.e., a Credit.”

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merchants just exchange IOUs. As long as “the community would recognize the obligation of the baker and the brewer to redeem these acknowledgments in bread or beer at the relative values current in the village market,” we have “a good and sufficient currency.”

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money’s true origins “are lost in the mists when the ice was melting

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monetary systems require “naturalizing” narratives—stories that convince us that money is not just some flimsy social construct, but something solid and necessary.

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