The Currency of Politics
First excerpts from Stefan Eich's "The Currency of Politics"
Preface, pp.xiii-xvii
money has an intimate relationship to time = a device for linking the present to the future (Keynes)
currency = a social solution to a temporal problem (Aristotle)
money = battlefield of conflicting conceptions of the future
crises = windows for making the previously unimaginable politically possible, indeed often necessary (moments of crises are marked by rupture and an openness to new ideas) <-> periods of calm continuously reproduce meaning based on repeated enactment
advent of modern public credit further accentuated this temporal quality of money: by establishing a network of claims that link the present to the future, a future that can be permanently deferred, public credit changed both the nature of the state and the relation of citizens to it
question not of de-politicisation/re-politicisation of money/central banking but of democratising the exercise of 'money power': both the power to create it and the power to rule it
Introduction, pp. 1-21
money = fragile political construct that has a history
neoliberal ascendency left a legacy of money as a seemingly depoliticised lever of scarcity <-> monetary responses to GFC & COVID-19 unraveled this illusion of money as neutral and apolitical and invisible
1st thesis: “money is a foundational institution of democratic self-rule”
2nd thesis: “money does not rise to the level of 'political currency': it all too easily can appear as naturalized or depoliticized.” -> disguising the political ramifications of the power to create money
linguistic impasse: lack of language to articulate fundamental questions of democratic monetary rule — “money's political dimension has become impossible to ignore, but our vocabulary for discussing the function and purpose of money is impoverished and intert.”
money creation = central to the configuration of monetary sovereignty
recent crises opened a window for democratic debate and brought to light struggles over the monetary imagination ranging from full-employment demands by MMT to visions of private cryptocurrencies beyond the state
origin stories of money often introduce the subject ambiguously: money matters as the essential commodity of convenience but is assumed at the same time as irrelevant (a neutral veil greasing the wheels of commerce) <-> misleading: pure barter economies did not exist, rather: sophisticated social systems of credit -> money = technology of credit existing as a social relation prior to the market // another origin story assumes its emergence not out of commerce but force:
“money is whatever one is forced to pay in taxes. [...] To avoid punishment for failing to pay taxes citizens need to obtain the government's currency. Rather than emerging out of equal exchange, money here instead measures the tax debts imposed under the threat of violence. [...] taxes exist because they allowed ancient rulers to create demand for their own tokens.” (chartalism)
money's political role and purpose:
“Modern money is indeed a legal creature that cannot be understood without reference to political power and authority, including the threat of force. But money also hangs by a thin thread of trust and collective belief that can be revoked at a stroke. By helping to constitute and perpetuate social values and relationships, money is not just derivative of political power, it is also inherently a source of power. Money has a political life of its own with a rich performative and communicative dimension.”
Eich's normative conception of money as political currency:= tool for democratic self-government requiring sustained legitimacy from within (not just output legitimacy achieved through price stability), i.e. authored by those affected by it
money as political currency marks also a normative aspiration: (1) acting as a reminder of the political possibilities of money and the ways in which political communities not only lay claim to govern the money circulating in them but also rely on money to govern themselves more justly (monetary policy has distributive implications and is thus contested and subject to intense political contestation due to broad effects on the distribution of wealth and power) ^ (2) acting as a tool of reciprocity to achieve civic relations among citizens (alongside law and civic speech): “money can help to create and maintain the preconditions for politics, especially democratic politics.” — as an essential tool for the formulation and pursuit of justice
bifurcation between orthodox theories of commodity money and heterodox theories of credit money “misses [...] the way in which disagreements about the nature of money often reflect underlying political disagreements about the purpose of money.” = political struggles over the purpose of money are not given the attention they deserve
emergence of modern monetary systems:
“modern capitalist money combines and entwines the two previously distinct monetary systems of state money and private monies. Capitalist money is in this sense characterised by the monetization of private debts through a banking system that is in turn backed by the state.”
the distinctive quality of capitalism lies precisely in the privatisation of modern money (Desan, Making Money, 434f)
janus-faced character of modern money: malleable constitutional project or a chrystallised private commodity?
“monetary trust does not simply imply the enforcement of existing contracts but the realization of a more fundamental, and more equitable, social contract that requires a sharing of sacrifices and benefits. [...] democratic society demands that the loser can trust that his or her loss is transient and not a persistent feature of society. In a democratic society monetary trust must be tied to a negotiation over justice. The absolute defense of price stability implies either a repression of democracy or a social hegemony so complete that the problem of justice is no longer posed.”
Sources:
[1] Eich, S. (2022) The Currency of Politics: The Political Theory of Money from Aristotle to Keynes, Oxford: Princeton University Press.