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The Currency of Politics: The Political Theory of Money from Aristotle to Keynes
Money in the history of political thought, from ancient Greece to the Great Inflation of the 1970s
In the wake of the 2008 financial crisis, critical attention has shifted from the economy to the most fundamental feature of all market economies―money. Yet despite the centrality of political struggles over money, it remains difficult to articulate its democratic possibilities and limits. The Currency of Politics takes readers from ancient Greece to today to provide an intellectual history of money, drawing on the insights of key political philosophers to show how money is not just a medium of exchange but also a central institution of political rule.
Money appears to be beyond the reach of democratic politics, but this appearance―like so much about money―is deceptive. Even when the politics of money is impossible to ignore, its proper democratic role can be difficult to discern. Stefan Eich examines six crucial episodes of monetary crisis, recovering the neglected political theories of money in the thought of such figures as Aristotle, John Locke, Johann Gottlieb Fichte, Karl Marx, and John Maynard Keynes. He shows how these layers of crisis have come to define the way we look at money, and argues that informed public debate about money requires a better appreciation of the diverse political struggles over its meaning.
Recovering foundational ideas at the intersection of monetary rule and democratic politics, The Currency of Politics explains why only through greater awareness of the historical limits of monetary politics can we begin to articulate more democratic conceptions of money.
In the wake of the 2008 financial crisis, critical attention has shifted from the economy to the most fundamental feature of all market economies―money. Yet despite the centrality of political struggles over money, it remains difficult to articulate its democratic possibilities and limits. The Currency of Politics takes readers from ancient Greece to today to provide an intellectual history of money, drawing on the insights of key political philosophers to show how money is not just a medium of exchange but also a central institution of political rule.
Money appears to be beyond the reach of democratic politics, but this appearance―like so much about money―is deceptive. Even when the politics of money is impossible to ignore, its proper democratic role can be difficult to discern. Stefan Eich examines six crucial episodes of monetary crisis, recovering the neglected political theories of money in the thought of such figures as Aristotle, John Locke, Johann Gottlieb Fichte, Karl Marx, and John Maynard Keynes. He shows how these layers of crisis have come to define the way we look at money, and argues that informed public debate about money requires a better appreciation of the diverse political struggles over its meaning.
Recovering foundational ideas at the intersection of monetary rule and democratic politics, The Currency of Politics explains why only through greater awareness of the historical limits of monetary politics can we begin to articulate more democratic conceptions of money.
344 pages, Hardcover
Published May 24, 2022
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January 16, 2023
Stefan Eich picked the perfect time to write about the political theory of money. Eich’s many years of research into the topic culminated in this book, The Currency of Politics, which is a breath of fresh air at a time when political contestation of the nature of money and monetary policy is at its highest point in decades. The monetary ‘interregnum’ (in the words of Eric Helleiner) that we are living through requires more than empirical or policy focused work, but also a rethinking of the categories which shape our understanding of the global monetary system.
Eich’s book is first and foremost a work of the history of political thought. This is really not my area, but mostly he uses the ideas of the thinkers he includes (Aristotle, Locke, Fichte, Marx & Keynes) to illustrate important ideas about our current monetary environment, rather than solely looking at their work in historical terms. The work of these theorists is contextualised in the different eras of monetary crisis which they lived through - a central point of Eich’s work is that crises almost always precipitate a rethinking of our ideas about money, whether that is Locke and the recoinage of the 17th century or Keynes and the interwar crises.
The overarching theme of the book is that money is a peculiar sort of social construction - an inherently political creation (in the widest sense of the term), which is purposely forgotten about through a ‘politics of monetary depoliticisation’. This sounds complex, but it isn’t really. Since the time of Aristotle, theorists have recognised that money is not merely a unit of exchange, but a social relation within and across societies. While commodity theorists have tried to tie money’s value to that of gold and silver, in reality it is money’s suspension ‘between violence and trust’ that gives it its value. While this potential of money is recognised by all the theorists Eich discusses, many sought to encase the power of money away from society - the most famous case being John Locke’s insistence on tying the pound to gold, not because gold is the essence of money’s value, but because it would remove the discretionary power of sovereigns over the money system.
Eich expertly traces money’s political malleability through the works of these theorists, but also through the distinct historical eras which they represent. As he emphasises, the viewpoints of the thinkers don’t simply represent opposing camps which we can ally ourselves with by declaring to be a Lockean, Keynesian or Marxist, but in fact are differing emphases on how to respond to the fluid nature of money. Therefore readers can see why there may be good reason to want to restore the value and stability of the currency (Locke), or to use currency to stabilise society as a whole (Keynes and Fichte), or perhaps even that meddling with the monetary order is futile without altering the sphere of production first (Marx).
In the end, what we are left with is a deeper understanding of how money is always politically constituted, leaving its absence from any sort of democratic deliberation to seem strange. As Eich points out, it’s likely undesirable to have money as a purely democratic element of our society - this likely would actually lead to the inflationary spiral that libertarians accuse any sort of political control of money of causing. As many in civil society have stressed since the covid-19 pandemic however, why couldn’t we have public deliberation about the ethical and social trade offs of how our monetary system and policies are run? In a world in which there is not a single correct way for a monetary system to be run, considerations of justice and equality could feature alongside efficiency and stability as key goals of monetary policy.
Eich’s writing is clear and he explains the often opaque works of his chosen theorists expertly. I’m not a huge fan of historical work on political theory, so the fact that I enjoyed the book says a lot about its quality. What was missing, I think, was a chapter on pure commodity theorists or gold bugs and why it’s so clearly wrong in Eich’s view. I understand that these views have a lot less theoretical consistency compared with the theorists which Eich included, however, it would really help understanding of one of the biggest barriers to greater public acceptance of the political malleability of money. Anyone who has ever seen the replies on Twitter to anything related to monetary policy will know what I’m talking about.
This is a work of top class political theory and hopefully is the beginning of a proliferation of conceptual and theoretical work on money and its inherent choices, as Eich explicitly states he is trying to encourage this with his work.
Eich’s book is first and foremost a work of the history of political thought. This is really not my area, but mostly he uses the ideas of the thinkers he includes (Aristotle, Locke, Fichte, Marx & Keynes) to illustrate important ideas about our current monetary environment, rather than solely looking at their work in historical terms. The work of these theorists is contextualised in the different eras of monetary crisis which they lived through - a central point of Eich’s work is that crises almost always precipitate a rethinking of our ideas about money, whether that is Locke and the recoinage of the 17th century or Keynes and the interwar crises.
The overarching theme of the book is that money is a peculiar sort of social construction - an inherently political creation (in the widest sense of the term), which is purposely forgotten about through a ‘politics of monetary depoliticisation’. This sounds complex, but it isn’t really. Since the time of Aristotle, theorists have recognised that money is not merely a unit of exchange, but a social relation within and across societies. While commodity theorists have tried to tie money’s value to that of gold and silver, in reality it is money’s suspension ‘between violence and trust’ that gives it its value. While this potential of money is recognised by all the theorists Eich discusses, many sought to encase the power of money away from society - the most famous case being John Locke’s insistence on tying the pound to gold, not because gold is the essence of money’s value, but because it would remove the discretionary power of sovereigns over the money system.
Eich expertly traces money’s political malleability through the works of these theorists, but also through the distinct historical eras which they represent. As he emphasises, the viewpoints of the thinkers don’t simply represent opposing camps which we can ally ourselves with by declaring to be a Lockean, Keynesian or Marxist, but in fact are differing emphases on how to respond to the fluid nature of money. Therefore readers can see why there may be good reason to want to restore the value and stability of the currency (Locke), or to use currency to stabilise society as a whole (Keynes and Fichte), or perhaps even that meddling with the monetary order is futile without altering the sphere of production first (Marx).
In the end, what we are left with is a deeper understanding of how money is always politically constituted, leaving its absence from any sort of democratic deliberation to seem strange. As Eich points out, it’s likely undesirable to have money as a purely democratic element of our society - this likely would actually lead to the inflationary spiral that libertarians accuse any sort of political control of money of causing. As many in civil society have stressed since the covid-19 pandemic however, why couldn’t we have public deliberation about the ethical and social trade offs of how our monetary system and policies are run? In a world in which there is not a single correct way for a monetary system to be run, considerations of justice and equality could feature alongside efficiency and stability as key goals of monetary policy.
Eich’s writing is clear and he explains the often opaque works of his chosen theorists expertly. I’m not a huge fan of historical work on political theory, so the fact that I enjoyed the book says a lot about its quality. What was missing, I think, was a chapter on pure commodity theorists or gold bugs and why it’s so clearly wrong in Eich’s view. I understand that these views have a lot less theoretical consistency compared with the theorists which Eich included, however, it would really help understanding of one of the biggest barriers to greater public acceptance of the political malleability of money. Anyone who has ever seen the replies on Twitter to anything related to monetary policy will know what I’m talking about.
This is a work of top class political theory and hopefully is the beginning of a proliferation of conceptual and theoretical work on money and its inherent choices, as Eich explicitly states he is trying to encourage this with his work.
June 23, 2022
After reading both of Adam Tooze's most recent books, and now this book which was recommended by Tooze by way of his periodic "Chartbook" posts, I am fully convinced of the importance of exposing the fraud that money and finance are apolitical. Money is not a neutral medium of exchange, and the fiction that it is makes up a big chunk of what is killing us.
Indeed, it may well be that our fumbling understanding of the nature of money comes closer to explaining the rise of neo-fascist so-called "populism" than all the myriad other explanations, convincing though those explanations may remain.
It's the right [Republican, in America] which mostly seems to need the enlightenment provided by this book. And yet some among them were the only ones who cautioned us not to refund the crooked banks. They caution us about social media, while the Dems seem to think all tech is good tech.
The persistent hoi polloi for Trump must feel justified in their anger, despite the inexcusable nature of their behaviors. They have been dispossessed of something, as have we all. Their vague sense that the thief is contained somehow within the cloud of the privileged elite, which most certainly includes the perennial political players, feels justified. But this book shows that historically, this is the process that has always allowed autocrats to insert themselves into more legitimate politics.
And for sure, the mainstream media represents the interests of that same elite. Many of us even suppose that it is the elites who keep the system going. And many of us aren't wrong. The question is who they keep it going for. We should all demand clarity about that; it won't be coming from the mainstream media. It sure won't be coming from Fox News. You have to do the work of finding out. You have to read something more than socially mediated posts and the infotainment which still defines broadcast news.
For instance, read this book! Let's all stop hitting the anger buttons all the time, left and right. Let's turn our anger into positive action.
There are still tiers, if not classes, within this elite. At the top are the hyperwealthy, which include "vectorialist" (McKenzie Wark) media owners. Below that are the stars, the anchors; the well-coifed talking heads and CGI-corrected beauties. And then there are the academics, channeled by media reporters, who all still appreciate the finer things of life.
Never mind that those who occupy the coarser side of life might be as rich, have even better cleavage, and most certainly include plenty among the hyperwealthy. The elites on the right are simply better at pandering to motorized outdoorspeople with guns. Trouble for me is that I still like those people most of the time. I'm sick of stupid generalizations.
There are true believers in meritocracy on either side. Merit wants a neutral measure. One thing which binds all sides together is a strange notion that wealth is an indicator of merit. That notion is only newly strange, and its identification as such owes a massive debt to Eich and his mentor Tooze.
We, the hoi polloi are now almost precisely divided between urban and rural [mentalities] when it comes to political taking sides. And that in turn sometimes seems increasingly about race. To categorize people based on race is, of course, precisely as misguided as is the supposition that money is neutral. This idiocy is now measurable precisely by wealth gaps.
The political neutrality of money reminds me of other false measures which are thought to be neutral, like IQ or I don't know, let's say beauty again. These things are all related to cultural and social norms, and reflect collective preferences. By reading these books, one learns that money is as normative as is language or law. Part nature and mostly culture.
One learns that credit markings come before money, just as they come before writing. One learns that coinage was meant to help with justice. That currency is basic to politics. One makes a lot of puns to oneself while reading. (Thank the author for not making them for you)
Anyhow, it's the economic contortions and distortions combined with political failure to understand how money works that have historically led up to various political crises, especially during the twentieth century with its two great global world-war convulsions.
And here we are now, once again politically paralyzed in the face of unprecedented stressors and global convulsing. As the arguments have it in these books, part of our paralysis descends from our failure to agree about what money really is. We remain, for the moment, in a nuclear stalemate, on an angry planet. Myriad sorts of media tell us all about it without helping us to know what to do.
Like a lot of people, I'm sure, I tend to identify the idiocies of bitcoin and the injustices of startup culture with a kind of naive libertarian ideology, which would include libertarian economics. I think it would be correct to put the mistaken notion of neutral money squarely on the backs of these libertarians. Their artificial gold lacks only the incorruptible beauty of the real stuff. We need the state involved now more than ever.
But now I read a different libertarian tract by a different Stephan with a different spelling -Stephan Kinsella - Against Intellectual Property which calls intellectual property theft just like Abbie Hoffman once did. And I realize that these new age libertarian startup code kiddies can't be libertarians, since they all think they're so smart and deserve their wealth on the basis of intellectual property law. Once they hire a grown-up to run their companies, once they go "public". But this Kinsella dude insists that you can't own your own labor, and we already agree that you can't patent or copyright an idea; only its material manifestation. Open the source, baby, open source.
We have the wrong idea about money. Money is a creation of politics, and it's therefore about power. Duh. Nobody argues that it's not a measure of power. But the power of money is not justified. It has to be justified politically, and that would mean that the state as owned by we the people has to do more than just to regulate the banks to which we delegate the power to create money by means of credit. We have to do more than to regulate the market.
Nobody argues against a market economy anymore. But we need to argue against capitalism all the time, and especially against the vectorialism which has supplanted it, which means that we have to tax and limit private wealth so that it remains in proportion to public need. In part, this seems to mean that we have to once again limit bank lending to the use of money that they, the banks, already have and hold. Savings and loan and collateral and so-forth. And give the citizenry accounts in the Fed, to be administered by the post office.
For instance. I'm summing up a conjecture made toward the end of the book.
We almost sort-of did that during the pandemic and the crash which came before it. We created money from nothing to rescue the profligate banks and to resupply the global denomination in dollars during the crash. And we did it all over again during the pandemic, having greased the wheels the first time.
What we failed to do is to change the rules so that the wealthy didn't profit from disaster, as they typically or even always seem to do. Will it take another world war? Some people seem to think that WWIII has already started.
Shouldn't we have an economic revolution instead? Eat the rich! They're always on their own side, no matter the politics or how they vote. We the people should stop yelling at each other and making each other miserable by way of unaccountable social media. We should just plain rise up. The Chinese can't do that anymore, even though it's in their national anthem. But we still can.
We need to channel all that Trumper energy in a more positive direction, right? This book suggests a way to start.
Indeed, it may well be that our fumbling understanding of the nature of money comes closer to explaining the rise of neo-fascist so-called "populism" than all the myriad other explanations, convincing though those explanations may remain.
It's the right [Republican, in America] which mostly seems to need the enlightenment provided by this book. And yet some among them were the only ones who cautioned us not to refund the crooked banks. They caution us about social media, while the Dems seem to think all tech is good tech.
The persistent hoi polloi for Trump must feel justified in their anger, despite the inexcusable nature of their behaviors. They have been dispossessed of something, as have we all. Their vague sense that the thief is contained somehow within the cloud of the privileged elite, which most certainly includes the perennial political players, feels justified. But this book shows that historically, this is the process that has always allowed autocrats to insert themselves into more legitimate politics.
And for sure, the mainstream media represents the interests of that same elite. Many of us even suppose that it is the elites who keep the system going. And many of us aren't wrong. The question is who they keep it going for. We should all demand clarity about that; it won't be coming from the mainstream media. It sure won't be coming from Fox News. You have to do the work of finding out. You have to read something more than socially mediated posts and the infotainment which still defines broadcast news.
For instance, read this book! Let's all stop hitting the anger buttons all the time, left and right. Let's turn our anger into positive action.
There are still tiers, if not classes, within this elite. At the top are the hyperwealthy, which include "vectorialist" (McKenzie Wark) media owners. Below that are the stars, the anchors; the well-coifed talking heads and CGI-corrected beauties. And then there are the academics, channeled by media reporters, who all still appreciate the finer things of life.
Never mind that those who occupy the coarser side of life might be as rich, have even better cleavage, and most certainly include plenty among the hyperwealthy. The elites on the right are simply better at pandering to motorized outdoorspeople with guns. Trouble for me is that I still like those people most of the time. I'm sick of stupid generalizations.
There are true believers in meritocracy on either side. Merit wants a neutral measure. One thing which binds all sides together is a strange notion that wealth is an indicator of merit. That notion is only newly strange, and its identification as such owes a massive debt to Eich and his mentor Tooze.
We, the hoi polloi are now almost precisely divided between urban and rural [mentalities] when it comes to political taking sides. And that in turn sometimes seems increasingly about race. To categorize people based on race is, of course, precisely as misguided as is the supposition that money is neutral. This idiocy is now measurable precisely by wealth gaps.
The political neutrality of money reminds me of other false measures which are thought to be neutral, like IQ or I don't know, let's say beauty again. These things are all related to cultural and social norms, and reflect collective preferences. By reading these books, one learns that money is as normative as is language or law. Part nature and mostly culture.
One learns that credit markings come before money, just as they come before writing. One learns that coinage was meant to help with justice. That currency is basic to politics. One makes a lot of puns to oneself while reading. (Thank the author for not making them for you)
Anyhow, it's the economic contortions and distortions combined with political failure to understand how money works that have historically led up to various political crises, especially during the twentieth century with its two great global world-war convulsions.
And here we are now, once again politically paralyzed in the face of unprecedented stressors and global convulsing. As the arguments have it in these books, part of our paralysis descends from our failure to agree about what money really is. We remain, for the moment, in a nuclear stalemate, on an angry planet. Myriad sorts of media tell us all about it without helping us to know what to do.
Like a lot of people, I'm sure, I tend to identify the idiocies of bitcoin and the injustices of startup culture with a kind of naive libertarian ideology, which would include libertarian economics. I think it would be correct to put the mistaken notion of neutral money squarely on the backs of these libertarians. Their artificial gold lacks only the incorruptible beauty of the real stuff. We need the state involved now more than ever.
But now I read a different libertarian tract by a different Stephan with a different spelling -Stephan Kinsella - Against Intellectual Property which calls intellectual property theft just like Abbie Hoffman once did. And I realize that these new age libertarian startup code kiddies can't be libertarians, since they all think they're so smart and deserve their wealth on the basis of intellectual property law. Once they hire a grown-up to run their companies, once they go "public". But this Kinsella dude insists that you can't own your own labor, and we already agree that you can't patent or copyright an idea; only its material manifestation. Open the source, baby, open source.
We have the wrong idea about money. Money is a creation of politics, and it's therefore about power. Duh. Nobody argues that it's not a measure of power. But the power of money is not justified. It has to be justified politically, and that would mean that the state as owned by we the people has to do more than just to regulate the banks to which we delegate the power to create money by means of credit. We have to do more than to regulate the market.
Nobody argues against a market economy anymore. But we need to argue against capitalism all the time, and especially against the vectorialism which has supplanted it, which means that we have to tax and limit private wealth so that it remains in proportion to public need. In part, this seems to mean that we have to once again limit bank lending to the use of money that they, the banks, already have and hold. Savings and loan and collateral and so-forth. And give the citizenry accounts in the Fed, to be administered by the post office.
For instance. I'm summing up a conjecture made toward the end of the book.
We almost sort-of did that during the pandemic and the crash which came before it. We created money from nothing to rescue the profligate banks and to resupply the global denomination in dollars during the crash. And we did it all over again during the pandemic, having greased the wheels the first time.
What we failed to do is to change the rules so that the wealthy didn't profit from disaster, as they typically or even always seem to do. Will it take another world war? Some people seem to think that WWIII has already started.
Shouldn't we have an economic revolution instead? Eat the rich! They're always on their own side, no matter the politics or how they vote. We the people should stop yelling at each other and making each other miserable by way of unaccountable social media. We should just plain rise up. The Chinese can't do that anymore, even though it's in their national anthem. But we still can.
We need to channel all that Trumper energy in a more positive direction, right? This book suggests a way to start.
March 8, 2023
4.5 Stars – Original thought on an important topic. Addressed from a unique perspective, at the right point in time. Could’ve benefitted from simpler language.
January 14, 2024
Stefan Eich’s “The Currency of Politics” is an educated and complete journey around the world of the political theory of money, providing a deep reading of an historically broad set of authors, including Aristotle, John Locke, Johann Fichte, Karl Marx, J M Keynes and Friedrich Hayek.
When reading this book, one can’t help but feel like Phileas Fogg traveling through the authors who tried to provide a political view of the monetary phenomenon. Thus, Eich competently provides a portrait of the main questions and debates on the management of money, always with an eye on its political reading.
However, in the epilogue, the Author moves to another dimension, by trying to provide and sustain a set of proposals to “democratize” money, in line with certain trendy movements. In this sense, the Author proposes, e.g., that central banks should mirror society’s “segments” representation in its governing bodies and should move further with transparency and disclosure of their decision-making process.
These proposals reveal, in my opinion, the major shortcoming of the book - it was written by an highly-educated scholar on the political theory of money, but with little to none insight into the specific subject of central banking.
In a nutshell, I would resume this shortcoming in three topics.
First, central banking management, due to its sensible, complex and technical nature, cannot be decoupled from a principle of competence, which is the antithesis of the democratic principle.
Second, central banks operate in the context of a market economy (regarding the ECB, this is expressly established in the TFEU, e.g.), and cannot disregard this context. A practice of full disclosure, which would look away from an important part of central banking - signalling - would represent a menace to financial and economic stability.
Finally, the Author disregards and undervalues the important steps undertaken by central banking in latter years regarding transparency and disclosure, something which is quite serious, because they are referenced in the book, at least regarding the FED.
However, these important steps - from press conferences to minutes’ disclosure and judicial review (for the ECB, bear in mind the ‘Gauweiler’ and ‘Weiss’ rulings) cannot be disregarded, and depict the necessary evolution performed by central banks, at the prudent and convenient pace not to shake financial stability.
When reading this book, one can’t help but feel like Phileas Fogg traveling through the authors who tried to provide a political view of the monetary phenomenon. Thus, Eich competently provides a portrait of the main questions and debates on the management of money, always with an eye on its political reading.
However, in the epilogue, the Author moves to another dimension, by trying to provide and sustain a set of proposals to “democratize” money, in line with certain trendy movements. In this sense, the Author proposes, e.g., that central banks should mirror society’s “segments” representation in its governing bodies and should move further with transparency and disclosure of their decision-making process.
These proposals reveal, in my opinion, the major shortcoming of the book - it was written by an highly-educated scholar on the political theory of money, but with little to none insight into the specific subject of central banking.
In a nutshell, I would resume this shortcoming in three topics.
First, central banking management, due to its sensible, complex and technical nature, cannot be decoupled from a principle of competence, which is the antithesis of the democratic principle.
Second, central banks operate in the context of a market economy (regarding the ECB, this is expressly established in the TFEU, e.g.), and cannot disregard this context. A practice of full disclosure, which would look away from an important part of central banking - signalling - would represent a menace to financial and economic stability.
Finally, the Author disregards and undervalues the important steps undertaken by central banking in latter years regarding transparency and disclosure, something which is quite serious, because they are referenced in the book, at least regarding the FED.
However, these important steps - from press conferences to minutes’ disclosure and judicial review (for the ECB, bear in mind the ‘Gauweiler’ and ‘Weiss’ rulings) cannot be disregarded, and depict the necessary evolution performed by central banks, at the prudent and convenient pace not to shake financial stability.
September 6, 2022
If you have ever found it strange that central banking with all its weight and far reaching effects is run independently from any governmental body (clearly there are a few notable examples where this is not true) then this is a great book for you. Stefan offers a history of monetary theory and a subsequent manifesto into how and why we should integrate monetary theory into our political discourse.
This book took me a while to finish. Not least because at every page I would get caught down a rabbit hole. As far reaching as this book is in scope it is possible to go so much deeper. One key concept which I would love to have been explored in greater detail is the state. A concept which feels too narrowly captured here. When Fichte argues that it is only through the will of the state that money has value and Locke argues that money must be protected from the state (sovereign) the concept of money and value feel fairly fleshed out, but there is little understanding of what the state means.
At the time of reading, Liz Truss had just announced her intention to question the independence of the Bank of England. Fantastic! Politics grasping monetary policy by the throat. But it’s the precarity of the state that makes this a much scarier proposition than it should be (similar to most peoples reaction when Trump tried to force the hand of the FED years ago).
But these are also not reasons to stop deliberation on the matter, we are not going to solve for state fragility tomorrow. Even if not being directly integrated, monetary policy has to bear the full weight of its political consequences (what was the true cost of Volker’s actions in the last inflation fight) and this book is the perfect start.
This book took me a while to finish. Not least because at every page I would get caught down a rabbit hole. As far reaching as this book is in scope it is possible to go so much deeper. One key concept which I would love to have been explored in greater detail is the state. A concept which feels too narrowly captured here. When Fichte argues that it is only through the will of the state that money has value and Locke argues that money must be protected from the state (sovereign) the concept of money and value feel fairly fleshed out, but there is little understanding of what the state means.
At the time of reading, Liz Truss had just announced her intention to question the independence of the Bank of England. Fantastic! Politics grasping monetary policy by the throat. But it’s the precarity of the state that makes this a much scarier proposition than it should be (similar to most peoples reaction when Trump tried to force the hand of the FED years ago).
But these are also not reasons to stop deliberation on the matter, we are not going to solve for state fragility tomorrow. Even if not being directly integrated, monetary policy has to bear the full weight of its political consequences (what was the true cost of Volker’s actions in the last inflation fight) and this book is the perfect start.
June 29, 2022
This book was one of my quicker reads this year despite being academic in several places, probably because its two major themes, monetary theory and its contemporary political (Enlightenment onward) history, have intrigued me for some time now. While I’m not the biggest fan of political theory, as a matter of principle, Eich’s book is erudite, deftly written, and quite accessible.
I’ll post a more detailed review as I slowly revisit its ideas and their connections to issues I really care about: reducing inequality; better funding for natural sciences and philosophy; developing a more virtuous elite; designing markets where capital is allocated for the probably approximately correct version of common good rather than the one determined by a coterie of 25 year old VC money addled brains.
I’ll post a more detailed review as I slowly revisit its ideas and their connections to issues I really care about: reducing inequality; better funding for natural sciences and philosophy; developing a more virtuous elite; designing markets where capital is allocated for the probably approximately correct version of common good rather than the one determined by a coterie of 25 year old VC money addled brains.
January 1, 2023
very confident this will become a primer in the field of political economy. a topic which has been shelved and gathered a thick layer of dust, the politics of money and its accompanying language are plotted and mapped as a cartographer would perform his duties. the author himself describes his effort as one akin to a geographer's labor, demarcating the accumulated layers of soil previous thinkers build. but i'd say it's much more ambitious than just a genealogy or typology of money: the final chapter is revelatory of this, giving a sweeping history of the past 50 years and an outlook to the future.
(don't look at the fact it took me 4 months to complete it, i ditched it after 2 days of reading and finished it this past week.)
(don't look at the fact it took me 4 months to complete it, i ditched it after 2 days of reading and finished it this past week.)
March 12, 2023
A good book, providing a detailed history of money as a political, vice solely an economic or financial, tool. The author, political science professor Stefan Eich, delivers a detailed history of money from the political economic perspective. Working his way through Aristotle, Locke, Smith, Marx, Keynes, Hayek, and a slew of other philosophers, economists, and politicians, Eich provides a detailed understanding of money and it’s place in western political thought. He follows the ebb and flow of money as it continually transitions from a politicized issue with wide societal appreciation to a depoliticized economic tool only understood by a small segment of society. In the process, Eich summarizes the larger historical commentary over the interaction between the political structures of societies and the markets, especially financial ones, which play such a strong role in those societies. I learned a lot about the history of finance and gained a better appreciation of the antecedents to the Keynes-Hayek debate. A great book for understanding the role of money and it’s interaction with politics, especially in democratic societies.
March 9, 2023
Money is everywhere but we rarely think about its nature. Eich takes his readers on a journey through the intellectual history of money. Aristotle, John Locke, Johann Gottlieb Fichte, Karl Marx, and John Maynard Keynes (and indirectly Hayek) are the main actors. He describes how depoliticisation of money is in fact a political program. Throughout times, money moved outside of the interest of political theorists, and became a separate area of expertise, controlled by technocrats.
The first part of the book was a pain to read. I wasn't that interested in the etymology of Greek terms of money and what Aristotle thought about. It seemed too far from the current experience. I felt similarly about the chapters on Locke and Fichte. Only when Marx and Keynes were the main focus, I felt that I can understand the topic and its relevance. The culmination of the book was a description of the post-WW2 arrangements (Bretton Woods and its fall), and our current interregnum period when new forms of money/monetary control are being developed. The book ends with a call for more democratic control over money (power to issue it) and monetary policy (bringing democratic control to central banks that are mainly free from direct political control).
The first part of the book was a pain to read. I wasn't that interested in the etymology of Greek terms of money and what Aristotle thought about. It seemed too far from the current experience. I felt similarly about the chapters on Locke and Fichte. Only when Marx and Keynes were the main focus, I felt that I can understand the topic and its relevance. The culmination of the book was a description of the post-WW2 arrangements (Bretton Woods and its fall), and our current interregnum period when new forms of money/monetary control are being developed. The book ends with a call for more democratic control over money (power to issue it) and monetary policy (bringing democratic control to central banks that are mainly free from direct political control).
January 3, 2024
Excellent livre qui permet de bien contextualiser le dilemme entre "discrétion" et "discipline" auquel est confrontée la politique monétaire. Avec d'un côté l'étalon or qui offre un système sur "discipliné" qui découle dans un risque élevé de déflation qui lors de crise (guerre) finit par devoir être levée au prix de comprendre que ce système n'est finalement pas si discipliné ou maintenu, mais au prix d'une augmentation du chômage. La version plus moderne offrant davantage de discrétion, mais au risque de nourrir de l'inflation.
Une version plus démocratique et disciplinée par un encadrement de type constitutionnel (de ce cinquième pouvoir?) est probablement la voie philosophique à suivre afin de trouver l'alternative pratique à un modèle actuel non démocratique qui nourrit les inégalités. Une histoire que l'auteur nous raconte à l'aide de plusieurs penseurs marquants.
Une question qu'y m'est venu en finissant ce livre est de savoir si nous avons les connaissances nécessaires en économie pour "constitutionnaliser" la politique monétaire?
Une version plus démocratique et disciplinée par un encadrement de type constitutionnel (de ce cinquième pouvoir?) est probablement la voie philosophique à suivre afin de trouver l'alternative pratique à un modèle actuel non démocratique qui nourrit les inégalités. Une histoire que l'auteur nous raconte à l'aide de plusieurs penseurs marquants.
Une question qu'y m'est venu en finissant ce livre est de savoir si nous avons les connaissances nécessaires en économie pour "constitutionnaliser" la politique monétaire?
September 10, 2023
a rather superficial progressive/lefty rant to 'democratize' money, without ever explaining: 1) what 'democratization' of money even means, 2) why 'democratizing' money wold be better that the status quo or even even desirable (it just assumes that it must be so), 3) no serious analysis of the potential dangers of 'democratizing' and 'politicizing' money. I invite to the author to go to southamerica and take a look at their moneys that are heavily 'democratize' and see if that normative vision holds ground in reality. This book is just a superficial rant about a pseudo-ideal love for 'democratizing' everything without any serious thought of the dangers and potential costs. Very shaky progressive daydreaming, with dangerous consequences.
November 22, 2022
rarely felt so enlightened!
This is a book on money and our historical political thought. The books genealogical approach brought at least me out on thin ice, and have forced me (in a good way) to think more about money and in particular banking. The strength of the book is also that opens up reflections and questions without coming with an easy solution.
This is a book on money and our historical political thought. The books genealogical approach brought at least me out on thin ice, and have forced me (in a good way) to think more about money and in particular banking. The strength of the book is also that opens up reflections and questions without coming with an easy solution.
October 5, 2023
The ratio of political theory / commentary to history was too high. Too much “reconstructing his argument and putting it in conversation with”, “depoliticization is just dedemocratization”, “social relations,” and other vague language. I skipped most of the political theorist commentary. But the stories were good esp about Locke starting out as a monetary theorist.
April 28, 2023
An intriguing and clear eyed look at the history of money and how it is treated politically (or not).
My only complaint is that footnotes and asides were buried in with the citations, making navigating the book quite a slog.
My only complaint is that footnotes and asides were buried in with the citations, making navigating the book quite a slog.
Want to read
November 26, 2022Jeremy recommended
January 8, 2023
Plenty to disagree with, but taken as a whole, a well written and reasoned polemic.
February 8, 2024
Dude writes a book on money and politics and there are not even 2 paragraphs on Bitcoin. Another example of courtly philosophy and ideological justification of the status quo. NGMI.
Read
August 15, 2022Great read for anyone interested in monetary theory (or, more precisely, a genealogy of political thought around money). I got a lot out of the first several sections dealing with Aristotle, Locke, & Fichte's conceptions of money, in particular, as I was less familiar with them. Very nuanced and careful interpretation of different philosophical stances was much appreciated. Unlike a lot of texts around monetary theory, I suspect this one will age quite well.
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