Democratizing Finance or Democratizing Money?

In: Politics & society, Volume 47, Issue 4, p. 635-650

Abstract

This article extends the critique of finance to money itself. It argues that our understanding of money has been distorted by a series of myths about its origin and nature, in particular, the claim that money emerged from the adoption of precious metal coinage in market systems. These myths obscure the social and political history of money and the role of states in money creation and circulation. Neoliberal ideology, by contrast, adopts a "handbag economics" that treats the state as a dependent household rather than an economic actor in its own right. An alternative view of money is put forward that sees money as a social and political construct and not just a passive reflection of market activity. It is argued that the sovereign power to create money should be recognized, reclaimed, and democratized as a public resource.