Tuesday, March 26, 2013

A Review of Geoffrey Ingham's 'The Nature of Money'

This review appears on Amazon. Please pop over there and give me a 'like' if this review is useful to you. 

Ingham's book was first published in 2004, prior to the credit crunch of 2008 and before the birth of bitcoin. However, it would be a mistake to regard this work as anachronistic. The first 85 pages of the book, sectioned together as 'Concepts and Theories' is quite simply the best appraisal and review of theories of money that I've ever read. Ingham shows clearly the inconsistencies of thought that have riddled the various academic schools of thought on Money across the centuries. He explains how economics has claimed possession of the money phenomenon, which in turn has led the work of other disciplines, in particular sociology, to be neglected. Ingham does a brilliant job of explaining the important aspects of Simmel's work on money, and bringing into the light the work of Weber whose contribution seems to have been hidden in the shadow of his more famous work on the nexus of religion and capitalism. Ingham gives a penetrating critique of both the orthodox/Austrian view of Money and the Marxian view of Money. My only criticism of this first section is that it does not deal with the question of the difference between the terms currency and money. But this omission - I don't think Ingham sees any real difference between the terms - is not enough of a fault within the dynamic of the book for me not to award it 5 stars.
The second section of the book may be more problematic for some. Effectively Ingham endorses a view of Money akin to 'State Theory'. In 'History and Analysis' he gives his account of how Money is both born from and impacts upon social structures. He doesn't go quite as deeply as some anthropological texts do, in regard to the formation of indebted relations, but nevertheless provides a consistent and persuasive account of Money and power. His examination of the role of central banks is particularly strong. However, if you find that Inghman's emphasis on the role of the state grates against your libertarian or anarchist sensibilities, you'll find much to make you huff and puff in the second section of this book. What you won't be able to do though is make any claim as to a lack of rigor or consistency in Ingham's arguments. Indeed, his work challenges you to strengthen your own arguments.
For what its worth I do disagree with thrust of Ingham's argument. For me, there are fatal weaknesses in his non-differentiation of Money and currency, and in his (short) discussion of theories of value. I also think that the advent of Bitcoin creates questions which Ingham would find difficult to answer.  But, nevertheless this is one of the most important books written on Money in the noughties. It may not have the popular appeal of David Greaber's tome 'Debt', but at just over 200 pages it is both profound and succinct. Anyone claiming to understand economics should read it.

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