Monday, March 18, 2013

Money Wisdom #105

"As it is constituted by real social relations, money is an active element in social life - in Weber's terms, a weapon, as I have constantly stressed. The attribution of real force and efficacy to money does not entail a metaphysical nominalism, or more prosaically in orthodox economics' terms, a 'money illusion'.  This appears to be the case only if the economic system is taken to comprise nothing of importance other than the 'real' exchange ratios of commodities produced by individual optimizing strategies of economic agents. But this weapon.... not only used despotically by the different interests in the constant economic struggle; it is also a collective resource - that is, infrastructural power. The advance of human society's organisational capacity has been accelerated by changes in the social production of money - most notably by the balance of power between money-capitalists and the state in early modern Europe. As Weber also concluded, capitalism, thrives on a delicate balance of its economic interests that prevents one group achieving monopoly dominance. He believed that too great a concentration of power in the hands of one class - labour, producers, rentiers, etc - would inhibit the dynamism of the struggle. Following the conception of money as a neutral medium in a frictionless system of economic exchange, the Maastricht Treaty attempted to de-commision the weapon. By doing so, the European Union has temporarily enfeebled itself. The logic of the situation suggests, but of course can never determine - that it regains the power only by placing its money in the hands of a sovereign body."

Geoffrey Ingham The Nature of Money (2004) p.196

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