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Money Has No Value
We need a new theory of money. The still-dominant theory of money as taught in intro textbooks is 100+ years old, and for almost that long we have known that it's totally wrong. The best alternative are "heterodox" accounts developed in the 90s and 00s. These are indeed better overall descriptions of money, but they remain incomplete and inadequate: they rely too much on why the orthodoxy is wrong, thereby incorrectly assuming there is only one alternative (so-called heterodoxy). Money has no value develops a new (more subtle, more sophisticated) theory of money. It takes more seriously than any other work to date, the depth and seriousness of the fundamental claim that all money is credit. Money is not a thing, but a marker of a social relation of credit and debt between two parties. Money is not value itself; no form of money (as money) ever possesses any positive, intrinsic value. Second, the book shows that not only is all money credit, but that in an important theoretical sense, all credit is money to the extent any credit/debt between two parties has the potential to be transferred to another party (thereby functioning as money). Finally, the book links this radical credit theory of money to today's concrete money practices: this includes global capital flows, national and international monetary policy, and most of all the daily turnover in the money markets. The book therefore develops the needed conceptual framework to ask questions like: what is going on with Bitcoin (much less GameStop) in 2021.
260 pages, ebook
Published September 15, 2023
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January 9, 2024
Really convincing and necessary book. Sure this will have a lasting impact on the MMT versus "sound money" debate, or in its academic chartalist versus money-as-commodity debate. Chambers draws from the heterodox theories of money (Innes-Knapp-Schumpeter-Keynes-Minsky-Ingham-Wray) but radicalizes it. By radicalizing the theoretical foundations of this intellectual tradition, he ends up at a point where he simultaneously criticizes that tradition.
First, he radicalizes the tradition by making a simple point clear: every money is credit, and every credit is money. I won't summarize his flow of arguments, but it's watertight. As a philosopher, that's what he's good at (and you'll just have to bear the occassional Heidegger reference to explain us what's important when you define something). With this, he pushes Ingham and Wray (the latest of the tradition) to their logical conclusions. They stubbornly held on to some kind of distinction between money and credit, but it doesn't hold water. And more: Chambers shows there's nothing to be afraid of! Chambers builds on the crticisms of Schumpeter and a radical reading of Innes to argue that there's only money-credit, and nothing more.
If there's only money-credit, all money is social, and all that money needs is a debtor, a creditor and a unit of account. With this conclusion, he is able to criticize that tradition, and this is where it was really interesting for me. Chambers argues that to say that money is always credit, implies nothing about the role of the state as the ultimate creditor. Chambers regrets the simple inversion heterodox theorists have done while criticizing the "orthodox" theories. The tradition refuted "the market" as the neutral originator of money, but has embraced the authority of the state all too easily when they tried to come up with an alternative theory of money. In essence, what Chambers is saying, is that it is true that all money is a social relation of credit, but that chartalists have a poor understanding of what that social relation is. It is not just the relation between the state and her subjects. In capitalism, the state has limited economic power, also on its power to decide on the flow of money and credit. To understand that social relation that constitutes money today, we need to understand the underlying social relations of capitalism. And that's more than just a state and her subjects. Unfortunately, Chambers stops there basically. He doesn't go into details what he thinks are those constitutive social relations that form money-credit today, but it does leave room for a value-theory to fill that up.
Therefore, this book lays the foundation for further research in Marxist monetary theories, beyond the criticisms of the chartalists. On this matter, it is clear that Chambers is well-informed on Marxist debates (he distinguishes de Brunhoff, the value form theorists, and "orthodox" Marxists for having different theories on money), but, as I indicated, he doesn't give us much further. I feel like this book will be an important book for Marxists like Lapavitsas to see if it would be compatible with (his interpretation of) Marxist monetary theory. In any case, this book has been much more helpful than all the Marxist critiques I've read so far on MMT in pinpointing the theoretical problems of chartalists.
First, he radicalizes the tradition by making a simple point clear: every money is credit, and every credit is money. I won't summarize his flow of arguments, but it's watertight. As a philosopher, that's what he's good at (and you'll just have to bear the occassional Heidegger reference to explain us what's important when you define something). With this, he pushes Ingham and Wray (the latest of the tradition) to their logical conclusions. They stubbornly held on to some kind of distinction between money and credit, but it doesn't hold water. And more: Chambers shows there's nothing to be afraid of! Chambers builds on the crticisms of Schumpeter and a radical reading of Innes to argue that there's only money-credit, and nothing more.
If there's only money-credit, all money is social, and all that money needs is a debtor, a creditor and a unit of account. With this conclusion, he is able to criticize that tradition, and this is where it was really interesting for me. Chambers argues that to say that money is always credit, implies nothing about the role of the state as the ultimate creditor. Chambers regrets the simple inversion heterodox theorists have done while criticizing the "orthodox" theories. The tradition refuted "the market" as the neutral originator of money, but has embraced the authority of the state all too easily when they tried to come up with an alternative theory of money. In essence, what Chambers is saying, is that it is true that all money is a social relation of credit, but that chartalists have a poor understanding of what that social relation is. It is not just the relation between the state and her subjects. In capitalism, the state has limited economic power, also on its power to decide on the flow of money and credit. To understand that social relation that constitutes money today, we need to understand the underlying social relations of capitalism. And that's more than just a state and her subjects. Unfortunately, Chambers stops there basically. He doesn't go into details what he thinks are those constitutive social relations that form money-credit today, but it does leave room for a value-theory to fill that up.
Therefore, this book lays the foundation for further research in Marxist monetary theories, beyond the criticisms of the chartalists. On this matter, it is clear that Chambers is well-informed on Marxist debates (he distinguishes de Brunhoff, the value form theorists, and "orthodox" Marxists for having different theories on money), but, as I indicated, he doesn't give us much further. I feel like this book will be an important book for Marxists like Lapavitsas to see if it would be compatible with (his interpretation of) Marxist monetary theory. In any case, this book has been much more helpful than all the Marxist critiques I've read so far on MMT in pinpointing the theoretical problems of chartalists.
Displaying 1 of 1 review