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The Difference That Money Makes: Sovereignty, Indecision, And The Politics Of Liquidity
This work is concerned to rethink the relation between money and the state in a way that challenges both Marxist and chartalist stories about the history and nature of money and monetary phenomena. In doing so, it examines the problem of liquidity, or the question of whether or not there exists a market in money, as a problem of constitutional order and class struggle, and argues that this problem can be illuminated by means of a study of tragic drama. It traces a genealogy of “modern money” created through the monetization of public liabilities through the first emergence of a permanent peacetime deficit state in early modern England, and asks what we might learn about this genealogy through an attention to the works of William Shakespeare as a sensitive observer of the social and political fault lines out of which the system of modern money emerged. In doing so, it follows his historical gaze backwards through history, to medieval England and the earliest coinage societies of Mediterranean antiquity. Out of this discussion is generated a new theory of money that challenges all currently existing orthodox and heterodox theories, and which sees money as constituted not by an identity or equivalence but rather by a difference or a spread, in terms of which options can be created and priced.
557 pages, Unknown Binding
Published December 1, 2021
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April 22, 2022
Available on Dropbox via his pinned tweet @drumm_colin.
Fascinating read! Viewing the monetary system itself as an independent branch of class struggle that predates capitalism fixes some glaring issues with Marx's conception of money. That focal points in Europe's history and the twin 'evils' of incest and tyranny are tied so explicitly to issues of soverignty and monetary debasement, and ALSO then linked to classical myths in Shakespeare and Oedpius is able to explain so much of Western political thought. Blown away by all the connections - definitely something I will need to think about for quite some time to grasp all its implications.
Fascinating read! Viewing the monetary system itself as an independent branch of class struggle that predates capitalism fixes some glaring issues with Marx's conception of money. That focal points in Europe's history and the twin 'evils' of incest and tyranny are tied so explicitly to issues of soverignty and monetary debasement, and ALSO then linked to classical myths in Shakespeare and Oedpius is able to explain so much of Western political thought. Blown away by all the connections - definitely something I will need to think about for quite some time to grasp all its implications.
December 31, 2025
The writing is simultaneously engaging and clever while remaining theoretically rich and compelling.
Colin Drumm’s ‘The Difference Money Makes’ lambasts the Aristotelian law of commensurability as the key theoretical construct that abstracts away the fundamental ‘social antagonisms’ inherent in monetary economies.
For Drumm, Marx’s “reliance on Aristotle’s twin postulates of commensuration and sterility” (Drumm 2022, p.100), most evident in his ‘synchronistic’ treatment of the market as a “system of equalities” born from the “Brownian motion of human activity,”(Drumm 2021, p.103) fundamentally misses the concrete spatio-temporal constituency of the economy.
The market for Drumm, echoing Treynor, necessarily involves a class of merchants who absorb the outputs of time-inelastic producers in exchange for liquidity premiums (the reward for bearing the risk of illiquidity). For Drumm, the existence of markets is tied to the willingness of individuals to accept these liquidity premiums; as such, “the market’s anxiety about its own continued existence is … constitutive of the phenomenon of market exchange” (Drumm 2021, p.100). The “inside spread”, the difference between what an individual asks for and what the market dealer bids for, and the “outside spread” (what the market dealer subsequently asks for), thus vitiates the presupposed equalities fundamental to the Marxian project.
Money is thus not “some identical substance” (Drumm 2021, p.128) representing the abstract equality of use-values; it is instead a particular, concrete thing that metonymically stands for other things which precede and succeed the flow of goods and services. It is a Berkeleyan sign, rather than a Hegelian universal. While Berkeley’s indifferently denoting words are similarly conceptual, instead of being the product of abstraction, they are defined by the fact that they generally and indifferently denote various particulars. It is a particular which contains within it analogous substitutions without itself representing some sort of abstract Platonic essence.
Returning to the spread, it begs the question of “who will pay the price of liquidity and to whom it will be paid” (Drumm 2021, p.447), which thus becomes a question of the “historical accretion of a constitutional order” (Drumm 2021, p.446) .
I do have some reservations about the philosophical commitments Drumm makes:
1. Drumm adopts Berkeley's handwaving away over the cognition of universals, for "it is impossible to imagine any triangle at all which would not be possessed of some particular determination.” (Drumm 2021, p.124). As Descartes illustrates, however, our rational comprehension of objects does not imply a sensuous experience, as “if I think of a chiliagon although I understand quite well that it is a figure with a thousand sides, I don’t imagine the thousand sides or see them as if they were present to me.” (Descartes 2017, p. 27).
2. Furthermore, it remains to be seen whether Berkeley can even begin to solve Hume's epistemic problem of induction, which highlights how our lack of “any kind of direct intellectual intuition of the structure of nature” (Roffe 2020, p.9) leaves us unable to discern any universal natural laws. The precise mechanics of how we come to know a universal from a plurality can not be achieved without abstraction.
3. The use of the market dealer as a cudgel against Marx seems only to be a critique of Marx’s assumption that “all commodities, including labour power, are bought and sold at their full value” (Marx 2024, p.287). It is only this assumption that leads Marx to suspend an analysis of the practical constitution of Merchant Capital (which to me is what liquidity premiums seem to reduce down to).
4. His understanding of Marx’s crisis theory seems to overstate the importance of investment in fixed capital, leading to a “proportional contraction of the total wage-fund available to purchase commodities” (Drumm 2021, p.89). As Kozo Uno illustrates, the wage fund can, in fact, increase and the techniques involved in capital accumulation can remain constant; the only precondition is that the rate of profit falls and accumulation funds are exhausted in competition.
5. Drumm’s claim that Berkeley identifies identity with indifference becomes metaphysically incoherent insofar as it mirrors Schelling’s unsuccessful attempts to identify the Ungrund with its own indifference. For Schelling, the “introduction of the first duality into the primal unity [Ungrund]” is solved via “indifference” (White 1983, p.132). Schelling is attempting to find a way to introduce complexity into his fundamentum inconcussum veritatis. Schelling’s solution is to merely have the terms in this ‘duality’ be indifferent towards each other, and thus not really a duality, since a duality is a relational unity within an identity. This fails as this ‘indifferent relation’ calls upon a metaphysical unity we’re attempting to avoid (the universal). The ‘standing-in-ness” of the token becomes universal.
Colin Drumm’s ‘The Difference Money Makes’ lambasts the Aristotelian law of commensurability as the key theoretical construct that abstracts away the fundamental ‘social antagonisms’ inherent in monetary economies.
For Drumm, Marx’s “reliance on Aristotle’s twin postulates of commensuration and sterility” (Drumm 2022, p.100), most evident in his ‘synchronistic’ treatment of the market as a “system of equalities” born from the “Brownian motion of human activity,”(Drumm 2021, p.103) fundamentally misses the concrete spatio-temporal constituency of the economy.
The market for Drumm, echoing Treynor, necessarily involves a class of merchants who absorb the outputs of time-inelastic producers in exchange for liquidity premiums (the reward for bearing the risk of illiquidity). For Drumm, the existence of markets is tied to the willingness of individuals to accept these liquidity premiums; as such, “the market’s anxiety about its own continued existence is … constitutive of the phenomenon of market exchange” (Drumm 2021, p.100). The “inside spread”, the difference between what an individual asks for and what the market dealer bids for, and the “outside spread” (what the market dealer subsequently asks for), thus vitiates the presupposed equalities fundamental to the Marxian project.
Money is thus not “some identical substance” (Drumm 2021, p.128) representing the abstract equality of use-values; it is instead a particular, concrete thing that metonymically stands for other things which precede and succeed the flow of goods and services. It is a Berkeleyan sign, rather than a Hegelian universal. While Berkeley’s indifferently denoting words are similarly conceptual, instead of being the product of abstraction, they are defined by the fact that they generally and indifferently denote various particulars. It is a particular which contains within it analogous substitutions without itself representing some sort of abstract Platonic essence.
Returning to the spread, it begs the question of “who will pay the price of liquidity and to whom it will be paid” (Drumm 2021, p.447), which thus becomes a question of the “historical accretion of a constitutional order” (Drumm 2021, p.446) .
I do have some reservations about the philosophical commitments Drumm makes:
1. Drumm adopts Berkeley's handwaving away over the cognition of universals, for "it is impossible to imagine any triangle at all which would not be possessed of some particular determination.” (Drumm 2021, p.124). As Descartes illustrates, however, our rational comprehension of objects does not imply a sensuous experience, as “if I think of a chiliagon although I understand quite well that it is a figure with a thousand sides, I don’t imagine the thousand sides or see them as if they were present to me.” (Descartes 2017, p. 27).
2. Furthermore, it remains to be seen whether Berkeley can even begin to solve Hume's epistemic problem of induction, which highlights how our lack of “any kind of direct intellectual intuition of the structure of nature” (Roffe 2020, p.9) leaves us unable to discern any universal natural laws. The precise mechanics of how we come to know a universal from a plurality can not be achieved without abstraction.
3. The use of the market dealer as a cudgel against Marx seems only to be a critique of Marx’s assumption that “all commodities, including labour power, are bought and sold at their full value” (Marx 2024, p.287). It is only this assumption that leads Marx to suspend an analysis of the practical constitution of Merchant Capital (which to me is what liquidity premiums seem to reduce down to).
4. His understanding of Marx’s crisis theory seems to overstate the importance of investment in fixed capital, leading to a “proportional contraction of the total wage-fund available to purchase commodities” (Drumm 2021, p.89). As Kozo Uno illustrates, the wage fund can, in fact, increase and the techniques involved in capital accumulation can remain constant; the only precondition is that the rate of profit falls and accumulation funds are exhausted in competition.
5. Drumm’s claim that Berkeley identifies identity with indifference becomes metaphysically incoherent insofar as it mirrors Schelling’s unsuccessful attempts to identify the Ungrund with its own indifference. For Schelling, the “introduction of the first duality into the primal unity [Ungrund]” is solved via “indifference” (White 1983, p.132). Schelling is attempting to find a way to introduce complexity into his fundamentum inconcussum veritatis. Schelling’s solution is to merely have the terms in this ‘duality’ be indifferent towards each other, and thus not really a duality, since a duality is a relational unity within an identity. This fails as this ‘indifferent relation’ calls upon a metaphysical unity we’re attempting to avoid (the universal). The ‘standing-in-ness” of the token becomes universal.
Displaying 1 - 2 of 2 reviews