# Money ## Metadata * Author: [Geoffrey Ingham](https://www.amazon.comundefined) * ASIN: B083Q4HS8T * ISBN: 978-1509526819 * Reference: https://www.amazon.com/dp/B083Q4HS8T * [Kindle link](kindle://book?action=open&asin=B083Q4HS8T) ## Highlights Money is not merely Hume’s ‘oil’ for economic ‘wheels’; it is, rather, the ‘social technology’ without which the ‘classical’ economists’ physical capital cannot be set in motion and developed. — location: [222](kindle://book?action=open&asin=B083Q4HS8T&location=222) ^ref-33410 --- Only ‘real’ forces of production – technology, labour – create new value, and their input cannot be increased simply by injections of money. Consequently, if monetary expansion runs ahead of these ‘real’ forces, inflation inevitably follows. On the other hand, the broadly Keynesian and heterodox tradition continues to argue that money is the vital productive resource – a ‘social technology’ – that can be used to create non-inflationary economic growth and employment. — location: [259](kindle://book?action=open&asin=B083Q4HS8T&location=259) ^ref-7796 These both seem true to me. Why do they have to be mutually exclusive? --- However, the centuries-old persistence and intensity of the unresolved disputes tells us that money is not merely this technical device to be managed by economic experts. Rather, it is also a source of social power to get things done (‘infrastructural power’) and to control people (‘despotic power’) (Ingham, 2004, 4). The ‘money question’ lies at the centre of all political struggles about the kind of society we want and how it might be achieved. — location: [286](kindle://book?action=open&asin=B083Q4HS8T&location=286) ^ref-65429 --- Although the equation is a logical identity in which each side equals the other, it was generally assumed that MV determines PT: that is, the quantity of money is the causal factor in price inflation. In chapter 4, we will see that ‘quantity theory’ lay behind the ‘monetarist’ attempts in the 1970s and 1980s to control inflation. — location: [490](kindle://book?action=open&asin=B083Q4HS8T&location=490) ^ref-56154 --- states also became issuers of IOUs as payment for goods and services which were redeemed, in turn, by their acceptance as payment of taxes imposed by the state. Both developments replaced the fragile personal trust in the IOUs, based on the viability of the merchants in the networks, with impersonal trust in the issuing bank and state authority. — location: [690](kindle://book?action=open&asin=B083Q4HS8T&location=690) ^ref-28533 --- If the state does not adopt self-imposed restrictions such as a gold standard on the supply of money, MMT contends that the state – as the sovereign money power – can simply spend money into existence. — location: [780](kindle://book?action=open&asin=B083Q4HS8T&location=780) ^ref-47709 An independent central bank would also constrain the government's ability to expand the money supply --- orthodox monetary economics shows ‘a steadfast refusal to face facts’, remaining beset by ‘continuing muddles’ (Goodhart, 2009). It persists with the assumptions of ‘neutral’ money and the corollary that economic value is produced by ‘real’ forces, independently of the existence of money, as it would in barter — location: [839](kindle://book?action=open&asin=B083Q4HS8T&location=839) ^ref-24791 Money is an uniquely valuable component of an economy. Without credit / money we are not able to create purchasing power through debt. We can use an asset such as goodwill, or collateral, to increase production through IOU's. --- credit theory’s focus on money transactions as credit–debt relations points to their essential social dimension; trust in money derives from conventions and beliefs that also foster social order, — location: [860](kindle://book?action=open&asin=B083Q4HS8T&location=860) ^ref-20835 if you don't believe people honor IOU's then money as credit can't exist. --- Any ‘intrinsic’ value of precious metal coins, or the convertibility of paper currency, was merely one of the ways of establishing the stability and acceptance of the means of payment. — location: [880](kindle://book?action=open&asin=B083Q4HS8T&location=880) ^ref-3725 --- The heterodox economist Hyman Minsky famously said that anyone could issue ‘money’ – the problem was getting it accepted (Minsky, 2008 [1986]). He was emphasizing that ‘money’ was ‘credit’ – an acknowledgement of debt, an IOU; but what he should have said is that anyone could issue ‘credit’ – the problem was getting it accepted as ‘money’. — location: [910](kindle://book?action=open&asin=B083Q4HS8T&location=910) ^ref-39714 --- the authority might be exercised by a network of merchants – as in seventeenth-century Europe. However, the most stable form of authoritative social order and consequently also of money is based on monopoly of the legitimate use of force with a territory: — location: [959](kindle://book?action=open&asin=B083Q4HS8T&location=959) ^ref-43437 --- Consent and coercion also underpin the economic links between the state and society. As the largest makers and receivers of payments (tax revenue), states are the single most important economic agent in modern society, which ensures that their money is in most demand. — location: [964](kindle://book?action=open&asin=B083Q4HS8T&location=964) ^ref-23119 --- For example, ‘free banking’ in the USA, between 1837 and 1886, allowed the issue of notes by banks and almost any organization: railroad companies, churches, restaurants, and so on. In England, the 1844 Bank Charter Act granted exclusive note issue to the Bank of England and prohibited any new bank from issuing its own notes. Mergers and concentration in banking during the nineteenth century effectively created ‘new’ banks which gradually reduced the number of note issuers – the last in Britain, Fox, Fowler and Company, closed in 1921. — location: [1259](kindle://book?action=open&asin=B083Q4HS8T&location=1259) ^ref-32746 --- Over the course of the eighteenth century, hundreds of local ‘country’ banks were established, using the same process for producing new money. — location: [1372](kindle://book?action=open&asin=B083Q4HS8T&location=1372) ^ref-36433 How did Dutch Finance, and British creation of country banks contribute to the growth of economic activity, relative to other countries? How important was finance to the great (and little) divergence? --- From 1945 to the late 1960s, there was an economic, social, and political equilibrium, or ‘settlement’, in many western democracies which was based on the way in which money was created and managed. Capitalist enterprise, organized labour, and financial classes (rentiers) accepted a revised distribution of rewards. — location: [1528](kindle://book?action=open&asin=B083Q4HS8T&location=1528) ^ref-24017 Telling a story that doesn't exist. what about all the o f her factors such as demographics and weather and technology? --- These expatriate dollars fed the formation of unofficial parallel money and capital markets alongside the Bretton Woods system – most notably, the euro-dollar markets based in London that emerged in the late 1960s — location: [1575](kindle://book?action=open&asin=B083Q4HS8T&location=1575) ^ref-32110 --- An academic member of the ECB Board, Otmar Issing, could not have expressed economic orthodoxy more succinctly: ‘the euro represents depoliticised and hence stable money’ — location: [1901](kindle://book?action=open&asin=B083Q4HS8T&location=1901) ^ref-42177 --- capitalist financial enterprises issue their own promises of payment (IOUs) which circulate widely within relatively closed networks: that is, the ‘near money’ of the ‘shadow’ banks. — location: [2019](kindle://book?action=open&asin=B083Q4HS8T&location=2019) ^ref-21965 I probably don't understand banking until I understand shadow banking --- The growth of ‘inside’ money and ‘shadow’ banking is closely associated with periods of rapid expansion and innovation in capitalist finance – especially, speculative booms in housing and stock markets. As the major locations of finance-capital, the UK and USA have experienced crises which were triggered by ‘near’ money’s abrupt loss of liquidity caused by a chain reaction of issuers’ defaults on their IOUs: for example, the UK’s ‘secondary banking crisis’ in 1972. — location: [2040](kindle://book?action=open&asin=B083Q4HS8T&location=2040) ^ref-39044 --- Argentina presents an exceptional case of a modern developed state in which a plurality of ‘alternative’ currencies has existed to varying degrees and at all levels since the late nineteenth century. — location: [2127](kindle://book?action=open&asin=B083Q4HS8T&location=2127) ^ref-49349 --- Indeed, it has been argued that the currency issued in Tucuman is more stable than the national currency (Théret, 2017). — location: [2131](kindle://book?action=open&asin=B083Q4HS8T&location=2131) ^ref-3016 --- Morgan Ricks has identified the vast expansion of money in ‘shadow’ banking – not the franchised licensed sector – as the major cause of the GFC and other ‘bubbles’ (Ricks, 2016). — location: [2317](kindle://book?action=open&asin=B083Q4HS8T&location=2317) ^ref-22687 ---