The Currency of Politics: The Political Theory of Money from Aristotle to Keynes – by Stefan Eich

Eich, Stefan -2022 -The Currency of Politics The Political Theory of Money from Aristotle to Keynes

Stefan Eich Currency of Politics updates here

Stefan Eich I discovered as the best reviewer yet of Aaron Sahr’s Kritik der Finanziellen Vernunft. Like Sahr, Eich wants to de-mystify, de-neutralise and re-politicise money. Operating in a somewhat larger frame than sociologist Sahr, political theorist Eich’s arguments are informed by his “vivid and compelling picture of the whole history of political and economic thought.” Sounds promising. On the basis of what I have been able to read for free I am marking this “tour de force” a must-read (for as soon it is a bit less pricey).

With Martijn Konings, Stefan Eich also co-edits a book series at SUP on “Currencies: New Thinking for Financial Times.”

Eich, Stefan -2022 -The Currency of Politics The Political Theory of Money from Aristotle to Keynes
Stefan Eich – The Currency of Politics

publisher’s info

Money in the history of political thought, from ancient Greece to the Great Inflation of the 1970s

In the wake of the 2008 financial crisis, critical attention has shifted from the economy to the most fundamental feature of all market economies—money. Yet despite the centrality of political struggles over money, it remains difficult to articulate its democratic possibilities and limits. The Currency of Politics takes readers from ancient Greece to today to provide an intellectual history of money, drawing on the insights of key political philosophers to show how money is not just a medium of exchange but also a central institution of political rule.

Money appears to be beyond the reach of democratic politics, but this appearance—like so much about money—is deceptive. Even when the politics of money is impossible to ignore, its proper democratic role can be difficult to discern. Stefan Eich examines six crucial episodes of monetary crisis, recovering the neglected political theories of money in the thought of such figures as Aristotle, John Locke, Johann Gottlieb Fichte, Karl Marx, and John Maynard Keynes. He shows how these layers of crisis have come to define the way we look at money, and argues that informed public debate about money requires a better appreciation of the diverse political struggles over its meaning.

Recovering foundational ideas at the intersection of monetary rule and democratic politics, The Currency of Politics explains why only through greater awareness of the historical limits of monetary politics can we begin to articulate more democratic conceptions of money.

selected quotes


The Currency of Politics: The Political Theory of Money from Aristotle to Keynes - by Stefan Eich
The Currency of Politics: The Political Theory of Money from Aristotle to Keynes - by Stefan Eich

Ch4 – Money as Capital – Karl Marx and the Limits of Monetary Politics – Conclusion

In November 1883, nine months after Marx’s death, Engels issued the third German edition of the first volume of Capital.207 Based on the French edition of 1873 and incorporating Marx’s marginal corrections of the second German edition of 1872, Engels executed Marx’s changes. In one of the notes to the third chapter on money that Marx had wished to revise and clarify, he now distinguished even more clearly than before between two different kinds of “monetary crisis” (Geldkrise).208 While in the main body of the text he had referred to a monetary crisis as merely a particular phase in a general commercial crisis of production, Marx now explained that there was also a special kind of monetary crisis that could arise independently but then affect industry and trade. Such autonomous monetary crises were driven by money capital (Geld-Kapital) and their sphere was that of banks, the stock exchange, and finance. When Engels turned after Marx’s death to the manuscript of volume 3 of Capital, which Marx had written in 1864–65 but then abandoned, he found more evidence of Marx’s persistent interest in credit and monetary crises.209 It took eleven more years until Engels was pleased to announce in 1894 that after an enormous editorial effort he was finally ready to publish the third volume of Capital.210 He himself died the following year. As Engels confessed in the preface to the book, when he started his editorial work on the third volume a decade earlier, he had little idea just how much trouble the unfinished manuscript draft from 1864–65 would give him. While some chapters were in relatively finished form, others consisted of open-ended reflections that captured Marx’s unfinished thought in motion. This was in particular the case for the fifth (and longest) section on the credit system, which presented Engels with “the greatest difficulty.”211 Alongside the volume’s seminal discussion of profit and rent, it was this extended discussion of credit that perhaps most puzzled readers. Generations of interpreters have since wondered how precisely the treatment of credit related to Marx’s analysis of the mode of production. Was Marx more interested in credit than volume 1 had led many to believe? Or did the seeming turn to credit reflect Engels’s editorial hand? Was it perhaps even a misleading distortion on his part?212 As we have seen, Marx’s deep interest in the credit system during the early 1860s should not have come as a surprise. Even where the possibility of a true monetary crisis appeared only in the footnotes of volume 1 of Capital, the vicissitudes of contemporary credit money loomed large for Marx in the decade preceding its publication. In his notes he returned again and again to the crisis of 1857 and also followed any subsequent credit crises in obsessive detail, including that of May 1866 when the largest British bank, Overend, Gurney & Co., collapsed (the original “Black Friday” that prompted Walter Bagehot to write his classic account of central banks as emergency providers of liquidity).213 The underlying question that seemed to have preoccupied Marx in these notes on monetary crises was whether the dynamics of credit could always be fully captured by the abstract analysis of capitalist value or whether they contained a further dynamic of their own.214 Marx remained beset by doubts concerning the precise relation of credit crises to the kinds of commercial crises characteristic of the capitalist mode of production. In the manuscript draft from 1864–65, Marx left the question unanswered. Instead, he sidestepped the issue by insisting that “as long as the social [gesellschaftliche] character of labor appears as the money-existence of commodities [Gelddasein der Waare], and thus as a thing external to actual production, money crises—independent of or as an intensification of actual crises—are inevitable.”215 Irrespectively of their precise origin (the parenthetical insertion functioned here as a hedge), monetary crises were an inevitable feature of the capitalist mode of production. No monetary reform, no reengineering of the credit system, no superior monetary management by central banks could prevent them as long as the underlying structures of production remained unchanged. For Marx the confused futility of the Peel Act was a supreme illustration of the point, and he offered a close analysis of the act in what became under Engels’s direction chapter 34 of volume 3 of Capital.216 The hope of eliminating the potential for future crises by fixing the amount of currency was not just wrong on technical grounds but betrayed a more fundamental delusion—a “monstrous error” as Marx put it.217 Though he never returned to the unfinished manuscript, each suspension of the Peel Act consequently filled Marx with delight. Until the end of his life, he predicted that laws to reform the monetary system would prove to be unworkable as long as the pervasive rule of capital had not been fully grasped and, indeed, overcome. Behind his theory of value and his account of the endogeneity of capitalist money stood a broader, and altogether more political, point about the futility of preventative monetary management and the ultimate inability of the law to shape capitalist money. It is helpful to relate this critical rebuke to our earlier accounts of monetary order advanced by Locke and Fichte. If capitalist money was the ultimate commodity and capital was money realized to its full extent, it was similarly the world market that constituted the full realization of capitalism’s productive powers. It was only on the world market, Marx explained, “that money first functions to its full extent as the commodity whose natural form is also the directly social form of realization of human labour in the abstract. Its mode of existence becomes adequate to its concept.”218 Marx’s critique was in this context meant to apply as much to the Fichtean vision of malleable national fiat currencies that I reconstructed in the previous chapter as it was intended as a response to Proudhonist schemes for credit reform. To be sure, Marx conceded, “the business of coining, like the establishing of a standard measure of prices, is an attribute proper to the state.”219 But national coins were merely “different national uniforms worn at home by gold and silver as coins, taken off again when they appear on the world market.”220 This meant that money as capital, even where it circulated as national currency, was decidedly less malleable than Fichte envisioned. Under capitalism money did not straightforwardly obey the word of the state. Instead, it spoke the “language of commodities [Waarensprache].”221 Marx’s critique of voluntarist monetary politics entailed at the same time an underappreciated and to some extent unintended implication. Shifting the analytic focus from money to the value form all too easily obscured that the emergence of capital did not, in fact, lead to the vanishing of the politics of money.222 Marx’s emphatic contention that no monetary reform could eliminate capitalism’s central crisis tendency of overaccumulation through the extraction of surplus value easily elided that there still were better or worse ways to operate a capitalist monetary system. While Marx himself never lost interest in the operation of credit markets and central banks’ role in them, many twentieth-century Marxists dismissed monetary policy and rejected it as an implausible site of political struggle. What was easily lost on many of Marx’s readers was the way in which his reduction of money to a “crystal of value” had itself grown out of a deep familiarity with and appreciation for the history of money—including political struggles fought over the constitution of the monetary system. Ironically, it had been precisely this body of knowledge that had allowed Marx himself to move along the path from money to capital in the course of the 1850s. If Marx hoped to cut through the Gordian knot of socialist monetary debates, many of his tools for doing so were themselves honed in these very debates. This was compounded by a further difficulty brought about by Marx’s method. In insisting that a scientific critique of political economy had to inhabit a historicized vantage point from within capitalism, Marx consciously forced himself to ventriloquize the objective illusions of capitalism—such as the reduction of money to a commodity—precisely in order to reveal their deceptive peculiarity to the capitalist mode of production. In the case of money this meant arguing from the widely shared premises of money as gold in order to reveal that the underlying conception of the money commodity was precisely not natural but unique to capitalism. But this crucial subtlety was easily lost on many readers of Capital who more often than not ended up reifying capitalist money rather than demystifying its fetishistic character. As a result, far more than placing limits on monetary policy and monetary reform, readers of Marx often eclipsed the politics of money tout court. At its most extreme, one effect of Marx’s intervention has in this sense been an elision of monetary politics on the left that has at times mirrored the liberal elision in Locke’s wake. There are nonetheless ways of capturing Marx’s powerful critique of the limits of monetary policy and reform without eliding the politics of money. The extreme version of the Marxian claim—that legislation on monetary matters simply does not matter—cannot hold and Marx himself never thought it did.223 Monetary legislation and the structure of the domestic and international monetary system have proven remarkably consequential. Even under conditions of global financial markets the law makes, and continually remakes, money.224 And yet Marx was surely right to caution against excessively voluntarist conceptions of monetary management, and to point out that schemes of monetary reform need to engage with the underlying peculiarities of production and circulation under capitalism. This does not deny that different monetary regimes have distributional implications or that the allocation of credit can alleviate or deepen crises. Instead Marx forces us to grapple with the relative autonomy of monetary policy, which recalls earlier state-derivation debates about the relative autonomy of the state.225 The relative autonomy of the political that can be seen to emerge out of these debates extends to the relative autonomy of monetary politics. The state, it is important to recognize, is not simply the agent of capital; but nor is it removed from societal conflicts over the value form.226 There can be no doubt that the state has a special status concerning the circulation of money. Its fiscal prerogatives allow it to enforce the circulation of its own money and this comes with certain powers. But the state also reflects the class conflicts that themselves constitute the constant circulation and transformation of capital.227 Marx’s account serves then as a reminder that the monetary autonomy of the state is real and nonetheless only relative in a system in which money is endogenously created by banks and circulates as capital. Behind this substantive technical point looms a second, more strategic question: Are monetary politics and the allocation of credit promising arenas for political mobilization and contestation? Marx’s answer was resoundingly negative. This was not an unreasonable conclusion to draw in an age in which central banks were still private institutions and in which the extension of the franchise focused on areas more immediate political reach. Reducing the length of the working day seemed a far more promising and immediately tangible arena of political mobilization and struggle. To focus one’s intellectual and political resources on monetary policy would appear in this light as a fruitless distraction.228 But the answer to this question is no longer obvious. Not only are there important historical examples of electoral politics dramatically pivoting around monetary policy, but in the contemporary context of financialized capitalism and radically shrunk labor unions the allocation of credit has rightly shifted back into the light of political struggles. Just as there are ongoing political struggles within capitalist production (ranging, for example, from the exercise of power within firms to the lack of control over labor time by many workers in zero-hours contracts), so are there important political struggles over a more egalitarian provision of credit and a more progressive monetary policy. None of this amounts to the end of the capitalist value form, but nor should we simply write off any of these struggles—and the political mobilizations necessary to wage them—as pointless or hopeless. A better reading of Marx would take on board his powerful critique of monetary reform and his careful delineation of the limits of monetary policy, while acknowledging at the same time that even under capitalism money oscillates between currency and capital, between malleability and constraint, between law and commodity. States make money even if they do not always do so as they please.

events, reviews, interviews, debates, videos – updated 8-2022 6-8-2022 The Meaning of Money, from Aristotle to Keynes

jhiblog 7-2022 The Currency of Politics: An Interview with Stefan Eich (Part I) (Part II) 6-2022 Open House Webinar mit Stefan Eich – Moderation: Max Krahé Anmeldung: Zoom

@EuropeanLawOpen symposium

@EuropeanLawOpen symposium on @stefeich The Currency of Politics with @stefeich @MehrsaBaradaran @IsabelFeichtner Marco Goldoni @C_Lapavitsas Fernando Losada @ajmenend @apsmolenska Leopold Specht Francesca Trivellato May 19th, 1730CET, 23rd, 1730CET Register asap!

book cover reviews

“The Currency of Politics breaks the frame we use to understand money. More than an instrument or an institution, currency becomes a nerve center of political theory. Deeply in dialogue with the past, Stefan Eich compels us forward to conceptualize money as a medium for democratic agency—or its loss. A tour de force.” – Christine Desan (Harvard Law School), author of Making Money: Coin, Currency, and the Coming of Capitalism

“With deftness, elegance, and intellectual verve, Eich paints a vivid and compelling picture of the whole history of political and economic thought as revealed through an interrogation of money. It is clear that this insightful book announces a new and important voice in the field.” – David Singh Grewal (University of California, Berkeley), author of Network Power

“This fascinating and original book speaks directly to pressing contemporary concerns while shining new light on key figures like Locke, Marx, and Keynes through sensitive and thoughtful reconstructions of their texts and contexts. The Currency of Politics is a major contribution to the history of political thought, conceptual history, and political economy.” – Alex Gourevitch (Brown University), author of From Slavery to the Cooperative Commonwealth

reviews – interviewsdebates – videos gg/pdf 12-5-2022 Warum ist Geld Politisch? – Fragen nach Währungen und Werten sind gerade in Demokratien immer Machtfragen. Deshalb ist Geld keineswegs nur Stoff für Ökonomen, sagt der Ideenhistoriker Stefan Eich, sondern es ist ein Medium der Gerechtigkeit. Interview: Oliver Weber

DIE ZEIT: Sie sind Ideenhistoriker und politischer Theoretiker, denken aber über Geld nach. Warum überlassen Sie dieses Thema nicht einfach den Ökonomen?

Stefan Eich: Die ökonomische Sichtweise auf Geld ist eine naheliegende, durchaus wichtige – aber sie ist nicht die einzige. Geld ist immer auch eine politische Institution, und mich interessiert gerade die Wechselwirkung zwischen diesen beiden Dimensionen. Wenn etwa die Europäische Zentralbank gegenwärtig darüber nachdenkt, ob und wie schnell sie in diesem Jahr den Leitzins erhöhen will, entscheidet das nicht nur über Kurse auf Aktien- und Anleihenmärkten, sondern eben auch über die Verteilung von Einkommen und Vermögen – die Zentralbanker haben letztlich die Macht, Macht zu verteilen.

ZEIT: Inwiefern hat eine Geldordnung mit Macht zu tun?

Eich: Mit der Machtfrage stellen sich grundsätzliche Fragen zur Verfassung der Geldordnung: Wer hat das Recht, Geld zu schaffen? Kann eine politische Gemeinschaft diese Macht der Geldschöpfung gestalten, um sich selbst besser zu regieren? Welche Zukunftsvorstellungen, welche Ideen leiten sie dabei an? Diese Fragen nicht zu stellen heißt, den politischen Charakter einer zentralen Institution an der Schnittstelle zwischen Demokratie und Kapitalismus unsichtbar zu machen.”

…”… weiterlesen bei oder gg/pdf 1-2022 Stefan Eich – Currency of Politics

…”This time the occasion was a request from Evgeny Morozov of the Syllabus. Evegeny is a fascinating and persuasive guy. And Syllabus is one of the cooler things on the interwebs. The Syllabus has an entire section devoted to crypto and digital things. Evgeny persuaded by brilliant and wise friend Stefan Eich to do an interview with him on the politics of money, Keynes and much else besides. Stefan essential new book on political theory and money, The Currency of Politics, will be out with Princeton University Press in May. …”… 2022 Crypto Won’t Solve Our Problems

We Need to Democratize Money – Bitcoin was not just a consequence of public disillusionment during the 2008 financial crisis — it was also a response to neoliberal monetary policies that saw money as somehow above politics. But questions about monetary policy are questions about democracy. 2021 interview

If you are looking for an excellent account of the many ways in which Friedrich Hayek shaped the thinking of some inside the broader crypto-money community, look no further than Stefan Eich’s essay (a chapter from this edited collection) called Old Utopias, New Tax Havens: The Politics of Bitcoin in Historical Perspective. 2017 The allure of dark times: Max Weber, politics, and the crisis of historicism – by Stefan Eich & Adam Tooze

This article argues that realist invocations of Weber rely on an unrealistic reading of Weber’s realism. In order to escape the allure of Weber’s dramatic posture of crisis, we place his seminal lecture on “Politics as a Vocation” (1919) in its historical and philosophical context of a revolutionary conjuncture of dramatic proportions, compounded by a broader crisis of historicism. Weber’s rhetoric, we argue, carries with it not only the emotion of crisis but is also the expression of a deeper intellectual impasse. The fatalistic despair of his position had already been detected by some of his closest contemporaries for whom Weber did not appear as a door-opener to a historically situated theory of political action but as a telling and intriguing impasse. Although the disastrous history of interwar Europe seems to confirm Weber’s bleakest predictions, it would be perverse to elevate contingent failure to the level of retrospective vindication. 2015 Paper Money and German Romanticism Stefan Eich

Abstract: In February 1797 Britain suspended the convertibility of its currency into gold and thereby introduced fiat paper money to finance its war against revolutionary France. This British embrace of fiat money left a lasting mark on the political and philosophical imagination of a whole generation of post-Kantian thinkers in the German lands. Whether radical Kantians, Young Romantics, or Anglophile Hanoverians, in the
1790s German philosophers began to be interested in the politics of money. By creatively updating the classical metaphorical link between coins and words for an age of paper money, Johann Gottlieb Fichte, Adam Müller, and others were able to grasp the poetic nature of modern fiat money as a circulating sign sustained by the modern state and the collective imagination of its citizens. 2015? Restructuring Democracy and the Idea of Europe Seyla Benhabib and Stefan Eich

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