Abstract
By now everyone is likely to be aware of the numerous worrisome events that have taken place on the monetary and financial markets during the past decade.
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- 1.
See especially Galbraith (1990).
- 2.
See e.g. Achterhuis (2011), p. 319; Engelen (2011); Boatright (2010), p. 592; Chérot and Frydman (2012), p. 302; de Bettignies and Lépineux (2009), p. 258; Harvey (2010), p. 296; Kerste et al. (2011); Giovanoli and Devos (2010), p. 610; Kerste et al. (2011), p. 225; Kirton et al. (2010), p. 345; Leader and David (2011), p. 519; Middelkoop (2009, 2014); Mishkin (2012), p. 832; Pagliari (2012), p. 274; Peil and Van Staveren (2009), p. 626; Piketty (2014), p. 696; Sedlacek (2011), p. 368; Shaxson (2012), p. 272.
- 3.
- 4.
- 5.
In the documentary “Capitalism – a love story” film maker Michael Moore goes looking for the underlying causes of the financial crisis of 2008. When interviewing several financial and financial law specialists, he asks them to explain certain complex financial products. This leads to embarrassing moments when the specialist cannot provide the answers to the said questions.
For a general overview of some of the numerous documentaries and movies on the subject of the financial crisis of 2008, see http://documentaries.about.com/od/populardocsubjects/tp/EconomicDocumentaries.htm.
- 6.
This insight is expressed as follows by John Kenneth Galbraith:
The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent. (see Galbraith 1975, pp. 18–19), also quoted on http://www.themoneymasters.com/the-money-masters/famous-quotations-on-banking/.
See furthermore Galbraith (1990), p. 19:
The rule is that financial operations do not lend themselves to innovation. What is recurrently so described and celebrated is, without exception, a small variation on an established design, one that owes its distinctive character to the aforementioned brevity of the financial memory. The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version. All financial innovation involves, in one form or another, the creation of debt secured in greater or lesser adequacy by real assets.
- 7.
Harari (2014), pp. 200–201.
- 8.
See, for instance, the recent development of “bitcoins” as an alternative for government issued money used in certain internet transactions.
- 9.
One could even argue that, throughout all human endeavor, “trial and error” has been the usual “method” or rather “process” of creating societal systems, and for coming up with solutions to problems arising from living together (see Popper 1940, p. 403).
On the subject of the history of money and the banking system, see especially Bogaert et al. (2000) (also available in Dutch and French; see Bogaert, Kuran-van Hentenryk and Van der Wee 1991; Bogaert, Kuran-van Hentenryk and Van der Wee 1991); see also Galbraith (1975); Galbraith (1990).
- 10.
Harari (2014), p. 201.
- 11.
The term “contract” is here not so much used in its traditional legal meaning of a “private law agreement” between two or more persons, but in the sense of a set of norms adopted by a society by means of all kinds of international and state law mechanisms. As is the case for private law agreements, such mechanisms are themselves also subject to change and evolution.
- 12.
- 13.
- 14.
Harari (2014), p. 197.
- 15.
- 16.
- 17.
Ferguson (2009), p. 24.
- 18.
- 19.
- 20.
- 21.
Bogaert et al. (2000), pp. 23 a.f.
- 22.
Bogaert et al. (2000), pp. 44 a.f.
- 23.
Galbraith (1987), p. 9.
Slavery still expresses the love of capitalism, especially of the rich and the powerful, to exploit other people’s labor as cheaply as possible (in order to get themselves as rich as possible), a love that regretfully still prevails in modern societies.
- 24.
Graeber (2012), p. 27.
- 25.
Graeber (2012), pp. 27 a.f.
- 26.
- 27.
Vandewalle (1976), p. 8.
- 28.
Galbraith (1975), pp. 8–9.
- 29.
Eagleton and Williams (2007), pp. 54 a.f.; Pfister (1941), p. 211; Breasted s.d., p. 125; Galbraith (1975), p. 9.
This clearly illustrates that “currency” (= money issued by the government) at all times is to be embedded in the social contract on which the state authority itself is based (see e.g. Vandewalle 1976, pp. 9 a.f.). When this trust is lost, the population will refuse to use the currency, which in turn, in extreme cases, can disrupt the organization of society itself.
- 30.
Galbraith (1975), pp. 8 a.f.
- 31.
See Rousseau:
Si donc on écarte du pacte social ce qui n’est pas de son essence, on trouvera qu’il se réduit aux termes suivants. Chacun de nous met and commun sa personne et toute sa puissance sous la suprême direction de la volonté générale; et nous recevons and corps chaque membre comme partie indivisible du tout. À l’instant, au lieu de la personne particulière de chaque contractant, cet acte d’association produit un corps moral et collectif compose d’autant de membres que l’assemblée a de voix, lequel reçoit de ce même acte son unité, son moi commun, sa vie et sa volonté. Cette personne publique qui se forme ainsi par l’union de toutes les autres prenait autrefois le nom de Cité, et prend maintenant celui de République ou de corps politique, lequel est appelé par ses membres État quand il est passif, Souverain quand il est actif, Puissance and le comparant à ses semblables. (Rousseau 2001, p. 53; see also Rolland 1940, p. 53; Brimo 1968, pp. 95 a.f.).
- 32.
See the historical examples summed up by Harari (2014), pp. 203–205.
- 33.
Harari (2014), pp. 203–204.
- 34.
- 35.
Harari (2014), pp. 200 a.f.
- 36.
For further reading, see Shuster (1973).
- 37.
Deweirdt et al. (1997), p. 27, pointing out the political symbol meaning of money.
- 38.
Harari (2014), p. 201.
- 39.
Galbraith (1975), p. 10.
- 40.
Eagleton and Williams (2007), pp. 77 a.f.
- 41.
- 42.
Martin (2013), pp. 88 a.f.
- 43.
Graff et al. (2014), p. 9.
- 44.
- 45.
Mankiw (2011), p. 627.
- 46.
Bogaert et al. (2000), p. 71.
- 47.
- 48.
Bogaert et al. (2000), p. 83.
- 49.
Middelkoop (2014), p. 51.
- 50.
Bogaert et al. (2000), p. 75.
- 51.
Graeber (2012), pp. 291–292; Ferguson (1998); Bogaert et al. (2000), p. 111; Galbraith (1987), pp. 37 a.f.; Bogaert et al. (2000), pp. 95 a.f.; Middelkoop (2014), p. 52.
Though others had tried before them, the Medici were the first bankers to make the transition from financial success to hereditary status and power. They achieved this by learning a crucial lesson: in finance small is seldom beautiful. By making their bank bigger and more diversified than any previous institution, they found a way of spreading their risks. And by engaging in currency trading as well as lending, they reduced their vulnerability to defaults. (Ferguson 2009, pp. 48–49.)
- 52.
Bogaert et al. (2000), p. 81.
- 53.
- 54.
- 55.
- 56.
- 57.
Among which the risks and inconveniences of moving (huge amounts of) coins (see Eagleton and Williams 2007, p. 81).
- 58.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 83.
- 59.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 83.
- 60.
Martin (2013), p. 111.
- 61.
It goes without saying that this characteristic is essential to the deposit of specific objects.
For instance, when someone deposits a coat (to which he is attached), he expects to receive back that same coat, in the same condition. Obviously he will not settle for another coat, save in very exceptional circumstances, for instance if the depository would instead offer him a much nicer, more expensive coat. However, the latter situation would require a new contract between depositor and depository.
- 62.
Byttebier and Wera (2016), p. 2.
- 63.
See also Byttebier and Flamée (2012), p. 22.
- 64.
Byttebier and Flamée (2012), p. 25.
- 65.
- 66.
As will be made clear in what follows, this has remained one of the main principles of modern-day banking.
- 67.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 153; Eagleton and Williams (2007), p. 81.
- 68.
Eagleton and Williams (2007), p. 177; Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 165.
- 69.
- 70.
Galbraith (1975), p. 20.
- 71.
- 72.
Martin (2013), p. 101.
- 73.
- 74.
- 75.
This church prohibition on charging interest had already been in vigor in the Western European (Catholic) territories since the early Middle Ages, but got more and more contested in the later Middle Ages, first in practice and then also in thought. As a result, it became for early bankers more and more lucrative to engage in massive lending (especially by issuing privately emitted paper money exceeding their cash reserve of coin money). They hereby started making agreements with the borrower, whereby the latter agreed not only to repay the capital made available, but also an additional interest, thus acting in defiance of the church restrictions on charging interest. This however gave a boost to the development of private paper money, as it prompted bankers to grant more and more credits in order to increase their profits (see Galbraith 1975, p. 13).
Moreover, the technique of interest generating credits also allowed for an increasingly “reckless” way of granting credits, as the interest mechanism made it possible to compensate losses from non-refunded credit with the gains of effectively repaid credit. This led to a proper free riding mechanism where “bad” debtors (those who did not pay back their loans) could benefit from the efforts of “good” debtors (those who did pay back their loans).
The tone was hereby set for a society model that would increasingly rely on greed as a guiding principle of its socioeconomic relations. As Galbraith has put it:
The discovery that banks could so create money came very early in the development of banking. There was that interest to be earned. Where such a reward is waiting, men have a natural instinct for innovation. (See Galbraith 1975, p. 19.)
The ethical side of this evolution will be further elaborated upon in the next Chap. 3 of this book.
- 76.
For further reading, see for instance Steinmetz (2015).
- 77.
- 78.
- 79.
The primary element of trust on which this form of money use relied, is also evident from the definition “fiduciary” paper money, as opposed to the notion of “representative” paper money which refers to cases whereby a sufficient amount of underlying coins (or bars of precious metal) are at hand (see e.g. Byttebier 2001, p. 32, no 34, a.o. referring to Bank of England (2000), 1; Bogaert 1988, p. 43; Fase and Vleminckx 1995, pp. 16–17).
Historically, paper money has gradually evolved away from being “representative” and became (more and more) “fiduciary”.
- 80.
See e.g. Martin (2013), p. 104:
In the same year [1321] the Catalonian authorities revised their 1300 order that failed bankers be forced to live on bread and water until all their clients were reimbursed. Henceforth, any banker who failed to meet his clients’ demands was to be publicly denounced and then summarily beheaded in front of his bank. It was no idle threat, as the hapless Barcelona banker Francesch Castello discovered in 1360. Under such uncompromising regulatory regimes, domestic banking really was a risky business.
- 81.
Yet for some time the population in various territories was allowed to supply the raw precious metals for minting by the authorized public authority. The latter however had (often) the sole power to actually mint the coins and insert the required marks, which usually included the picture of the sovereign.
- 82.
- 83.
Pdoa-Schioppa (2011), pp. 51–73, especially 58.
- 84.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 246.
- 85.
Galbraith (1975), p. 28 has phrased this as follows:
The miracle of money creation by a bank (…) could stimulate industry and trade, give almost everyone a warm feeling of well-being.
but adding to this the question:
How to have the wonder without the reckoning?
Compare to a more recent observation by Oxfam (see Oxfam 2016, p. 8):
The size of the global economy has more than doubled over the past 30 years. In 2014, its value reached nearly $78 trillion. As production and output continue to grow, there have been absolute increases in gross domestic product (GDP)—one of the main indicators of economic prosperity—in every region of the world over this period. In South Asia, combined GDP in 2014 was more than five times what it was in 1985.
- 86.
Eagleton and Williams (2007), p. 83.
- 87.
Eagleton and Williams (2007), p. 83.
- 88.
- 89.
Martin (2013), p. 13.
- 90.
Galbraith (1975), p. 21.
- 91.
Galbraith (1975), p. 21.
- 92.
Galbraith (1990), p. 20.
- 93.
Harari (2014), pp. 202–203.
- 94.
- 95.
- 96.
While the latter might even lose his head; see above, at footnote 80 of Chap. 1 of this book.
- 97.
In present day terms, this topic a.o. translates as the moral hazard question of “bail outs of banks” (see especially Stiglitz 2010, p. 200).
- 98.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 249.
- 99.
As will be elaborated upon in more detail in the third chapter of this book, private bankers, given their unbridled search for profits, started granting ever more credit to a.o. manufacturers (in addition to other economic agents). As a consequence, the latter were themselves driven to enhance production both in order to be able to pay back these credits (including the agreed upon interests) as for making ever more profits themselves (an evolution which led to the present-day “production for production’s sake”). As economic production itself can only thrive when consumption also increases, consumers themselves were increasingly invited to start to “consume for consumption’s sake”, a.o. manipulated by marketing techniques which even led to so-called “created wants”. Finally, within this societal model, public authorities themselves got increasingly manned by people more and more looking out for their own interests, instead of for the general good of the communities they are suppose to lead.
- 100.
Ferguson (2009), pp. 53–54.
- 101.
- 102.
See e.g. Galbraith (1990).
- 103.
Albeit obviously very profitable for certain interest groups, such as arms producers and other members of the leading classes.
- 104.
Galbraith (1987), p. 143.
- 105.
- 106.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 275.
- 107.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), pp. 275 a.f.
- 108.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 292.
- 109.
Ferguson (2009), pp. 53–54.
- 110.
This was furthermore a consequence of the collateral mechanism that lay at the base of the central bank’s lending policy.
- 111.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 270.
- 112.
Weatherford (1997), p. 164; Bogaert, Kuran-van Hentenryk and Van der Wee (2000), pp. 267 a.f.
- 113.
This is probably why Keynes himself would dismiss the gold standard as a “barbarous relic”. (See Ferguson 2009, p. 59.)
- 114.
It has, for instance, not been a coincidence that Great Britain, which had absorbed a large part of the world into the so-called “British Empire” (in particular between the sixteenth and the eighteenth centuries) was the leading country under this gold standard system (see Weatherford 1997, p. 162).
- 115.
- 116.
Flandreau and Ugolini (2011), p. 47.
- 117.
Galbraith (1975), pp. 31 a.f.; Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 275.
- 118.
Pdoa-Schioppa (2011), pp. 51–73.
- 119.
- 120.
Graeber (2012), pp. 46 a.f.; Galbraith (1975), pp. 36 a.f.
According to Galbraith, this debate is indistinct, albeit wholly recognizable, still continuing to the present day. It concerns the basic question where economic change originates, either with those who are responsible for money creation (in our economy, mainly private banks providing credit to other economic agents), or with those who produce. Otherwise put, the question is if money (should) influence(s) economy, or if money should respond to the economy. (See Galbraith 1975, p. 36.)
- 121.
Galbraith (1975), p. 36.
- 122.
- 123.
See for instance, as regards the Bank of England, Galbraith (1975), p. 34.
- 124.
Today, private banks still hold a central position in the process of creating “scriptural money” to the extent that, in most countries, the quantity of scriptural money is much larger than the quantity of chartal money, as a result of which scriptural (hence: privately created) money has become the primary form of money.
- 125.
See for instance Treyvaud (1972), p. 166.
- 126.
Korteweg (1970), p. 45.
- 127.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), p. 274; Middelkoop (2014), p. 54.
- 128.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), pp. 196 a.f.; Galbraith (1975), p. 19.
- 129.
- 130.
Deweirdt et al. (1997), pp. 43 a.f.
- 131.
Albeit other means of use are also usually agreed upon, such as access to scriptural payment techniques.
- 132.
Harari (2014), p. 343.
- 133.
These will here not be summed up in detail, as they are basically all based upon some elementary basic principles of banking. As has been remarked by Galbraith:
The rule is that financial operations do not lend themselves to innovation. What is recurrently so described and celebrated is, without exception, a small variation on an established design, one that owes its distinctive character to the aforementioned brevity of the financial memory. The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version. All financial innovation involves, in one form or another, the creation of debt secured in greater or lesser adequacy by real assets. (See Galbraith 1990, p. 19.)
- 134.
De Grauwe (2012).
- 135.
Banks and the banking groups they eventually formed, hereby became also more and more dexterous in applying company law techniques in order to expand, in many cases even on a global scale. Banks for instance got specialized in dividing their various activities into subsidiaries. Shares of the latter were sometimes even made available to the clients of the bank who, in many cases, were hardly aware that an investment product offered by their bank constituted a risky participation in a branched-off (special purpose) investment vehicle.
- 136.
See further Friedman (2002), p. 47.
- 137.
For a general description of the bank lending mechanism, see e.g. Hughes (2006), pp. 9 a.f.
- 138.
Deweirdt et al. (1997), p. 30.
- 139.
- 140.
Bogaert, Kuran-van Hentenryk and Van der Wee (2000), pp. 343 a.f.
- 141.
https://www.facebook.com/pages/StopBanque/119038221489346 (last consulted on October 21st 2014).
- 142.
Willsher (2010).
- 143.
Galbraith (1977), pp. 166–167.
- 144.
- 145.
Ferguson (2009), p. 31.
- 146.
Hughes (2006), p. 10.
- 147.
Byttebier (1994), pp. 1497–1574, especially p. 1518, no 29 a.f.
- 148.
See also Galbraith (1990), p. 19.
- 149.
In some jurisdictions, legislators have made it mandatory to establish some elementary deposit guarantee mechanism; see for instance “Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes” (OJ L 135, 31/05/1994, pp. 0005–0014), as in the aftermath of the financial crisis of 2008 amended by “Directive 2009/14/EC of the European Parliament and of the Council of 11 March 2009 amending Directive 94/19/EC on deposit-guarantee schemes as regards the coverage level and the payout delay” (OJ L 68, 13.3.2009, p. 3–7).
For an overview of the European policy, see http://ec.europa.eu/finance/bank/guarantee/index_en.htm#maincontentSec2 (last consulted on April 13th 2016).
- 150.
- 151.
Schemmann (2013), mentioning several examples thereof.
See also Galbraith (1992), pp. 48–49:
Similarly, support to failing financial institutions—the great savings and loans rescue and later that of the commercial banks—is a fully defended function of the government, however evident the financial extravagance and extensive and visible larceny that made it necessary. Were the appropriations for these rescue operations applied instead to government expenditures for welfare, they would be deemed burdensome and otherwise wholly intolerable.
- 152.
As regards the Belgian situation, see e.g. Michielsen and Sephina (2009), pp. 187 a.f.; Peersman and Schoors (2012), pp. 68 a.f.; see also Commissie voor het Bank-, Financie- en Assurantiewezen, Jaarverslag 2008–2009.
- 153.
Martin (2013), p. 13.
- 154.
In recent times, one may for instance witness the emergence of “new” techniques of making the supply and demand for credits match without intervenience from specialized financial institutions, such as, for instance, technique(s) of “crowd funding”. (See e.g. De Buysere et al. 2012; Willermain 2015, p. 3; Levy Morelle 2015, p. 302; Raes 2015; Lewalle 2012, p. 224; Belleflamme and Lambert 2014, p. 288.)
- 155.
- 156.
- 157.
- 158.
Shuster (1973), pp. 1 a.f.; Hollenberg (1942), p. 103.
For critical reflections on the “national character” of money, see Pdoa-Schioppa (2011), pp. 51–73, especially pp. 57–58:
Under the influence of deep-seated forces ranging from technology to the rise of the nation state and to the growing political influence wielded by the masses, the creation of money was freed from the blind influence of gold discoveries and entrusted to human discretion. This permitted greater progress toward more rational policies, but also to surrender to the temptations of nationalism and demagogue. New risks arose, in the form of instability at the domestic and the international levels.
- 159.
Such as, specifically in the international sphere, inter alia: (1) currency valuation (exchange rate mechanism); (2) exchange restrictions; (3) correction of balance of payments disequilibria and (4) international liquidity. (See Shuster 1973, p. 1.)
- 160.
Shuster (1973), pp. 1–3.
- 161.
- 162.
- 163.
Hollenberg (1942), p. 103.
- 164.
De Grauwe (1994), pp. 1116–1117.
- 165.
Fase and Vleminckx (1995), pp. 57 a.f.
- 166.
Steger (2013), pp. 41 a.f.
- 167.
Van der Borght (2014), p. 2, mentioning that in 2014 China became the world’s biggest economy.
- 168.
- 169.
Referred to by Chomsky as the result of the exportation of American values (as those especially took shape under the Reagan-administration) (see Chomsky 1999, pp. 68 a.f.).
- 170.
Stiglitz (2006), pp. 7 a.f.; Khor (2008), pp. 215–259, especially pp. 216 a.f.; Steger (2013), pp. 41–43; Sono and Kanda (2010), pp. 506–516; Berend (2006), pp. 263 a.f.; Chomsky (1999), pp. 65 a.f.
For further considerations on this topic, see also further, at marg. 172 a.f. of Chap. 3 of this book.
- 171.
- 172.
- 173.
An important factor determining the “easiness” of such availability may be the cost of production. In a globalized economy, probably all goods thinkable can be produced on any place on earth, however not at the same cost. As a result of several factors, among which especially the cost of labor, producing goods in one country may be a lot cheaper than producing the same goods of a same quality in another country. Taken into account the impact of transactions costs (among which the cost of transporting the goods), production is in such a case likely to shift to the country where it will be the cheapest. As a result, the impact of production costs, among which particularly the cost of labor, may have an enormous impact on the international trade flows, which has especially become clear during the last decades (especially since the liberalization of world trade by several treaties, among which especially the WTO-treaty). (See also Chomsky 1999, pp. 68 a.f.)
- 174.
- 175.
http://www.imf.org/external/pubs/ft/aa/index.htm (last consulted on October 29th 2014). See also Shuster (1973), pp. 5–6.
One of the key stipulations of this treaty with regard to the freedom of payments is its Article VIII, Section 2:
Section 2. Avoidance of restrictions on current payments:
(a) Subject to the provisions of Article VII, Section 3(b) and Article XIV, Section 2, no member shall, without the approval of the Fund, impose restrictions on the making of payments and transfers for current international transactions.
(b) Exchange contracts which involve the currency of any member and which are contrary to the exchange control regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the territories of any member. In addition, members may, by mutual accord, cooperate in measures for the purpose of making the exchange control regulations of either member more effective, provided that such measures and regulations are consistent with this Agreement.
- 176.
Ferguson (2009), p. 31.
- 177.
Mertens de Wilmars and Lucas (1973), pp. 145–165, especially p. 150.
- 178.
- 179.
Often, this conversion possibility was governed by bilateral treaties between the countries involved.
- 180.
For further reading, see Tew (1977).
- 181.
As publically announced by then president Nixon in a famous television discourse on 15 August 1971 (see https://www.youtube.com/watch?v=iRzr1QU6K1o; last consulted on January 22nd 2016).
- 182.
Mertens de Wilmars and Lucas (1973), pp. 145–165, especially p. 150.
- 183.
One may wonder whether the USD itself has not somehow escaped the applicability of this way of reasoning. As pointed out by Emmanuel Todd, for a long time, the general acceptance of the American dollar as monetary reserve has been in contradiction with its weak export position during the same time periods. (See Todd 2003, p. 88; Todd 2002, pp. 106–107, having pointed out that
the American dollar has remained fairly strong despite having the largest deficit in world history. Why? Because the world’s money has tended to flow to the United States. Everywhere, companies, banks and institutional as well as private investors decided to buy dollars thus keeping its value high. In this context these dollars do not serve to purchase consumer goods; instead, they allow direct investment in the United States or indirect investment through treasury bonds, as well as corporate stocks and bonds.)
- 184.
The IMF disposes of mechanisms for tackling these problems, a fact which, in recent times, in some cases seems to have made the monetary and financial problems the world is facing even worse (as may for instance, be illustrated by the notorious example of the financial and monetary problems Greece has been facing in the aftermath of the severe financial crisis of 2008).
- 185.
Several treaties exist according to which the member states have agreed upon the convertibility of their currency, among which the IMF-treaty itself.
- 186.
See e.g. http://www.imf.org/external/np/exr/facts/hipc.htm (last consulted on October 24th 2014).
See also Cohen (2008), pp. 150–179, especially p. 167.
- 187.
Restrictive and protectionist practices of which many were contrary to the principles referred to at marg. 134 adopted in the 1930s hereby served as an important source of inspiration for the IMF treaty.
- 188.
See https://www.ecb.europa.eu/ecb/history/emu/html/index.nl.html; last consulted on November 27th 2014.
- 189.
For further reading, see Zilioli and Selmayr (2001).
- 190.
See http://www.imf.org/external/about/govstruct.htm; last consulted on November 27th 2014. See also Bergsten (1998).
- 191.
- 192.
- 193.
See furthermore Foucault (2008), pp. 199–200:
There is [equally] an effect on international competition, inasmuch as the existence of different social security regimes in different countries means that international competition is distorted, and distorted to the detriment of countries with the most comprehensive social insurance cover for risks. That is to say, here again there is a source of increasing unemployment. Finally, and still due to this increase in the cost of labor, there will be a speeding-up of industrial concentration, and the development of social security has obvious economic consequences.
- 194.
- 195.
- 196.
Khor (2008), pp. 215–259.
- 197.
- 198.
Stiglitz (2006), p. 134.
- 199.
Stiglitz (2006), p. 134.
- 200.
- 201.
See also Eichengreen (2008), pp. 210 a.f.
- 202.
Ronse (1992), p. 77.
- 203.
The question thus becomes how many “Apples” our planet can assimilate, or even generate and, on top of that, if these ever will be able to supply the world with new, high-tech products at an ever increasing frequency.
- 204.
Sassen (2014), pp. 35 a.f.
- 205.
This is certainly the solution defended by economic neo-liberalism. (See already Foucault 2008, p. 199.)
- 206.
For these, adherence of neo-liberal ideas can be considered of being completely detrimental, as the implementation of the neo-liberal thought good is completely opposite to the interests of the poor classes.
- 207.
It has already been argued by others that such a world shaped in accordance with neo-liberal ideas lies not all that far from the society model described by Aldous Huxley in his timeless novel “Brave New World” (1932). (See Ongenae 2014, pp. 44–45, especially p. 44.)
- 208.
Boccara et al. (2011), pp. 207–221, especially p. 213; Ingham (2005), p. xxii.
See also Ingham (2005), pp. 222–224, especially p. 237:
Money’s transformation from, in Simmel’s terms, “substance” (commodity) to pure “function” as an acknowledgment of debt (promise to pay) expressed in a money of account and issued by states and banks involved the realization that money was itself a social relation.
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Byttebier, K. (2017). On the Conventional Nature of Money. In: Towards a New International Monetary Order. Economic and Financial Law & Policy – Shifting Insights & Values, vol 1. Springer, Cham. https://doi.org/10.1007/978-3-319-52518-1_2
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