Why is Money a Problem?

Abstract

The context of monetary policy is multi-faceted and complex. It is a context which has changed and will continue to change over time, differing from one territory, one state, one zone to another, differing from one system of social reproduction, from one socio-economic culture to another. Few observers would deny that differences in monetary policy are determined to a greater or lesser degree by differences in the operational context of that policy. Institutions of monetary policy have accordingly changed over time in terms of their modes of operation, the instruments employed, the length and intensity of their application and their position within political structures. Many of the arguments supporting the latest reforms in monetary institutions and monetary policy are indeed informed by the perception of such changes and the need to adapt to them: globalised financial markets, intensified world trade, international corporate strategies of production and distribution. Any decent account of monetary policy must thus define such a context, however broad or narrow. A central hypothesis of this chapter is that most mainstream accounts of monetary policy define their contexts too narrowly and, even if they admit to changes over time, still produce absolutised, a-historical prescriptions. These in turn are based on ‘articles of faith’ which have ‘served to justify errors of perception and organization in the implementation of monetary policy whose consequences are occasionally calamitous and almost always unintended’. ¹