What is Money? Finance, Policy, and Society
275 Madison Avenue, Suite 2114
New York, NY 10016
Money seems like a straightforward aspect of our daily lives. But underlying its everyday functionality in facilitating transactions, measuring the market value of goods and services, and serving as a store of wealth over time is a stubborn question about what money actually is. As the economist Perry Mehrling observes, “Money is always difficult, and it is more difficult than ever today.” We often conceive of money as a “neutral” medium backed by some valuable asset like gold or as rolling out of government mints backed by the full faith and credit of the state. We sometimes consider credit and money as fundamentally social constructs based on trust. What is often difficult to grasp is that money is created ex nihilo by private banks through the recording of loans and corresponding deposits. Further, when money is created outside of the banking sector, as with mortgage-dealing “shadow banks,” it can play a role, as we saw in 2008, in destabilizing, almost fatally, the entire financial system. What’s at stake in understanding money?
In this course, we’ll sketch the functioning of our financial system and explore the issues and debates surrounding money. Reading from Ann Pettifor’s The Production of Money, Michel Aglietta’s Money: 5,000 Years of Debt and Power, William Goetzmann’s Money Changes Everything, and others, we’ll examine the historical development of money as an institutional system; its close connection to political power; how money is created; the role of interest rates and monetary policy; and the impact of quantitative easing on asset prices and economic inequality. More broadly, we’ll consider how the monetary system can best be aligned with the interests of society at large, and how to subordinate finance to the needs of the real economy.
Course ScheduleWednesday, 6:30-9:30pm
September 11 — October 02, 2019