FORUM: Christine Desan’s Making Money/ Roy Kreitner, Reenergizing Political Economy

Roy Kreitner

Roy Kreitner teaches courses on private law, legal history, and law and political thought at Tel-Aviv University’s Law School, where he has been on the faculty since 2001. He received an S.J.D. from Harvard Law School, an LL.B. and an M.A. (Comparative Literature & Semiotics) from Tel-Aviv University, and an A.B. from Brown University. He has been a Visiting Professor at the University of Virginia and at the University of Toronto. He is the author of Calculating Promises: The Emergence of Modern American Contract Doctrine (Stanford University Press, 2007). During 2009-2010 he was a fellow at The Radcliffe Institute for Advanced Study at Harvard University and an American Council of Learned Societies Fellow. In 2010-2011 he was a visiting researcher at the Institute for Global Law and Policy at Harvard Law School.  For their patience in discussing the ideas presented here, he wishes to thank Christine Desan, Chris Tomlins, David Grewal, and Mickey Zar.

Reenergizing Political Economy: A Methodological Reflection

Christine Desan is the eye of an intellectual storm. She has become a magnet for a large group of scholars and a significant group of advocates, some of whom have begun to recognize themselves as linked in networked relations. For more than a decade, Desan’s work has been revitalizing multiple questions regarding the relation between the history and design of money and the development of capitalism. Desan’s answers to those questions revolve around the politics through which money systems are engineered and maintained, highlighting what is special about the money engineered in capitalism. The upshot of that work opens to fresh examination a black box often considered beyond democratic accountability in economic systems that aspire to anything like modernity. In essence, Desan has been working to reveal how institutional arrangements typically considered necessary in modern economies are actually open to choice, and how choice goes unrecognized, becomes buried, naturalized to the point of invisibility.

Of course, the conditions for this intellectual storm are not of Desan’s own making. The financial crisis of 2008 (and beyond) spurred a great deal of questioning about the basics of the financial system, both in terms of its sustainability, and soon after that, in terms of its contribution to growing inequality. To put it bluntly, many observers who had been sanguine about the working of the financial system as an uninteresting feature of the economic background of their lives were struck by its potential to wreak havoc. People began to intuit that the financial crisis was more generally a crisis of capitalism. Initial intellectual queries focused directly on the category of finance, and popularized a new term: financialization. They began to catalogue the ways the financial system was not simply a service industry, facilitating production and distribution, but an independent driver of the direction of economic activity. But Desan’s work takes that set of inquiries to a more fundamental level, one that questions the very building blocks of finance, located primarily in money itself. It consistently points to the fact that to understand finance, we have to master the internal logic and development of money.

At first glance, it is perhaps less than intuitive that a legal historian would be the eye of this particular storm. In fact, however, it is an old insight that, “Money is a creature of law. A Theory of money must therefore deal with legal history.”[1] The insight is crucial, because the building blocks of the monetary system are legal rules, ranging from legislation defining the system’s constituent parts (what is the unit of account? what is a debt? what counts as final settlement of a debt? what is a bank? who can issue something called money?) all the way through the regulations that govern the day to day workings of its features, from the treasury through the central bank and the rest of the banking system, and onward through the entire system of commercial exchange. And yet, the insight is not enough, because on its own the recognition that a monetary system is built of legal rules is apt to leave the impression that those rules are simply the technical consolidation of a set of organic practices and conventions. In Desan’s constitutional theory of money, however, the legal realm is precisely where design transforms into practice.

The centrality of law for understanding money has had its ups and downs (over centuries), but seems over the past decade to have gained a significant foothold in scholarship.[2] Nonetheless, it is again not enough to explain why it is Desan’s historical work that sits at the center of a whirlwind of activity. To explain that phenomenon, we have to look not only at the content of Desan’s work, but also at the form of inquiry she has pursued. In what follows I will attempt such an explanation. The key, I will suggest, lies in a combination of three orientations typically dealt with separately, but whose interaction allows for a comprehensive vision missing from any of the angles in isolation.

My analysis of these orientations will be impressionistic and incomplete. The goal is not to offer a water-tight scheme for categories of thought, but rather to suggest something about what makes Desan’s the kind of work that generates such intensive and diverse intellectual energy. Consider then, three different registers of inquiry for the student interested in understanding some social phenomenon or mechanism. The object of inquiry could be a relatively specific institution, like the business corporation, or something more broadly systemic, like money or like capitalism (with perhaps endless possibilities for different levels of specificity between them). In practice the three registers will overlap and possibly blur, and only a reductive account would attempt, as I will here, to distinguish among them sharply.

I will call one register analytic. In this brand of inquiry, the scholar tries to reduce complex reality to some core, recognizable features, whose explanatory importance extends beyond the specifics of a given example, including the example that generated the explanation. Ideally, an analytic travels; it can be employed in explanation across contexts, spatial and temporal. Economics and economic history are often animated by this style of inquiry. So, for example, the principal-agent problem becomes a lens through which to analyze the development of the business corporation and to evaluate corporate law – wherever and whenever they emerge; collective action problems (like “free riding” where a resource is open-access) become the lens through which to analyze resource management and the role of private property in preventing depletion.[3] In the money and finance fields examples include Gresham’s Law (bad money drives out good), and the Mundell-Fleming trilemma.[4] For the analytic register, concrete details help to make concepts visible, but explanatory power comes from abstracting away from the concrete case.

A second register of inquiry is the historical. At the risk of exaggeration, in this style of inquiry context and contingency are everything. The historian who gets deep enough into the weeds will present a concrete, local history that argues for itself as a special case, always too rich to be replicated. For this style of work, it is not that concepts or theories (the stuff of the analytic register) are unimportant, as a matter of necessity. But the typical outlook is that facts and details overrun concepts, which might be useful as starting points, but whose explanatory power wears thin as the individual case is examined in depth. In the field of the history of money in England, Nick Mayhew’s Sterling: The Rise and Fall of a Currency, and Martin Allen’s Mints and Money in Medieval England are examples.[5] Each makes an argument for a deeply contextualized historical narrative, putting together elements of a story absolutely specific to England’s monetary development. Such histories relish nuance, and while they may offer hints as to limiting factors that could be relevant elsewhere, their focus on contingency highlights historical events in their singularity, as concatenations of details that would not produce explanations outside of the particular context they examine.

Finally, the third register of inquiry deals with ideas and ideology, mapping the intellectual structures through which contemporaries understood their surroundings. Such inquiry is often crucial in order to make sense of what historical actors thought they were doing, and what they were capable of envisioning. At its most capacious, this register of inquiry locates ideas as a necessary component of historical development, indeed as part of the conditions of possibility of historical events. Reigning ideas condition the imagination; they exert a sort of gravitational pull on vision. And crucially, ideas are wound tight into the structure of institutions; ideas and ideology form the core of the felt legitimacy that allows modern institutions (especially the institutions of the modern state) to function, and to rely on a high degree of compliance. Such histories of what might be termed enabling ideas abound in intellectual history, ranging from the broad brush,[6] to the fine grain,[7] and much in between.[8]

Admittedly, the sharp distinction among these registers of inquiry is exaggerated, but there is yet some truth in the view that the registers are typically pursued in separate projects and by scholars with different skill sets. Now and then, however, someone manages to combine the three registers of inquiry in a way that exposes the problematic nature of their distinction. In other words, it is not simply a matter of writing a history that goes through each of the registers, as a series of perspectives. Instead, the combination of registers shows how each is necessary to the other: the level of analysis is necessary to grasp what kinds of historical detail might be relevant, but the historical feeds its way back into the analytic, changing its basic elements. And ideas turn out not to be justifications after the fact, but actually to have a formative role on how the historical actors proceed. Ideas shape the way action evolves, again, changing the basic elements of analysis.

At this level of descriptive abstraction, perhaps this combination of registers sounds mysterious. But for some it will have a familiar resonance, because in essence it tracks what Marx and Engels called the method of political economy when they distinguished their work from that of the bourgeois economists. For Marx and Engels, the opening gesture of a critique of political economy was the claim that political economy must be a historical science. At its most basic level, the claim was that bourgeois economists could not produce adequate analysis, because they ignored historical difference. Bourgeois economists assumed gain-seeking individuals as the basic component of all economic systems across time, missing the fact that such individuals were a recent invention, and thus completely misconstruing how different systems create value (including surplus value). At a deeper level, Marx unpacked the question of how property holding and gain seeking individuals actually emerge, including the idea structure necessary to grant such a system its role as the lens through which to understand reality. It is here that the ideological function is part and parcel of social development generally–it is in some sense false (many people misconstrue the meaning of their own social relations), but productively so. Legitimating ideas are present in some form in every complex social system, but they are especially crucial when it comes to capitalism, which is that social system based on denial of its own social basis. Under capitalism, commodities take on what seems like an objective life of their own, and value appears to arise from the dispersed and unorganized choices of individuals engaged in trade (people come to believe in the economy or the market as a spontaneous order). Historical specificity, for Marx, shows that the elements of the analytic for understanding capitalism are different from those necessary to understand feudalism or other social systems. And idea structures are a crucial performative part of the historical difference.

The analogy to Marx is no coincidence, in methodological terms. One of the intriguing aspects of Desan’s oeuvre is that there is a sense in which it radicalizes Marx’s own analysis of capitalism, by performing a deeper historicization of what Marx called the “dazzling form” of money.[9] But for my purposes here, the analogy is merely a waystation in describing how the three registers of inquiry mutually condition one another. In order to make that description fully accessible, there is no option but to sketch out, in summary fashion, how Desan’s work has fused these registers.

In Desan’s hands the historical, the analytical, and the realm of ideas comprise an irreducible bond: the history takes on meaning in light of a particular analytic; the analytic develops through historical contingency, ideas are necessary to create the conditions for experimenting in contingency. I will tackle these ideas, somewhat artificially and for the sake of exposition, one after the other.[10] In each register, Desan generates new questions and offers bold answers, answers whose interaction inflects the understanding in what seemed at first to be a separate register of inquiry. By the end of the route, I hope to show that they are inextricably intertwined.

In the analytical register, Desan raises basic questions, and also points to a particular feature typically underexplored. The analytic asks how money works: How is it created? How does it achieve its capacity to circulate? How does it measure? What kinds of functions can it perform? Crucially, beyond its initial creation as a mechanism, how does it expand? Ultimately, how does money generate different economic and political formations?

The bold analytical claim is that money is a governance project, a legal institution for mobilizing the resources of a group of people while creating a common measure of value for those resources. Creating that common measure facilitates the management of resources in two important ways: it allows for a rationalization in the extraction of resources (by the ruler, or what Desan generally calls the stakeholder); and it creates the conditions under which people can easily trade those resources, thus engendering their production. Desan’s account turns standard mythologies of the development of money on their heads. In those mythologies, disorganized individuals trade, and eventually understand that they can make their trade more efficient by settling on a common measure of value they locate in the precious metals. The stakeholder, the ruler or state,[11] in those models, is a latecomer who arrives to facilitate efficiency gains by standardizing the use of the common measure by coining.

Desan’s account, by contrast, begins with an existing community whose rulers have the power to obligate individuals. The power to obligate a polity’s own members is perhaps the core of sovereignty, but its connection to money is often obscured. The obscurity dissolves when we recognize the fact that the state obligates its members ex nihilo–the subjects of any sovereign entity are indebted to it, by virtue of its originary power to create that relationship. In other words, the state creates free-standing obligation. Thus, once it singles out a particular resource (even if that resource is otherwise worthless, or merely a token) as the mode of extinguishing that free-standing debt, every member of the community has reason to seek that particular resource.

The power to obligate members of the community—expressed in modern, and only slightly less general terminology—is the state’s power to tax its citizens. When it singles out a particular resource, or token, as the mode of settling the original debt, it guarantees a demand for that resource. Further, if it is willing to take the token from anyone who presents it, the token can circulate among members of the community until their taxes are due. The token, whose value in the payment of taxes is standardized by the state, thus become a common measure of value, or in economic parlance, it emerges as the unit of account. It is thus the sovereign power to obligate that undergirds the system of money. Taxes, far from being external to either money or trade are actually at its core: taxes drive money.

Thus, money is a tool that allows the center to “mark and mobilize material value” in enlisting contributions from the members of a group. When there is no common measure of value, trade must remain to a great extent sporadic. It is impossible to account for relative value across goods, and under those conditions no one can risk specializing their productive efforts. Indeed, in the absence of common measures of value there will be limited division of labor beyond the command economy. The result of this analysis is dramatic: creating a common measure of value is the underpinning of trade, or what philosophers might call its condition of possibility.

Creating the common measure of value has far-reaching effects for both the ruler and the members of the community. The state, first of all, gains a degree of flexibility in commanding resources that is hard to imagine without money. When a token embodies value, the state can use it to buy what it needs from anyone, well beyond the present or future obligation of that particular member of the community. The existence of money greatly expands the state’s capacity to mobilize resources as it chooses, making it a supremely effective mode of governing.

The members of the community, meanwhile, experience a change no less dramatic. When the center is committed to receiving its contributions in the form of monetary tokens from anyone holding them, anyone can recognize the token as a standard of value. Thus, the token is useful not only for paying off debts to the center, but crucially for standardizing the value that can be paid within the community for any productive transaction. If we imagine a system where these tokens are first introduced, we realize that they provide liquidity where there was none before. As a new measure of cash payment, the tokens actually make prices possible. And prices allow for relative valuation of any goods produced in the monetized economy.

Yet again, the contrast with standard accounts of the relationship between money and prices is striking. Standard accounts proceed from the assumption that trade just occurs, and then occurs better or more smoothly when money is present as a lubricant. But the valuation, for standard accounts, bypasses money entirely, assuming that goods price goods, or that exchange is simply barter in an efficient form; money is ostensibly a neutral lubricant whose main function is to express a pre-existing relationship of value. Desan’s account shows instead that the process of money-creation actually constitutes the price system.

Within that process, coin carries with it two kinds of value: in a primary sense, coin is that resource with which to settle a debt to the state – whatever the token is made of, it carries the fiscal value of paying taxes. Second, more subtly but with dramatic implications, the token acquires value for its very liquidity as the most tradable resource. Because virtually everyone has a need for the tokens (in order to pay taxes), virtually everyone is willing to accept them in trade. As the ultimate liquid asset, the tokens take on a premium for that tradability, a cash or liquidity premium.

The upshot of the analytical picture is striking. Money is a constitutional project for managing the relationships between the center and the members of the polity, and among the members of the polity themselves. Prices and the markets they enable are not discovered by traders; they are engineered by the center. Creating a unit of account takes work, and maintaining it requires administrative and political energy. 

In the end, the crucial questions about that constitutional project will not be whether to have money, but rather precisely about how to engineer the system, and this is where the historical register breaks into the analytic. The diversity of historical experiences in engineering money and the implications of that diversity form the stage for Desan’s historical investigations, which cover a thousand years, detailing how and with what consequences English money transformed from the silver penny of medieval Britain to the early modern notes and deposits of the Bank of England. The broad sweep is motivated: it is necessary in order to show three distinct stages in the development of money. In turn, conceptualizing the development of money according to those stages provides the explanatory frame for the major historical claim, which is that the shift to the third stage of development is the lynchpin in the coming of capitalism. This framing is important for understanding the combination of analytic and historical concerns. The justification for Desan’s synoptic view is that a sufficiently robust analytic of money can only be achieved by perceiving tectonic shifts in its history. History is, if not indispensable, at least a crucial tool for conceptualizing money; at the same time, the analytical concepts direct our historical attention and generate explanations unavailable without them. History and analysis need one another.

The first stage in Desan’s history reaches back to the seventh and eighth centuries when Anglo-Saxon kings reintroduced coinage into Britain, after its disappearance with the breakdown of Roman rule. Anglo-Saxon kings reconstructed political power, and one of their primary tools was reintroducing coinage. Early medieval English money is a central piece in the puzzle of establishing the basis of governance associated with sovereignty. And the project of establishing sovereignty developed in tandem with developing a market. The key go-between linking one with the other was medieval minting. By establishing minting on demand, English kings set up a mechanism for expanding money beyond their direct spending needs. The mode of injecting additional money into circulation was by selling coins for silver. People could bring bullion to the mints, and receive the bulk of it in return as coins. Coins could be traded while silver bullion had only a limited market among merchants. Thus, as long as the coins were more valuable than the silver (that is, as long as there indeed existed a cash premium), people would bring silver to the mints. This meant that people who wanted cash were paying the sovereign for the privilege of having it. But it also meant that a significant portion of the money supply was generated precisely in response to public demand. Since consumption goods are only bought with coin, the cash premium becomes the mechanism that configures a market. The public generates the production of coin by paying for it, so long as coin buys the things the public wants. The state and the members of the community are making money and making markets at the same time.

The second stage in the development of money retains a fair amount of continuity with the stage just recounted. In late medieval and early modern England, money was created directly by the sovereign, and paid for by those citizens who held silver and brought it into the mints to be coined. Coins carried a liquidity premium, part of which was thus paid to the sovereign by individuals in order to make money. The directionality of the system and the stakes of the negotiation were clear: citizens paid the sovereign for liquidity, while the sovereign committed to upholding the value of the coin by maintaining taxes.

However, there are also important discontinuities between the stages. The changes from the first to the second stage revolve most importantly around additional modes of expanding circulating credit. By the mid-fourteenth century, England’s answer to the challenges of managing a money supply based on silver coin had solidified into keeping the value of the penny high, while imposing comparatively heavy taxation.[12] The choice reflected an accord between the Crown and Parliament, under which Parliament was open to levying significant taxes, while the Crown was charged with maintaining the value of the currency. But as the responsibilities (or the aspirations) of the Crown grew, the limited money supply became more of a problem.

The English solution was born of experiments in managing and circulating public debt. The central innovation lay in an unlikely instrument: the wooden tally. Tallies were carved wooden sticks that recorded debts of the Crown to their holder. They were issued early on (as early as the 12th century) as receipts, proving a payment to the Exchequer. But by the 14th century the Exchequer was issuing tallies directly to creditors against anticipated tax revenue, which the holders of tallies could recover from tax collectors. Tallies became such an important part of the supply of circulating credit in the 14th and 15th centuries that for most of the period, around half the revenue of the Exchequer was collected in Tallies of Assignment.

It would be hard to exaggerate the importance of the tallies. They were in fact a financial innovation that anticipates many of the features we currently associate with a tradable public debt, functioning somewhere between paper money and government bonds. Importantly, tallies were closer to cash than to bonds in a significant feature: they did not bear interest. And this feature crystallizes the distinction among the stages of monetary development. On the one hand, tallies separate themselves from the unifying monetary structure of coin. Pennies hold together the idea of tax anticipation with their function as the medium of exchange. In that sense, they join the entire chain from the center through to the members of the public, including markets in consumption goods.  For a tenant farmer, an identical penny buys a farm tool, settles a tab at the alehouse, and pays a tax or a rent. The tally, on the other hand, is not an all-purpose vehicle. It actually creates and thrives on a special market in debt itself. And yet, as with the penny, it is the public, rather than the Crown, that pays for the privilege of this expansion of liquidity.

The third stage and transformative event in creating modern money is the establishment of the Bank of England and the monetary mechanism it ushered in. The Bank and the new monetary mechanism linked public debt and money creation more tightly ever before, and cemented the shift toward government paying for liquidity. The mechanism is basically similar to the core of modern central banking, and once established in England, it spread around the world like a virus. A condensed account of the mechanism of money creation under the Bank highlights its novelty. With the establishment of the Bank, the government takes a large loan. Crucially, the loan is not in coin, but in the Bank’s own promises to pay, or banknotes. The government spends the banknotes into circulation, and agrees to take them in payment of taxes. Therefore, the bank’s promises to pay (in coin) are significantly better than a private person or corporation’s promise to pay, as they are backed by the same fiscal value as money: they are the government’s obligation, in the sense that the government will take them in payment of obligations. In essence, the Bank was a new creature, a bank of issue.

This was a new way to produce cash. Up until then, government decided on the core of the money supply, allowing the public to draw on expansion of circulating credit by paying for it. With the establishment of the bank, the tables were turned. The very core of the money supply would be determined by the interest calculation of lenders: the money supply would be expanded or contracted in response to the calculation of profits of the bankers. And government would contribute to payment for the expansion: its circulating debt was the basis for the expansion of the money supply by the Bank, and it was now (and would remain) interest-bearing. All of this required additional government action, as the government had to persuade its creditors to accept banknotes as cash. But the key to that mechanism was simply accepting the banknote itself in lieu of specie payment for taxes or other obligations. The government effectively made banknotes equal to gold and silver coin. The implications of this shift were momentous. Broadly drawn, this was the monetary backbone that would institutionalize capitalism. The fundamental innovation is the placement of a bank with a profit motive at the source of money creation. Instead of the traditional acknowledgment that the state itself determines its needs in terms of mobilizing resources, a profit-oriented institution, a specialist in lending to markets, controls the creation of money and the expansion or contraction of its supply. While the ruler’s needs were bounded by his imagination for public projects, profit is purely numerical and in principle limitless. Enormous expansion would be the order of the day, and with it would come enormous profitability for a banking sector effectively subsidized by the public.

To understand how the new mechanism could be accepted, we must move to the realm of ideas. The new mechanism for creating money interacted with new and old ideas about value, but in particular fueled an ideology that distinguished sharply between markets and politics. Bank-created money had the potential to generate significant unease, so the accounts supporting the new system portrayed banks, not as creators of money, but rather as merely disbursing substitutes for gold as money, or simply marking promises to pay. The combination of highly managed expandable bank money with the image of a commodity anchor that makes value a-political would become the centerpiece of the modern monetary imagination. Economists hopped on this bandwagon with gusto, modeling the economy as lubricated barter, assuming away any price for liquidity (positing liquidity as a free good), and neutralizing money except for the very short run.

Desan’s explanation of the emergence of the Bank (and of the ideology of the gold standard that followed on its heels) reminds us that the center retains a crucial place in the creation and management of a money system. But that explanation also shows how a vision of market-led money could gain plausibility and even become dominant, because market-oriented actors indeed occupy the driver’s seat in modern money systems. The idea that the impetus for trade makes markets, which then call money into existence, is no simple mistake. It is nothing less than an inversion of the proper way to understand the relationship among states, money and markets. The state, or stakeholder, in fact still forms the hub of a community and retains the authority to move money-making in new directions. But so much of the work of making money has been privatized that the stories of money’s neutrality manage to obscure the role of the center almost entirely. That is, until crisis hits and the state is called upon to rescue the private market.

The analytical, the historical, and the ideational thus coalesce. On the history side, relinquishing nuance, the claim is that the state creates capitalism by largely privatizing and subsidizing the production of money. The mechanism for making money is the key to the emergence of capitalism, because it obscures the ties between politics at the center, and the instantiation of value in decentralized transactions. Money primarily created by profit-seeking bodies for that purpose is the conduit to a system of valuation that makes abstract and thus limitless profit its motivational force. While historicizing capitalism has reemerged as an important concern in the academy of late, this is probably the boldest assertion about how to understand capitalism’s emergence in at least a generation. It tells us a great deal, positive and negative. Negatively, capitalism is not a long simmering human yearning waiting for slow release; it is not a matter of tying the hands of the state to create credible commitments; it is not the result of a chain reaction based on the development of a particular commodity or of the slow expansion of private merchant activity. On the positive side: it is an event; the event is primarily driven by state actors; it is engineered and managed through the use of a long series of legal rules that support each stage of change.

On the analytical side, the upshot is that many of the commonplaces of socio-economic thinking are upside down: the conventional story starts with trade, which makes money, and adds political actors as parasites whose best role is to collect minimum taxes to support a neutral infrastructure (courts, perhaps roads, etc.). In other words, trade makes money, taxes fund the small bit of public work needed to allow trade. The analysis here goes the other way round: taxes drive money; money makes markets. The striking shorthand would be that taxes make markets.

Crucially, analysis itself has a central historical role, by shifting ideas about what can and cannot be achieved. The chain connecting money, taxes, and trade, is a narrative about governing a collective. Taxes and trade are instrumental to mobilizing resources in particular ways – those ways determine possibilities for the community, they structure its imagination, and they route its politics even as they are results of those politics. More than simply enriching each register by looking at them together, the combination reveals a structure that is open to manipulation and even transformation at a host of junctions. Perhaps the most important lesson from the work is that monetary mechanisms rely on and intervene in the core political task of valuation, at every turn. There is perhaps no activity that could be farther from neutral. And when economists develop a concept like money neutrality, they are not describing an existing world, but contributing to one that might exist; economics (like all scholarship) is a performance art. Money neutrality is not simply an unattainable ideal, akin to the way physics imagines a frictionless plane, useful for modeling even if nonexistent in practice; in fact, neutrality is a veil over the continuously changing possibilities for governments and individuals.

The combination of registers in Desan’s work generates a specific type of excitement. By developing a methodology that succeeds in piecing together disparate modes of analysis, it opens up thought in precisely those places that seemed like dead ends. From a sense of doomed inevitability in the face of forces too complex and too decentralized to be reined in, those engaging with Desan’s work emerge reenergized. The puzzle of how our politics undergirds our economy becomes accessible, and that accessibility leads to new questions, and new aspirations–some of which are geared directly toward monetary design, and others well beyond.

[1] Georg Friedrich Knapp, The State Theory of Money (London: Macmillan & Co., 1924), 1.

[2] Katharina Pistor, “Law in Finance,” Journal of Comparative Economics, 41, No.3 (2013): 311-314; Morgan Ricks, The Money Problem: Rethinking Financial Regulation (Chicago: University of Chicago Press, 2016).

[3] Garrett Hardin, “The Tragedy of the Commons,” Science: New Series, 162, No. 3859 (1968): 1243-1248.

[4] The trilemma, briefly stated: open capital markets, stable exchange rates, and policy flexibility are three possible monetary goals, but a policymaker can only have two of them at a time; the three cannot be achieved at once.

[5] Nick Mayhew, Sterling: The Rise and Fall of a Currency (London: Penguin, 1999); Martin Allen Mints and Money in Medieval England (Cambridge: Cambridge University Press, 2012).

[6] Albert Hirschmann, The Passions and the Interests (Princeton: Princeton University Press, 1977).

[7] J.G.A. Pocock, The Machiavellian Moment (Princeton: Princeton University Press, 1975).

[8] Joyce Appleby, Capitalism and a New Social Order (New York, NYU Press, 1984).

[9] It would take us too far afield to engage in a full-blown discussion of the ways in which Desan takes issue with Marx’s analysis of money. Given time and space, such a discussion would raise the question of whether Marx’s analysis of money should be read as compatible with Desan’s (reading everything Marx taught about the fetishism of the commodity into the question of the production of money itself) or whether Marx, regarding money, falls prey to errors akin to those of the economists he critiques.

[10] The following draws on a review of Desan’s Making Money (2015) in the Banking and Finance Law Review (2016).

[11] Desan’s terminology offers greater generality (the stakeholder need not be a modern state), but I will use “state” or “center” as a shorthand, acknowledging here that such usage is less accurate.

[12] This solution was in direct contrast to typical practice on the continent, where rulers generally relied on debasement to attract silver to their mints.