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The state as a creature of money


  • Michael Beggs


Recent social theories of money have challenged economic conceptions of it as first and foremost a medium of exchange. Writers such as Geoffrey Ingham and David Graeber have revived the chartalist position that money is essentially a creature of the state, whose primary function is to measure value or debt. In this paper, I argue that this is a wrong turning. I first clarify the conceptual underpinnings of Ingham’s treatment of money as an ‘institutional fact’, a concept drawn from Searle. I clarify the sense in which this argument establishes that the state ‘creates’ money – and show that this sense is quite limited. It is a theory of how something comes to be accepted as money, rather than a theory of why there is money in the first place, and it gives no account of money’s value. Finally, I sketch an alternative way of looking at the relationship between states and money. This recognises that modern states have been shaped in part by strategies with regard to monetary management, with state actors engaging strategically in a system they only partially constitute – so that states are ‘creatures of money’ as much as the reverse.

Suggested Citation

  • Michael Beggs, 2017. "The state as a creature of money," New Political Economy, Taylor & Francis Journals, vol. 22(5), pages 463-477, September.
  • Handle: RePEc:taf:cnpexx:v:22:y:2017:i:5:p:463-477
    DOI: 10.1080/13563467.2017.1240670

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    References listed on IDEAS

    1. Arnon,Arie, 2011. "Monetary Theory and Policy from Hume and Smith to Wicksell," Cambridge Books, Cambridge University Press, number 9780521191135, October.
    2. Knapp, Georg Friedrich, 1924. "The State Theory of Money," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number knapp1924.
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