Review of “The Currency of Politics”

The money of politics: the political theory of money from Aristotle to Keynesby Stefan Eich (Princeton University Press, 344 pages, $35)

PPolitical neutrality has come under attack in recent years. For critics of neutrality, rules that purportedly exist to protect speech, property, or civil rights actually serve to advance the interests of nefarious groups and should be sites of political conflict. In The money of politics: the political theory of money from Aristotle to Keynespolitical theorist Stefan Eich brings this approach to our portfolios, seeking to elevate money as a “central problem of political theory” and expose the contradictions of any attempt to “depoliticize” it.

A political theory of money seems incongruous: what could high-minded philosophers say about something as mundane as dollars and cents? But one of Eich’s goals is to reveal why money and philosophy don’t seem to be linked — he argues they shouldn’t be. He wants to show that money has always been a philosophically and politically rich subject, and that attempts to depoliticize it are either insincere or foolish. Money, he might say, is always and everywhere a political phenomenon.

Dissatisfied with our economy and convinced that the monetary policy of the developed countries needs to be rethought, Eich recommends that we rediscover the points of view of the bigwigs of philosophy on monetary questions. The bulk of the book consists of a thorough and helpful discussion of the monetary writings of Aristotle, John Locke, Johann Gottlieb Fichte, Karl Marx, and John Maynard Keynes, along with considerations of the political and economic developments that shaped their thought.

Economists argue that money is neutral. They see it as a medium of exchange, facilitating comparisons of different goods and services by reducing them to the same unit. As Locke noted, money is therefore like language, allowing people to understand each other through a shared schema. For Eich, this is an intellectual error that stands in the way of a more democratic currency. Any supposed neutrality is just a cover for a political vision; money is about issues of legitimacy, sovereignty and power. Call his perspective “critical monetary theory.”

Eich begins with Aristotle, admiring his conception of money as an egalitarian mechanism of justice between citizens, before moving on to the modern world. Locke, the villain of his story, depoliticized money by treating it as an emerging tool of a pre-political community. Money, Locke believed, was originally protected by social trust, but eventually needed government defense in the form of the establishment of fiat currency. Like property, money therefore had a paradoxical political character: it deserved the protection of the state but was also “safe from discretionary political interference”. In Eich’s account, this story was a dishonest element of Locke’s larger liberal project, which sought to shield certain areas from political contestation and thereby obscure “the idea that money could itself be a tool politics for justice”.

Eich then considers Fichte, Marx, and Keynes, who each saw through the false promise of a depoliticized currency amid the turmoil of 19th-century Germany and post-World War I Britain. As Eich makes clear in these chapters, philosophy does not occur in a vacuum. Wanting to understand the world around them, these figures could only influence and be influenced by economic debates – whether it was the legitimacy of fiat money, for Fichte; the relationship between money and capital, for Marx; or the gold standard, for Keynes. These illuminating chapters weave together economics and political theory, fields that scholars often struggle to communicate across interdisciplinary divides.

Eich praises these figures not only for their penetrating philosophical insights, but also for their engagement with contemporary economic issues. And he follows their lead in his conclusion, which considers the role of money today. Events such as the 2008 bank bailouts and 2020 Federal Reserve pandemic interventions expose the neoliberal fiction that money can be separated from politics, he argues. If money works like language, then Eich seems to see our central bankers and economists as something like France. French Academy: a coterie of aloof elites, correcting the mistakes of the masses and ensuring that the rich and well-spoken stay on top.

Writing that “money is too important to be left to economists and central bankers alone”, Eich calls for “democratizing money” by turning central banks into “laboratories of ‘open democracy’ and global creation” and establishing a ” new world monetary constitution and a more democratic monetary system in its governance.Heavy on invocations of democracy but light on political details, Eich seems to have in mind an Occupy Wall Street-era social-democratic program in which citizens ordinary people replace central bankers and the financial oligarchs lose their ability to manipulate the system.

The clarion call is disappointing, especially after such lucid philosophical exegeses. Eich does not explain how his practical goals derive from his political observations. If he’s so skeptical of corrupt and irresponsible bigwigs making deals in smoke-filled rooms, why wouldn’t he advocate, say, dismantling the Federal Reserve? If the problem is elite political control over money, after all, why not conclude that the government cannot be trusted to print it? Eich criticizes Locke for asserting that money was apolitical while supporting a government-backed currency, but the same observation could be used to argue that Locke did not go far enough in his depoliticization project and that the Fiat currency itself is the problem. What Eich comes closest to considering this option is to denounce cryptocurrency — which some critics of fiat money see as a solution to the political money problem — as a “dangerous illusion that disguises a power grab.” power”, based on the false “idea of ​​money beyond”. either trust or politics. He may be right, but he offers little basis in principle for this rejection.

In any case, a more serious problem is looming. Even if Eich provided substantive arguments for his political program, they would only justify his thesis if he showed that his political positions flowed from his analysis of money. Eich wants us to see money as a political issue. It is not simply that “monetary policy has distributional implications and is therefore contested”. Its most ambitious concern is to explore how “money can help create and maintain the preconditions for politics, especially democratic politics.” But nothing in his discussion of philosophy or history indicates that thinking seriously about money compels us to any particular political ideal. Eich simply takes it for granted that democracy – whatever he means by that – must be our highest political aspiration.

This unestablished assumption renders the philosophical connection between money and politics ultimately tenuous. Consider Eich’s own formulation of his thesis: “Money is never beyond politics. Instead, the real question is what kind of politics should shape it. That gives the game. If all it means is that the money is affected by our pre-existing political commitments, then we’re back to where we started, with an apolitical medium that can be used to n whatever “type of policy” we already have. But this understanding is precisely what Eich wants to reject, just as Marshall McLuhan rejected the claim that a technology is good or bad depending on how it is used. For Eich, the medium of exchange is the message.

If money is necessarily affected by politics, then one could easily direct a theory of money towards other political ends. As in other areas, the rejection of neutrality goes both ways, raising the stakes for whoever rejects it. Curiously, Eich seems aware of this problem, astutely warning that “calls to ‘politicize’ the money are from this point of view empty – and even potentially reckless – where they fail to articulate what kind of politics are supposed to be injected “. Perhaps a more developed project of “repoliticizing” money might be worth the risk. But before we storm the Federal Reserve and defenestrate the central bankers, we’ll need a clearer idea of ​​who will replace them.

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