The Constitutional Approach to Money: Monetary Design and the Production of the Modern World
Nina Bandelj, Frederick F. Wherry, and Viviana Zelizer, eds., Money Talks, Forthcoming
29 Pages Posted: 30 Jan 2016 Last revised: 16 Mar 2016
Date Written: October 24, 2015
In the modern lexicon, money is pure instrumentality, a colorless medium that transparently expresses real value. Contrary to that trope, however, we can get “inside” money: we can reconnoiter it as a structure entailing value that is engineered by certain societies. Taking a “constitutional approach” to money reveals its internal design, the architecture that creates a commensurable unit of value, enables it to travel, and enforces it as the preeminent way to pay. Seeing money’s internal design opens up new worlds. We can compare the medieval and early American methods of making money and consider how those methods shaped their markets. More remarkable still, we can locate the radical change in money’s design that institutionalized capitalism. That phenomenon arrived when the English government installed the self-interest of commercial actors as the pump at the heart of money creation. The revolutionary redesign produced unprecedented liquidity - the powerful markets and troubling pathologies of modern finance. It also produced an odd and self-protective artifact - the trope that money itself was empty, devoid of design and unworthy of our eye.
Keywords: money, monetary design, constitutional approach to money, Simmel, Zelizer, medieval money, commodity money, bill of credit, stakeholder theory, capitalism, fiscal value, cash premium, supplementary money
JEL Classification: A12, B10, B15, B19, B22, B25, B31, E4, E42, E50, H1, H4, K00, K3, N1, N10, N40, Z1
Suggested Citation: Suggested Citation