The document discusses the nature and origins of money. It argues that money is a social construct, not a natural phenomenon, and that its value comes from the trust in the institutions that create and circulate it rather than any intrinsic value. It asserts that money systems have been imposed on subsistence communities and have enabled the extraction of profits. While conventional economics sees money as reflecting real economic activity, this document sees money as having its own political dynamics and impact. It also discusses how the modern banking system allows private creation of money through lending.

1. Economics As If
People Really
Mattered
Week Two – What is
Money?
Mechanics Institute, Limerick
May 2013

2. EBRD – European Bank for Reconstruction and Development

4. The purpose of capitalism is self-expansion – capital begets capital – and it does so by monetizing social value and human labour.
This is a circuit of transformation.
“Historical capitalism involved therefore the widespread commodification of processes – not merely exchange processes, but
production processes, distribution processes, and investment processes – that had previously been conducted other than via a
„market‟. And, in the course of seeking to accumulate more and more capital, capitalists have sought to commodify more and
more of these social processes in all spheres of economic life.”
Immanuel Wallerstein, Historical Capitalism (London: Verso, 2011), 15.

7. Alfred Mitchell Innes. ‘What is Money?’ Banking Law Monthly
(May 1913)
--- ‘The Credit Theory of Money.’ Banking Law Monthly (Jan 1914)
http://dublinopinion.com/2012/07/08/mary-mellor-the-future-of-
money-referenced-articles-from-chapter-one/
David Graeber. Debt: The First 5,000 Years. Brooklyn: Melville
House, 2011

8. Far from being a precious commodity that had become readily accepted through trade
as the barter theorists thought, money as coin has generally been accepted by fiat, that
is, issued and guaranteed by an authority, such as a powerful leader, an office-holder
or a religious organisation.

9. Far from being a precious commodity that had become readily accepted through trade
as the barter theorists thought, money as coin has generally been accepted by fiat, that
is, issued and guaranteed by an authority, such as a powerful leader, an office-holder
or a religious organisation.
Making coin out of a precious metal confuses the role of money as a measure of value
with the value of the coin itself.

10. Far from being a precious commodity that had become readily accepted through trade
as the barter theorists thought, money as coin has generally been accepted by fiat, that
is, issued and guaranteed by an authority, such as a powerful leader, an office-holder
or a religious organisation.
Making coin out of a precious metal confuses the role of money as a measure of value
with the value of the coin itself.
Gold can change value both as a commodity and as a coin in terms of purchasing
power. Therefore gold/silver as a commodity does not ‘have’ a value. It is valued, but
at any point in time the exact value will vary and will need to be designated in some
other form of commodity or money, such as silver or dollars.

11. Money is more helpfully seen not as a ‘thing’ but as a social
form.
‘Sound money’ is a product of society, not of nature.

12. Money is more helpfully seen not as a ‘thing’ but as a social
form.
‘Sound money’ is a product of society, not of nature.
When we say people trust in money we mean that they are
trusting in the organisations, society and authorities that create
and circulate it, other people, traders, the banks and the state.

13. Money is more helpfully seen not as a ‘thing’ but as a social
form.
‘Sound money’ is a product of society, not of nature.
When we say people trust in money we mean that they are
trusting in the organisations, society and authorities that create
and circulate it, other people, traders, the banks and the state.
Money, whatever its form, is a social construction, not a natural
form.

14. Money is more helpfully seen not as a ‘thing’ but as a social
form.
‘Sound money’ is a product of society, not of nature.
When we say people trust in money we mean that they are
trusting in the organisations, society and authorities that create
and circulate it, other people, traders, the banks and the state.
Money, whatever its form, is a social construction, not a natural
form.
It has not inherent value but it has vast social and political
power. (p.11)

15. money rests upon a social and political base, a
combination of social conventions, banking
systems, public trust and state authority.

17. [In monetary economics textbooks]
money circulation through the
financial system is seen as the
outcome of private economic acts,
not as a function of social
relationships and public authority. P.2

24. Legal tender means that the state will accept a designated form
of money in payment of taxes and the state also demands that
everyone else has to honour that form of money when it is
presented as payment for goods or debts.

25. Legal tender means that the state will accept a designated form
of money in payment of taxes and the state also demands that
everyone else has to honour that form of money when it is
presented as payment for goods or debts.
In the contemporary money system, state authorised money is
seen as ‘high-powered money’.

26. Legal tender means that the state will accept a designated form
of money in payment of taxes and the state also demands that
everyone else has to honour that form of money when it is
presented as payment for goods or debts.
In the contemporary money system, state authorised money is
seen as ‘high-powered money’.
It is the money of final payment within the money system.

27. Legal tender means that the state will accept a designated form
of money in payment of taxes and the state also demands that
everyone else has to honour that form of money when it is
presented as payment for goods or debts.
In the contemporary money system, state authorised money is
seen as ‘high-powered money’.
It is the money of final payment within the money system.
The basis of high-powered money is the capacity of the state to
raise taxes and, behind that, the productive capacity of the
national economy. (p.18)

28. IV. Money, society and the ‘real economy
- MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED
LABOUR HAVE BEEN IMPOSED ON PEOPLE WHO HAVE BEEN FROM
SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THE
LAND.

29. IV. Money, society and the ‘real economy
- MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED
LABOUR HAVE BEEN IMPOSED ON PEOPLE WHO HAVE BEEN FROM
SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THE
LAND.
- AS ECONOMIES BECAME MONETISED, PEASANT POPULATIONS WERE
FORCED TO SELL THEIR LABOUR AS LANDS WERE ENCLOSED AND
PRIVATISED, AND OFTEN MORTGAGED.

30. IV. Money, society and the ‘real economy
- MONEY SYSTEMS AS REPRESENTED IN RENTS, TAXES AND WAGED
LABOUR HAVE BEEN IMPOSED ON PEOPLE WHO HAVE BEEN FROM
SUBSISTENCE COMMUNITIES AND WHO HAVE BEEN FORCED OFF THE
LAND.
- AS ECONOMIES BECAME MONETISED, PEASANT POPULATIONS WERE
FORCED TO SELL THEIR LABOUR AS LANDS WERE ENCLOSED AND
PRIVATISED, AND OFTEN MORTGAGED.
- FOR THOSE WITHOUT LAND, JOINING THE MONEY ECONOMY
MEANT OBTAINING SUSTENANCE THROUGH WAGED LABOUR – THE
CIRCULATION AND USE OF COIN FROM THE EARLY MIDDLE AGES
ENABLED RICH LANDOWNERS TO EXTRACT MORE FLEXIBLE WEALTH
FROM THEIR FEUDAL POPULATIONS. (P.19)

31. - Rather than extracting produce or labour, they began to demands
money from their peasant populations.
- Money systems also enabled the emergence of finance capital which
enabled exploitation and the extraction of profit. (P.19)

32. - Rather than extracting produce or labour, they began to demands
money from their peasant populations.
- Money systems also enabled the emergence of finance capital which
enabled exploitation and the extraction of profit. (P.19)
- Money can be an instrument of speculation and a tool of empire.

33. - Rather than extracting produce or labour, they began to demands
money from their peasant populations.
- Money systems also enabled the emergence of finance capital which
enabled exploitation and the extraction of profit. (P.19)
- Money can be an instrument of speculation and a tool of empire.
- Which conventional economics and much of marxist theory sees
money as being a reflection of the ‘real economy’ of production and
exchange, social analyses of money see it as being a phenomenon that
has its own political dynamics.

34. - Rather than extracting produce or labour, they began to demands
money from their peasant populations.
- Money systems also enabled the emergence of finance capital which
enabled exploitation and the extraction of profit. (P.19)
- Money can be an instrument of speculation and a tool of empire.
- Which conventional economics and much of marxist theory sees
money as being a reflection of the ‘real economy’ of production and
exchange, social analyses of money see it as being a phenomenon that
has its own political dynamics.
- Money cannot be neutral; it is the most powerful of the social
technologies. (P.22)

35. The argument of this book is that as money is such a critical
force in the circulation of goods and services and therefore
provisioning, it is vital to question how money is issued and
circulated, owned and controlled. From this perspective money
is more than just a reflection of value in the ‘real’ economy.
(p.22)

36. The argument of this book is that as money is such a critical
force in the circulation of goods and services and therefore
provisioning, it is vital to question how money is issued and
circulated, owned and controlled. From this perspective money
is more than just a reflection of value in the ‘real’ economy.
(p.22)
The so-called ‘real economy’ – (the economy of capitalist
production and exchange) – is in reality an economy determined
by capitalism and by patriarchy. Outside its boundaries lie the
natural world and the un-monetised labour and needs of women,
children and the poor, as well as non-monetised subsistence
economies.

37. vi. Bank credit and fresh air money
The most important aspect of the shift to money issue through bank debt is that bank
can lend money they don’t have.

38. vi. Bank credit and fresh air money
The most important aspect of the shift to money issue through bank debt is that bank
can lend money they don’t have.
Money creation is effectively in private hands through commercial decisions in the
banking system, while the state retains responsibility for managing and supporting
the system, as has become clear through the financial crisis.

39. vi. Bank credit and fresh air money
The most important aspect of the shift to money issue through bank debt is that bank
can lend money they don’t have.
Money creation is effectively in private hands through commercial decisions in the
banking system, while the state retains responsibility for managing and supporting
the system, as has become clear through the financial crisis.
While society collectively bears ultimate responsibility for the failures of the
commercial money creation system, there is no direct influence on the overall
direction od how finance is invested or used.

40. vi. Bank credit and fresh air money
The most important aspect of the shift to money issue through bank debt is that bank
can lend money they don’t have.
Money creation is effectively in private hands through commercial decisions in the
banking system, while the state retains responsibility for managing and supporting
the system, as has become clear through the financial crisis.
While society collectively bears ultimate responsibility for the failures of the
commercial money creation system, there is no direct influence on the overall
direction od how finance is invested or used.
Far from being a social resource, money is currently being mainly created and
harnessed by the capitalist sysytem. (p.27)