1. Money is more helpfully seen as a social construct rather than a commodity, as it requires backing from an authority through political or social means. 2. Historically, money systems have been imposed on subsistence communities and forced them into wage labor as economies became monetized and lands were enclosed. 3. How money is issued and circulated has significant social and political implications that go beyond just reflecting value in the "real economy."

1. Econom cs As I f
i
Peopl e Real l y
M t er ed
at
Week Two – What i s
Money?
Gal way One W l d Cent r e
or
Amnest y Cent r e, Gal way.
26 Febr uar y 2013

8. 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.

9. MARY MELLOR. THE FUTURE OF MONEY. London: Pluto Books, 2010
Chapter one: WHAT IS MONEY?
1.What is money?
2.Money as a social phenomenon
3.The state and money
4.Money, society and the ‘real economy’
5.Money from credit to debit
6.Bank credit and fresh air money
7.Bank credit and capitalism
8.conclusion

10. Money:
•Measure of value (- unit of account
•Medium of exchange
•Way of making deferred payments
•Store of value

11. Money:
•Measure of value (- unit of account
•Medium of exchange
•Way of making deferred payments
•Store of value
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-
David Graeber. Debt: The First 5,000 Years. Brooklyn: Melville
House, 2011

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.
Money does not in itself embody a value, it measures relative values. (p,10)

18. Money is more helpfully seen not as a ‘thing’ but as a social form.

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

20. 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.

21. 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.

22. 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)

27. Money can only exist within a ‘monetary space’, that is, one
Where whatever is used as the ‘money of account’ in
Ingham’s terms, is backed by an authority or code of
Honour of some form.

28. Money can only exist within a ‘monetary space’, that is, one
Where whatever is used as the ‘money of account’ in
Ingham’s terms, is backed by an authority or code of
Honour of some form.
Money that achieves value through authority is described
As fiat money.
Fiat money is issued by authorities who have the political
Or social capacity to make demands upon others, as when
Monarchs issued coins.

29. Money can only exist within a ‘monetary space’, that is, one
Where whatever is used as the ‘money of account’ in
Ingham’s terms, is backed by an authority or code of
Honour of some form.
Money that achieves value through authority is described
As fiat money.
Fiat money is issued by authorities who have the political
Or social capacity to make demands upon others, as when
Monarchs issued coins.
However, the power to issue fiat coins or notes is not
Unlimited, as their future value still has to be trusted by
The population.

30. Money can only exist within a ‘monetary space’, that is, one
Where whatever is used as the ‘money of account’ in
Ingham’s terms, is backed by an authority or code of
Honour of some form.
Money that achieves value through authority is described
As fiat money.
Fiat money is issued by authorities who have the political
Or social capacity to make demands upon others, as when
Monarchs issued coins.
However, the power to issue fiat coins or notes is not
Unlimited, as their future value still has to be trusted by
The population.
The demands on goods and services made by the issuer
Cannot be more than the productive capacity of the
Population can stand.

31. Money can only exist within a ‘monetary space’, that is, one
Where whatever is used as the ‘money of account’ in
Ingham’s terms, is backed by an authority or code of
Honour of some form.
Money that achieves value through authority is described
As fiat money.
Fiat money is issued by authorities who have the political
Or social capacity to make demands upon others, as when
Monarchs issued coins.
However, the power to issue fiat coins or notes is not
Unlimited, as their future value still has to be trusted by
The population.
The demands on goods and services made by the issuer
Cannot be more than the productive capacity of the
Population can stand.
The money system therefore rests on a combination of
Authority, social trust and economic capacity – public or
Private. (p.16)

33. III. The state and money
State theory of money – the link between the issue and
Circulation of token money and state taxation.

34. III. The state and money
State theory of money – the link between the issue and
Circulation of token money and state taxation.#
The state… demands taxes which have to be paid in the
Money it has already issued and spent. The money is then
Returned via taxes to be issued again and again. The
Authority of the state rests ultimately on its ability to
Tax back, and therefore re-circulate, its money. (p.17)

37. 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.

38. 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.

39. 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)

40. IV. Money, society and the ‘real economy

41. 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.

42. 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.

43. 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)

44. - RATHER THAN EXTRACTING PRODUCE OR LABOUR, THEY BEGAN TO DEMANDS MONEY FROM THEIR
PEASANT POPULATIONS.

45. - 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.
- WHILE 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)

46. 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)

47. 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.

48. 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.
It is not a neutral ‘economic’ choice to give something a monetary value, it is in essence a social and political choice that
dominant groups and classes have imposed. (p.23)

50. With the dominance of bank-created ‘debt’ money
the seigniorage benefit of money to the state
disappears. States are therefore forced into higher
taxation or more borrowing from the private
financial system.

51. With the dominance of bank-created ‘debt’ money
the seigniorage benefit of money to the state
disappears. States are therefore forced into higher
taxation or more borrowing from the private
financial system.
However seigniorage has not entirely
disappeared, it has changed location.

52. With the dominance of bank-created ‘debt’ money
the seigniorage benefit of money to the state
disappears. States are therefore forced into higher
taxation or more borrowing from the private
financial system.
However seigniorage has not entirely
disappeared, it has changed location.
Banks can benefit financially as they create new
money and lend it. Also, those who can make
more money investing or speculating than it costs
to borrow money are also exercising seignorage.

53. With the dominance of bank-created ‘debt’ money
the seigniorage benefit of money to the state
disappears. States are therefore forced into higher
taxation or more borrowing from the private
financial system.
However seigniorage has not entirely
disappeared, it has changed location.
Banks can benefit financially as they create new
money and lend it. Also, those who can make
more money investing or speculating than it costs
to borrow money are also exercising seigniorage.
The shift to the issue of money through the
privately owned banking system has also removed
from the public sector any direct control over the
direction of money use

54. With the dominance of bank-created ‘debt’ money
the seigniorage benefit of money to the state
disappears. States are therefore forced into higher
taxation or more borrowing from the private
financial system.
However seigniorage has not entirely
disappeared, it has changed location.
Banks can benefit financially as they create new
money and lend it. Also, those who can make
more money investing or speculating than it costs
to borrow money are also exercising seigniorage.
The shift to the issue of money through the
privately owned banking system has also removed
from the public sector any direct control over the
direction of money use
This means that those who take on debt are making vital choices about the direction of the economy and, as the financial crisis reveals, those choices can
rebound on society as a whole. (pp.25-6)

59. 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.

60. 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.

61. 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.

62. 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)

64. VII. Bank credit and capitalism
Ingham: ‘the essence of capitalism lies in the elastic creation of money by means of readily transferable debt.’

65. VII. Bank credit and capitalism
Ingham: ‘the essence of capitalism lies in the elastic creation of money by means of readily transferable debt.’
Far from money prior market activities as the barter theorists claimed, it is the prior issuing of bank credit that is essential to bringing profit-seeking
activities into being.

66. VII. Bank credit and capitalism
Ingham: ‘the essence of capitalism lies in the elastic creation of money by means of readily transferable debt.’
Far from money prior market activities as the barter theorists claimed, it is the prior issuing of bank credit that is essential to bringing profit-seeking
activities into being.
Ingham: ‘money is socially constructed as a reality in the process of conflict and struggle’

67. VII. Bank credit and capitalism
Ingham: ‘the essence of capitalism lies in the elastic creation of money by means of readily transferable debt.’
Far from money prior market activities as the barter theorists claimed, it is the prior issuing of bank credit that is essential to bringing profit-seeking
activities into being.
Ingham: ‘money is socially constructed as a reality in the process of conflict and struggle’
This conflict is between those capitalists who hold money and lend it and those productive capitalists who need that finance. The state is also party to
that struggle.

68. VII. Bank credit and capitalism
Ingham: ‘the essence of capitalism lies in the elastic creation of money by means of readily transferable debt.’
Far from money prior market activities as the barter theorists claimed, it is the prior issuing of bank credit that is essential to bringing profit-seeking
activities into being.
Ingham: ‘money is socially constructed as a reality in the process of conflict and struggle’
This conflict is between those capitalists who hold money and lend it and those productive capitalists who need that finance. The state is also party to
that struggle.
The elastic creation of credit-money is based on a ‘hierarchy of debtors’ which is topped by the state’s total liability for the system in its ‘high-powered
money’. Without this structure of finance, capitalism cannot operate. In a crisis the state must step in. (p.28)