A coda to the coda - Mike Beggs’ piece on Graeber’s Debt in Jacobin, and the ensuing discussion in comments here at CT, has given rise to a further exchange in which J.W. Mason defends Graeber on money, and Mike Beggs restates and extends his position.
Mike sees Debt as “a move in an interdisciplinary struggle: anthropology against economics.” But most of the key arguments of Debt are better seen as part of an intradisciplinary struggle within economics. Admittedly it takes some unpacking, but Debt‘s key themes are in close harmony with the main themes of heterodox economics work going back to Keynes; while the “economics” that Beggs opposes to him represents only the discipline’s more conservative wings. … Debt‘s demonstration that money obligations are historically prior exchange of goods maps onto the insistence of Marx, Keynes and their successors that under capitalism, money values are logically prior to the production and consumption of real goods and services. … Debt‘s distinction between money and credit systems is not just an exercise in classification, but corresponds to a distinction that has has preoccupied many classical and modern economists, and has important implications for monetary policy in addition to the vaster cultural and political-economic ramifications Debt focuses on. … when Mike says that Debt exaggerates the importance of the system of payments, it is because he is coming from a narrowly orthodox view of what monetary economics is about, and why money matters. If your economic vision is shaped by more heterodox traditions — or by the responses to the financial crises of the past few years — the economics of Debt will seem more congenial.
The debate between Josh and I centers on the question of whether or not the distinction between a ‘commodity/fiat money economy’ and a ‘credit money economy’ is a useful one in understanding our present economic system and its history. He thinks it is so useful as to be the central dividing line in economics; I think it is liable to mislead. The rest of the disagreement comes, I think, because Josh conflates the commodity/fiat-credit money economy divide with other divides in economic thinking. So he seems to that if I challenge that distinction, I must be a quantity theorist, must believe that money is simply a veil, neutral in its economic effects, and must misunderstand how banking works. In fact we are on the same side in all those other dichotomies, but Josh for some reason continues to maintain that if I disagree over the core distinction, I must be standing on the other side of all the others. … I think the ‘commodity/fiat money economy’ – ‘credit money economy’ divide is a problem; and … that the rest of his criticisms rest on the conflations with other theoretical dichotomies.