The Nature of Money

Mainstream economics fails to grasp the specific nature of money. It is seen either as a 'neutral veil' over the operation of the 'real' economy or alternatively as a 'thing'—a special commodity.

In this important new book, The Nature of Money, Geoffrey Ingham draws on neglected traditions in the social sciences to develop a theory of the 'social relation' of money. Money consists in socially and politically constructed 'promises to pay'. This approach is then applied to a range of important historical and analytical questions.

The historical origins of money, the 'cashless' monetary systems of the ancient Near Eastern empires, the pre-capitalist coinage systems of Greece and Rome, and the emergence of capitalist credit-money are all given new interpretations. Capitalism's distinctiveness is to be found in the social structure—comprising complex linkages between firms, banks, and states—by which private debts are routinely 'monetised'.

Monetary disorders—such as inflation, deflation, and the collapse of currencies—are the result of disruptions of, or the inability to sustain, these credit-debt relations.

Finally, this theory of money's 'nature' is used to clarify confusions in the recent debates on the emergence of new 'forms' and 'spaces' of money—global electronic money, local exchange trading schemes, and the euro.