API Blog

In a recent article on “How to Pay for the Green New Deal”, professors Yeva Nersisyan and Randall Wray mimic Keynes’ 1940 “How to Pay for the War” in order to explain how the State theory of money, nowadays known as “Modern Monetary Theory,” or MMT, would pay for the interventionist proposals advanced under the pretense of environmental concerns that have come to be called the “Green New Deal” (GND).

Calls for the Federal Reserve (Fed) to consider a Central Bank Digital Currency (CBDC) gained steam after the release last year of a white paper by Facebook and associates proposing to create a stablecoin called Libra. The Fed has obliged, having now partnered with MIT to research technological and policy implications of a CBDC. But, create a CBDC with what purpose?  

I closed my last post to the API blog by suggesting that an historical study of the social ontology of money should pay attention to the contexts in which theoreticians of money write. Think about the present day. It should be no surprise in the wake of the Financial Crisis of 2008, with the rise of cryptocurrencies, and in the midst of increasing wealth disparity that we see theoreticians wondering anew about the nature of money.

This is a brief passage from Jorge Luis Borges’s short story Zahir, which appeared

appeared in his collection Labyrinths:

… I turned back. The dark window told me from a distance that the shop was now

closed. In Belgrano Street I took a cab. Sleepless, obsessed, almost happy, I reflected

Ten Philosophical Mistakes: Basic Errors in Modern Thought – How They Came About, Their Consequences, and How to Avoid Them is the title of a book published 35 years ago by Mortimer J. Adler. Adler (1902–2001) was a well-known philosopher, educator, and popular author.

In my previous post to the API blog, I closed by raising some questions about the relevance of history to the study of money’s ontology. I drew a comparison with chess. If you want to understand what chess is and how to play it, you study its constitutive rules. Its history might be interesting, but it doesn’t seem like you need to know anything about this history to understand the ontology of the game. The same line of thinking would seem to apply to pieces of mechanical technology, such as an automobile engine.

It has been quite an adventure so far. A classic middle class background with an undergraduate degree at Harvard and a PhD at MIT. The PhD was not required for what I wanted to do but it made my parents happy. I could also teach in the Boston area. I am 43 years old, married with two children, and an almost billionaire in Silicon Valley. Now is the time to make some serious money.

Introduction

I imagine that in the end, most of us hope to see ourselves at 95, looking back with delight and saying: “I lived a good life!”. I don’t imagine that, at that particular moment, we’ll be pondering on that exam we failed at 15, or on that tropical vacation we took at 25, or on that trendy outfit we wore at 35.

As is true of any other social kind, money can be studied in a variety of ways, for a variety of reasons, towards one or several of a variety of ends. A businessperson who wants to know how to make money might study the way it is produced in markets to enrich themselves. They might not think much about what, at its core, money is, even though it rules everything around them. Many academic economists, similarly ruled by money, likewise take next to no interest in its ontology even though they talk constantly about it.