Still more on money: A response to Brandt

Abstract

I thank Per Aage Brandt (2017) for his commentary, which elaborates on the gift origins of money that was only elliptically alluded to in my own piece. I agree with Brandt’s genealogical argument that giving underlies the social categories of debtor and creditor. This indeed was the point of Graeber’s analysis of credit money, from which my own analysis draws heavily. Brandt’s discussion of the role of priests and the priestly class in the establishment of wealth and credit is well established. In fact, my own claims of the money-as-credit origins of what becomes sovereign (state) money systems is fairly well attested among historians of money, whether conscious of Mauss’s important discussion of gifts or not. Brandt is also correct in emphasizing the role of metallic adornments in the history of money. I caution, however, that it is easy to slip seamlessly from acknowledging the material necessity of monetary “inscriptions” to mistaking the expressive sign of money for its content — a mistake made repeatedly throughout history, with disastrous consequences (such as John Locke’s arguments in the late seventeenth century that send England into a financial tailspin) that persist to this day. This is in part due to the fact that money as a store-of-value has to have some form of materialization, but it is and has always been the case, even as far back as Mesopotamia, that the store-of-value resides in whatever records of debts and credits are being maintained and, importantly, WHO has the authority to create and edit the record. As Brandt points out, the priestly classes historically have been “chartered” with the rights to create and edit the ledger, using precious metals as the preferred medium (for physical and religious reasons). It is not a coincidence, then, that precious metals are a perduring material of the pecuniary interest, but it is also important to emphasize that the evidence for “banking” in the form of cuneiform ledgers appears long before evidence of its metallic avatars (see Werner 2005). I mention this in part to emphasize that a fiat-basis for money is not a consequence of metallic adornments, but rather metallic adornments as coined money are consequences of the fiat-based “banking” operations. Brandt’s account and his response, however, focuses on banking as a “mediational” activity, which dilutes his initial point of priest being the first bankers — banks, both historically and especially now, are institutions that either arrogate or are granted the power to create credit-money — their roles as “mediators” are socially salient constructions, which do not, in fact, capture their real operations. Banking as a function of goldsmithery in medieval England and the high prevalence of bankers from European Jewry (a profession for which they were legally consigned to in some instances) adds to the legend of the mediators as outsiders. But goldsmiths did not lend from their deposits in gold, rather they created “fictional deposits” in the form of promissory notes, a practice that became fully sanctioned in England by the Remedies Act of 1704, at least 400 years after the practices of bank-credit creation appeared on the Thames. The above throat clearing is simply to emphasize that Brandt and I largely agree on the general origins of money. Brandt emphasizes the store-of-value dimension over the unit-of-account dimension; I emphasize the unit-of-account dimension as equally elemental and antecedent to coined money. There are a few points that I wish to register substantive disagreement. I do not doubt that commercial acts and acts of giving can be easily represented by distinct networks, but the commercial network sketched by Brandt does not speak to the issue of money-as-store-of-value (aka, credit) and remains irrelevant to the problem of sovereign money. It merely deepens Fauconnier & Turner’s own account. I, therefore, demur to the claim that “Oakley mistakenly explains how to make more money instead of discussing what money is in the first place” (Brandt 2017: 207). If I wasn’t clear in the article, let me reiterate: money is a storeof-valueand a unit-of-account. My explication of the store-of-value dimension has obvious and general overlaps with Brandt’s view of money as “protection.” Bearers of money have credit and hold a desire to “hoard” that credit (i.e. save). It is the unit-of-account dimension that I seek to focus on with respect to sovereign or state money and the institutional properties that develop therefrom, some of which go back to the beginnings of money-systems in Mesopotamia, others of which developed over the last 500 years with the formalized institution of double-entry bookkeeping, and still some others that have just arrived on the scene. Brandt’s account offers nothing by way of this critical dimension, but it seems that the unit-of-account dimension is precisely what Brandt regards as the basis for “the madness of money” for which he seeks deliverance. If something is inherently “mad,” then