When it comes to understanding the nature of money, times of political tranquility can prove deceptive. The relatively stable order of things gives money the appearance of being natural and neutral—somehow beyond politics. Yet in his new book, The Currency of Politics: The Political Theory of Money From Aristotle to Keynes, Stefan Eich, an assistant professor of government at Georgetown University, shows how economic crises reveal the inherently political nature of money. As an example, Eich points to the 2008 financial crisis, which gave birth to the Troubled Asset Relief Program. Initially, TARP contained a clause that promised the purchase of toxic assets from a number of economic actors, including homeowners. Within days, however, Treasury Secretary Hank Paulson—a former CEO of Goldman Sachs—and Federal Reserve chair Ben Bernanke ditched the clause and pumped billions of dollars into failing banks to bail out the financial sector. The same banks then turned around and foreclosed on mortgages across the United States, particularly in Black and Hispanic neighborhoods, on an unprecedented scale. The decision to create money and to direct it to certain interests, Eich argues, is an inescapably political calculation made by powerful elite actors and groups. In times of crisis or peace, money remains a political tool.1

Given this fact, how can money be made more democratic, especially since it is mainly produced by private banks too often cut off from democratic accountability? As a historian of economic and political thought, Eich looks to the past for answers. The Currency of Politics examines neglected theories of money in the thought of figures like Aristotle, John Locke, Johann Gottlieb Fichte, Karl Marx, and John Maynard Keynes and offers a pathbreaking new intellectual history of monetary policy. In examining how key thinkers approached the economic crises of their respective times, Eich offers a map for navigating the politics of money today.2

—Daniel Steinmetz-Jenkins3

Daniel Steinmetz-Jenkins: A central contention of your book is that money, especially during times of tranquility, appears as a natural and neutral phenomenon, which is to say that it is disconnected from and lies beyond politics. However, what recent crises have shown us is that, to use your words, “the myth of neutral money beyond politics is dead.” Instead, money—not only who gets it but also who can create it—is always based on political decisions. Why does it take a crisis for us to realize this? Why do we struggle to grasp the political nature of money?4

Stefan Eich: Absolutely, this was my guiding puzzle: If money is indeed a political institution, why does that always seem to come as a surprise in a moment of crisis? Why do we evidently struggle to articulate the politics of money?5

One purpose of my book is to spell out some of the ways in which money is not just an economic institution but also a measure of social value, a public good, a tool of governance, and a constitutional project. But this should immediately trigger the follow-up question: Why is this side of money so alien to us? How can we explain the forces of depoliticization that have left us with an impoverished conception of money? This question loomed ever larger for me, and it pushed me to grapple with the political nature of monetary depoliticization.6

Money is, after all, the keystone for any depoliticization of the economy as such. If you manage to convince people that money exists outside of politics, that its value is a given fact of nature to which we have to submit, then you are more than halfway to your goal of shielding economic relations more broadly against the unpredictable forces of democracy.7

But these enormous stakes only seemed to explain part of the puzzle. I wondered more than once whether money is perhaps constitutively a deception, an institutionalized form of illusion. The sociologists Bruce Carruthers and Sarah Babb once put this haunting possibility succinctly in a classic paper, where they wrote that “money works best when its social construction is hidden.” So, from this perspective, money only really works when it can be taken for granted—in order to function, money must deceive.8

I ultimately don’t think that’s the case, but there is a peculiar sense in which appearances are constitutive of money. Money is a metaphor that demands to be taken literally: It does not merely represent reality but constitutes it. This means, for me, that money is ultimately best understood as a fragile project of political language, always suspended between violence and trust. The potential for deception that originates from that observation is, of course, vast. But so are the possibilities of rendering this self-reflexive institution of the public imagination more attuned to our ideals. It is between these possibilities and pitfalls that the democratic politics of money plays out.9

DSJ: Can you explain your notion of “political currency”? 10

SE: I use “political currency” in the book in a metaphorical sense—not to refer to cash or legal tender, but to capture a specific political aspiration of money. It’s an explicitly normative concept designed to articulate and measure something we often lack, namely the role of money as a tool of democratic self-government. Like democracy, political currency is never something that we simply have, but it instead points to a certain aspirational possibility that we can, at best, move toward. It is also for these reasons that I like the metaphorical meaning of “currency” in this context, which reminds us that money is an institution of the collective imagination, of the ideals current within a certain society.11

But if “political currency” adds an explicitly normative dimension to political debates about money and economic democracy, it was at the same time important for me that it is also deeply rooted in the monetary history I lay out. In each crisis, we can see theoretical and practical moves that try to reorient money to ensure that it better serves the citizenry rather than the other way around. Even where these are ultimately disappointed—as they almost inevitably are—they point toward the built-in possibilities of a more democratic money that remain unrealized.12

Money is always already political, but we can harness that political dimension in radically different ways, and that depends not least on whether we appreciate that we are dealing with questions of collective rule, power, and authority. Our first task must thus be to render these forms of monetary power visible; this allows for the formulation of new political questions about who should wield such powers. These are the questions that I hope the concept of “political currency” allows us to formulate with greater precision and confidence.13

DSJ: In what sense is John Locke responsible for the modern depoliticization of money? 14

SE: I should say, first of all, that I am much less interested in tracing the precise pedigree of the modern depoliticization of money than I am interested in better understanding the political logic underlying it. If anything, I have become even more suspicious of origin stories in writing the book, after seeing their powerful role in the history of monetary theory. Origin stories always obscure more than they reveal—often intentionally so, since they are devices of legitimation or delegitimation. I was thus trying to get away from framing Locke simply as the villain of the story.15

Instead, what the focus on Locke reveals is the paradoxical political logic of depoliticization. Rather than merely a process of naturalization, I have come to think of the politics of depoliticization as a peculiar kind of deception. In this sense, it is a magician’s sleight of hand. As such, it is never removed from politics, but merely one possible move on the chessboard of the politics of money. This is why I refer throughout to the politics of monetary depoliticization.16

The case of Locke helped me in teasing out this logic, and there can be no doubt that Lockeanism had a profound influence on the monetary depoliticization of the 18th and 19th centuries. But it is an intriguing question how Locke himself related to this deception. Paradoxically, he is, after all, the one who warns that appearances often deceive and that our language is beset with trap doors and distorting mirrors that invite deception. He portrays himself in this context as a trustworthy guide who merely intends to warn us. But that is a first performative contradiction: If Locke were right, how could we possibly trust his own words?17

In the realm of money, he engages in a similar move when he points to the notion of intrinsic value but then reveals that intrinsic value does not originate in nature, but instead results from an act of fiat by an earlier government that now binds us. As a result, Locke finds himself in the paradoxical position of trying to persuade his contemporaries that money’s value does not depend on what they think. But why try to change an opinion if it were true that opinions don’t matter?18

It seems to me that Locke is perfectly aware of these performative contradictions. I suspect he would just describe himself as akin to an honest magician who deceives us in the interest of protecting us from worse deceptions. In his reception, by contrast, the original political character of Locke’s argument came to be obscured. The ideal of “sound money” moved into a blindspot of liberal politics: clearly central and yet, precisely as a result, very hard to perceive or criticize. The magician’s sleight is simply accepted as reality. Everyone involved—the putative magicians included—forgot that this was an act of magic based on an optical illusion. Powerful are the forces of mystification in the realm of political economy!19

DSJ: In your chapter on Marx, you state that elements of his thought are prone to the same apolitical understanding of money as Locke’s. Why is this?20

SE: There is a curious parallel between the respective receptions of Locke and Marx, albeit with a critical twist: The liberal elision of the politics of money finds a peculiar counterpart in the way in which the left has sometimes been insufficiently attuned to the politics of the monetary system.21

Marx was, of course, the great critic of the Lockean gospel of sound money, and I consider him a complex critic of commodity theories of money rather than a confused exponent of such accounts. He was precisely interested in critically highlighting the role of money as a commodified social relation. As such, he engaged with Locke to demystify the trope of sound money. But Marx simultaneously sought to expose the naivete of socialist proposals for monetary reform—for example, those of Proudhon in France and of Robert Owen in England—who, according to Marx, mistakenly placed too much faith in the transformative effects of monetary reform. Marx similarly ridiculed conservative and liberal reformers in Parliament who thought that superior rules of credit creation would rid capitalism of its crises. Instead, he shifted the conceptual debate from the nature of money to the mysteries of capital.22

Marx himself had a deep knowledge of monetary history and an awareness of money as a site of political struggle. And yet, because of his rejection of the socialist politics of monetary reform and his disdain for the delusions of Peelite monetary legislation, one can easily come away from reading especially volume one of Capital with a somewhat diminished sense of the politics of money. One can see the effects of this in the history of Marxism, which sometimes lacked a sufficient interest in monetary politics and central banking. The result has at times been a peculiar mirror image on the left of the liberal elision of monetary politics.23

Going back to Marx himself, including his unpublished notes on monetary crisis, can help us to appreciate the way in which his conceptual innovations emerged out of a deep familiarity with the debates over monetary reform and the long history of monetary theory—but also how Marx continued to return to thorny questions of credit and finance later in life without ever fully resolving them for himself. Here we get a more curious and less dogmatically confined engagement with the complex politics of credit money under capitalism than that offered by some later Marxists.24

DSJ: If there is a hero in the book, it seems to me that it would be John Maynard Keynes. You show that Keynes recognized the tension between the demand for technical monetary expertise versus democratic politics. In particular, he believed that the former demanded what you describe as “an important degree of political insulation from the democratic noise outside the political machine.” Yet he also believed that economic questions must be answered “in the interests of social justice and social stability.” Can you explain Keynes’s solution to this tension, in particular his idea of “indirect steering”? 25

SE: That is indeed one intriguing tension in Keynes’s thought. But what makes Keynes such an interesting thinker, apart from the breadth of his interests, is that these tensions are always very much at the fore of his own mind. On the question of how the new entity of the economy ought to be managed, we see one instance of such a productive tension. Keynes is adamant that economic policy had to be reoriented not just toward expediency but ultimately also toward demands for social justice, not least because these fed back into stability—a very Rawlsian observation. He was at the same time convinced that economic questions would take on a growing political significance, just as, inversely, the economic repercussions of political questions would become more central. But so far, there is no tension between a commitment to social justice and what we might call a technocratic approach to governance. One can very well aspire to act in the general interest while violating precepts of participatory democratic self-government.26

For Keynes, the problem is more interesting, because he was not simply advocating for a benign form of technocratic rule apart from democracy. Instead, he grappled with how to put both democracy and economic governance on new foundations. He believed in the task of educating the masses on economic questions while simultaneously doubting whether that could ever suffice. Keynes was convinced that democratic opinion can be a powerful check on economic policies that were callous and insensitive to questions of social justice. In this role, he often stirred up public opinion in his newspaper columns and sought to direct it against the prevailing orthodoxy. But Keynes was simultaneously convinced that economic policy would have to be somehow shielded from popular opinion by at least one degree, and he questioned how deep the masses can really penetrate the finer points of economic theory. The great popular demystifier of money and economics was at the same time himself a great magician of public finance. Understanding Keynes requires one to appreciate that he was able to consciously hold on to positions that seemed to many of his friends to be in tension with one another.27

DSJ: You show that this tension in Keynes between democratic politics and economic steering also had an international analog. In the 1940s, Keynes sought to reconcile domestic monetary autonomy and international monetary coordination through a new global reserve currency. Keynes’s proposal was shot down at the Bretton Woods Conference in 1944. To what degree do you believe his alternative vision provides an attractive model of global economic governance today?28

SE: We have a lot to learn from Keynes’s clear-eyed diagnosis and ambitious vision, not least because his actual proposal seems further out of reach than ever. Keynes put his finger on the need for a global reserve currency in an economically integrated world. He insisted that economic and political internationalism requires keeping financial globalization in check. Both insights weigh heavily on us today, precisely because our attempts to evade or ignore them have increasingly run aground.29

The Fed is today not just the central bank of the United States but the de facto central bank of the world. It is at the same time entirely unaccountable to the rest of the world. When it now hikes rates in response to domestic inflationary pressure, it actively pushes the Global South into deep debt distress. We have no capital controls to prevent money from gushing out of emerging markets back to Wall Street. Bretton Woods put the dollar at the heart of the world economy, and we are ailing more than ever under the contradictions that result from having one country’s currency also serve as the global reserve currency.30

The Fed’s commitment to shoring up global dollar liquidity for investors simultaneously skews its domestic commitments away from seriously striving for full employment. When push comes to shove, workers’ wage demands are without hesitation sacrificed on the altar of investor confidence in the dollar.31

To return to Keynes in this light does not mean that his “bancor” [the name of his proposed global currency] is around the corner. What he gives us is a unique combination of a clear-eyed diagnosis of the tensions between political and financial internationalism, and a capacious political imagination of more just and more stable international monetary structures. This combination of diagnostic clarity and daring imagination must fuel our critiques of the current non-system and our attempts to imagine better futures.32

DSJ: Let’s talk a bit more about contemporary politics. You state emphatically that the democratic promises of cryptocurrencies are false. Why is this?33

SE: We have reached a very weird moment in the crypto cycle. Cryptocurrencies, especially Bitcoin, started out based on the promise of a new form of money that no longer required any form of trust. Instead—or so we were told—the future of money would be based on cryptography in a way that placed it beyond trust and that liberated it from politics and, indeed, all human meddling. No more bankers who can create dubious loans! No more central bankers who can add zeros by the stroke of a key! Instead, a deflationary algorithm tied this removal of discretion to a project of artificial scarcity. This was the ultimate fantasy of depoliticized money.34

But in many ways, this challenge to modern money has since imploded, at least for genuine cryptocurrencies like Bitcoin. Based on a fixed supply without any discretion, crypto simply turned out to be far too volatile to effectively serve as a unit of account. With the supply of coins hardwired into the algorithm, swings in demand can fuel huge movements in price. There’s a deep irony here: In some sense, the idea of Bitcoin as future money fell victim to its own success as a speculative asset.35

So today, even many crypto enthusiasts have largely ditched the idea that crypto is the future of money beyond politics. Instead, they pitch cryptocurrencies simply as unique assets—or at least they did so until the big market crash of the spring. There is still an important struggle going on about other forms of digital private money versus digital public money (the so-called “central bank digital currencies,” or CBDCs). Here, it’s important to insist on money as a crucial piece of public infrastructure and to point out that the call for the depoliticization of money has revealed itself to be a naked de-democratization.36

But, simultaneously, something really bizarre has happened ideologically: Crypto as an asset has started to adopt the political language of democracy! Alongside a boom in retail investing, cryptocurrencies came to be offered as speculative assets under the mantle of a “democratization of finance.” Anything that made financial services, including gamified forms of speculation, more widely available was now touted as somehow democratic. Even well-meaning commentators have started to talk as if access to highly speculative investments is a meaningful sense of “democracy.”37

It’s absolutely crucial to push back hard against this impoverished and distorted conception of democracy. We have to ask what meaning of “democracy” is implicitly assumed in such slogans. As far as I can tell, democracy is here radically reduced not even to ownership but to the mere theoretical ability to access a financial product. What is crucially entirely missing is any sense of democracy as equality. Rather than the fundamental, egalitarian democratic idea of “one person, one vote,” in the crypto realm we encounter the radically inegalitarian slogan of “one dollar, one vote.” That’s not a meaning of “democracy” that I find desirable.38

Now what are we to make of this? Part of me is repelled and shocked by such a crass distortion of the founding principle of democratic life, and I worry about the way in which such warped conceptions find their way back into other parts of democratic politics. I also worry about the way in which such slogans blind people and make it harder to see what’s actually going on in the world of decentralized finance. But there is also another way to look at this: Should we maybe count it as an ideological victory that we are now at last talking about democracy?39

DSJ: You observe that today money is “overwhelmingly” produced by private banks, and that the Federal Reserve has become “the world’s de facto central bank.” This system, which has been cut off from democratic accountability for so long, feels unassailable. What do you envision to come? Does anything give you hope for a more democratic future in regard to monetary policy?40

SE: We are indeed in a profound moment of suspended disorientation and uncertainty when it comes to the global monetary system. In the book, I follow Adam Tooze and others who have described this condition, with Gramsci, as a kind of interregnum. We can tell that the ideas and narratives that hold the system together are no longer fit for the purpose, but we lack an alternative system and even the language in which to properly describe our ambitions. The idea of money as somehow neutral and beyond politics has been thoroughly discredited, but we can’t quite articulate—let alone see—what could replace these ideas and the institutions they were meant to legitimate.41

The system does indeed feel unassailable, but all that holds it together is the lack of an alternative. That’s a powerful force for now, but it also points the way to how quickly things could change. What I find interesting about this moment is the way in which its very uncertainty also allows for new questions to be posed, because power is now visible in a way in which it rarely is during calm times.42

The “productive incoherence” of our current monetary moment—as Ilene Grabel has described it, adapting a wonderful phrase by Albert Hirschman—requires us to take stock of the ground on which we stand, of our political commitments and our linguistic resources, in order to begin to articulate what a different system could look like. That task cannot be divorced from a close study of monetary power as it exists, but nor should its imagination be held captive by the powers that be. This must instead be first of all an exercise in enriching our political and democratic imagination in a way that restores trust in our collective agency, including at the global level.43

None of this means, of course, that democratizing money will be easy in any sense. But we have to start somewhere, and my hope is that articulating the political and democratic possibilities—and limitations—inherent in the history of political thought about money can equip us with a better map.44