BOOK REVIEW: Money: The Unauthorized Biography By Felix Martin
An Ontology of Money
It is practically one of the most important human inventions in the entire course of human history. And yet it is little understood, even by economists themselves, made even more poignant when Felix begins with a quote by A. H. Quiggan (1949)- “Everyone, except an economist, knows what ‘money’ means.” A rather callous jibe, but nonetheless a sort of truism. Felix Martin, former World Bank official and economist elucidates in 260-pages the nitty-gritty of money through the prism of alternative history .
We are always caught in a cycle of debt that we rarely think about what money owes us, the original intent of money was for the purpose of creating an equitable society, a peaceful economy, a well-functioning political system that contributes to the staving off of detrimental financial tsunamis and managing the roller-coaster booms needed. But what we have now is a daemon, the catalyst of wars, the bedrock of poverty, the Damocles Sword that hangs upon the fabric of our existence. Money is indeed a double-edged sword.
Martin, extols the virtues of money to deliver on its original providence and goes to expand in a heavy-going argument on how it is needed to rethink what money is. Of the most profound things he says (Martin, 2016), one stands in bold, that “money is not a thing but a social technology. A set of ideas and practices for organizing society. To be precise money is a concept of universally applicable economic value.” A few years ago, I recall having a rudimentary understanding of this concept where I theorized that money was a psychological state that informed on the ability of the human being to maintain his existential continuity in the form of creating wealth.
In the analytical hodgepodge of the book, several conflicting issues emerge in the expositions of money. First and foremost, the glaring conflict in the definition of money between what Martin enunciates it is and the standard definitions and the domain of discourse as to where the taxonomy of money begins and terminates. He notes “Coins and Currency… are useful tokens to record the underlying system of credit accounts and to implement the underlying process of clearing.”
Eric Lonergan (Lonergan, Routledge, and is, 2013) in his review of Martin’s thoughts endeavors to point out the logical fallacy that assumes “because debts have often been used as money, it does not follow that money is a debt.” Eric continues to contest Martin’s thoughts by stating that Martin doesn’t necessarily escape this fallacy, but rather finds a “novel” version where he argues that because we utilize credit accounts and a clearing system to net off payments, this makes the net and clearing system fall in the category of money. “This is a logical error,” Eric declares.
Secondly, the notion of “narrow” banking is a panacea based on the speculations of Felix. However, it appears that he avoids the issue of it not being able to be applied. Milton Friedman advocated a variant of this notion in the 50s. It is essentially a concept where if a bank is to take deposits, it must have equal amounts in reserve. But alas! The nature of man would not allow for this, and of course there is the idea of a Machiavellian game a foot. This concept arises several times over the ages, especially during financial crises. That’s why Bitcoin and the Blockchain as innovations provide reasonable solutions into managing the dynamics of money.
Martin’s ideas draw from David Hume’s philosophies who was first to elucidate the concept of money as a social institution, however Martin does not acknowledge him.
Granted, it is a scintillating read into histories of money and does make one think a bit closely into one’s interactions with money, both in the traditional sense and with regard to the emerging aspects of it like crypto-currency. The common feature of the modern democracy is that money is becoming vastly a dangerous concept, leading to flagrant divisions in society, imperialistic oligarchies, though with the dynamic technologies, the main motivation is to democratize money and attempt to battle the machinations of a truly Machiavellian world.
Quiggin, A.H. (1949) A survey of primitive money: The beginning of currency. Available at: https://books.google.co.ke/books?id=h90OAAAAQAAJ&dq=inauthor:%22Alison+Hingston+Quiggin%22&hl=en&sa=X&ved=0ahUKEwjxoNaBoNrRAhUHXhQKHeDZAlcQ6AEIGzAA (Accessed: 24 January 2017).
Lonergan, E., Routledge and is, H. (2013) Review of Felix Martin’s money: The unauthorised biography. Available at: http://www.philosophyofmoney.net/review-of-felix-martins-money-the-unauthorised-biography/ (Accessed: 24 January 2017).
Martin, F. (2013) Money: The unauthorised biography. London: The Bodley Head.