Book contents
- Frontmatter
- Contents
- Introduction
- Dedication
- 1 Why the World Economy Needs a Financial Crash
- Part I The Economics of Financial Inflation
- 2 Money in Globalised Times
- 3 Neo-Liberalism and International Finance
- 4 Financial Innovation: Better Machines for Financial Inflation?
- 5 The Inflation of Goodwill
- 6 Leverage and Balance Sheet Inflation
- 7 Inflation in Financial Markets
- 8 Asset Inflation and Deflation
- Part II The Culture of Financial Inflation
- Part III Financial Crisis
- Epilogue
- Notes
- Index
2 - Money in Globalised Times
from Part I - The Economics of Financial Inflation
Published online by Cambridge University Press: 05 March 2012
- Frontmatter
- Contents
- Introduction
- Dedication
- 1 Why the World Economy Needs a Financial Crash
- Part I The Economics of Financial Inflation
- 2 Money in Globalised Times
- 3 Neo-Liberalism and International Finance
- 4 Financial Innovation: Better Machines for Financial Inflation?
- 5 The Inflation of Goodwill
- 6 Leverage and Balance Sheet Inflation
- 7 Inflation in Financial Markets
- 8 Asset Inflation and Deflation
- Part II The Culture of Financial Inflation
- Part III Financial Crisis
- Epilogue
- Notes
- Index
Summary
‘Gladstone, speaking in a parliamentary debate on Sir Robert Peel's Bank Act of 1844 and 1845, observed that even love has not turned more men into fools than has meditation upon the meaning of money. He spoke of Britons to Britons. The Dutch, on the other hand, who in spite of Petty's doubts possessed a divine sense for money speculation from time immemorial, have never lost their senses in speculation about money.’
K. Marx, A Contribution to the Critique of Political Economy, New York: International Publishers 1970, p.64Modern finance is about ‘convenience money’, that is, having a store of liquid assets that allows firms and households to meet unplanned expenditures, or unexpected declines in income, without the bother of having to sell possessions (labour or inanimate property) or borrow in an emergency. Such convenience money is part of accumulated wealth. As globalisation has linked up local and national markets for wealth, so too it has changed the kind of money that we use.
As every textbook reminds us, to the point of tedium, money is a social convention which makes trade easier because prices are set in amounts of the money-commodity (‘unit of account’), and because the proceeds from selling commodities may be held as money until the desired commodity comes into the market (‘store of value’).
- Type
- Chapter
- Information
- Why the World Economy Needs a Financial Crash and Other Critical Essays on Finance and Financial Economics , pp. 9 - 16Publisher: Anthem PressPrint publication year: 2010