The nature of money Book

Sociological neo-chartalist perspective. Written before the various real world monetary developments which would prove the problems pointed out in here that the Euro and any deterritorialized digital currency would encounter.
The basic elements of the meta-theoretical foundations of modern economics are to be found in Aristotle's ethics. Here, the purpose of economic activity should be the gaining of utility through production and exchange. Money should be no more than a neutral medium for the attainment of this end. The creation of and hoarding of value in the form of money, as an end in itself, was anathema. Aristotle deplored the fact that money could be a means of domination, and argued that it need not be so. For the most part, modern economics did not explicitly endorse the ethical element, but inherited, albeit unwittingly in the case of most modern practitioners, the analytical framework. By the nineteenth century it was widely accepted that money was the 'neutral veil' behind which lay a fundamental substratum of human material existence which consists in the propensities of the factors of production and the utility of commodities. In modern orthodox theory, this elementary core of the economy is modelled in terms of individually rational decisions about the marginal productivity of the factors and the marginal utility of commodities. These are mathematically formalized as supply and demand schedules of representative agents for particular commodities and in general equilibrium models of the economy as a whole. At most, money exists as an arbitrarily chosen commodity that is given a numerical value (numeraire) that enables the formal models to operate. Generations of orthodox economists have insisted that money does not comprise any of the essentials of economic life, and that it does not really matter. The model of the material substratum of human existence is also held to be universally applicable. Time, history and culture are analytically unimportant; they are the 'contextual tosh' from which micro-economic analysis can extract the 'rational core' (Williamson 1994).
Marx almost, but not quite, saw through the intellectual foundations that were eventually distilled into this nonsense. But his even stronger commitment to the Aristotelian conception of the essence of material life led him to make the same mistake with regard to money. Marx properly understood the significance of historical variations in the substratum of material life, in his scheme, the modes of production. He also saw that the factors of production were social categories. A piece of machinery only became capital when it was part of a social relation, that is, owned and controlled by one class and worked by another. Moreover, he saw that use-value (utility) should be distinguished from exchange-value, and that they could diverge quite markedly, especially in capitalism. But, following Aristotle, he held that these two values should be commensurate. 'Utility' should determine 'value', as it was thought to do in the 'natural' exchange economy of independent producers.