Money as a Democratic Medium

(Note: Registration is now closed.)

December 14-15, 2018

Harvard Law School

Sponsored by: Harvard Program on the Study of Capitalism, Institute for Global Law and Policy, The Murphy Institute - Tulane University, the Harvard Law Forum, and Harvard Law School


“Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people.” The words, attributed to a 20th century British banker, capture an emerging consensus. Money, governance, and public welfare are intimately connected in the modern world. More particularly, the way political communities make money and allocate credit is an essential element of governance. It critically shapes economic processes – channeling liquidity, fueling productivity, and influencing distribution. At the same time, those decisions about money and credit define key political structures, locating in particular hands the authority to mobilize resources, determining access to funds, and delegating power and privileges to private actors and organizations.

Recognizing money and credit as public projects exposes issues of democratic purpose and possibility. In a novel focus, this conference makes those issues central. Scholars, policy makers, and students have often assumed that money and credit emerge from private exchange and entrepreneurial activity. Recent work, by contrast, emphasizes that modern currencies depend on collective orchestration. That approach resets the frame.

First, examining money as a public project opens monetary institutions to our view. Comparative and historical work suggests that societies have experimented constantly with different monetary structures and methods of allocating credit. Everyday experience reiterates that lesson. The Financial Crisis, the European Monetary Union, recurring sovereign debt crises among emerging countries – all have catalyzed intense debates over institutional reform. Expanding our vision enables us to identify and explore more effectively the complex engineering that produces modern money and credit. Given the broader view, we can better evaluate the way our monetary orders have changed and the capacities at stake when they do. We can see causal connections previously obscured, including the relationships between governmental structures and market processes. Likewise, we can ask new questions about the way disciplinary premises, such as the private genesis of money and credit or the classical dichotomy between real and nominal value, have shaped substantive inquiry. Looking forward, we can consider institutional alternatives, the political and normative premises that shape them, and their impact on shaping the modern political economy.

Second, the new approach directs attention to a different register of claims and responsibilities. If money is a public resource, if public obligation and enforcement anchor demand for the medium, if the government in essential ways supports the payments system – then we face profound legal and political obligations to evaluate the design of the monetary and financial system and the dynamics it produces, including how money circulates, whether participants in a monetary community have equal access to the medium, and how the current structures engender growth, mobility and opportunity, or dearth and exclusion. Today’s challenge is to revise the monetary architecture we have inherited so that it operates to reinforce democratic aspirations rather than undermine them.

The goal of the conference is to bring individuals working in different areas with diverse methods into a common conversation. Their projects are likely to inform each other and may suggest unanticipated synergies at the academic and policy-making level. For example, one trend in recent work reinterprets the monetary system as a public utility. That insight throws the regulatory regime crafted for banks and analogous institutions into a new light, suggesting that we have miscategorized those entities. Another strand in scholarship and policy-making focuses on the long-standing failure by commercial banks to reach low-income individuals. That work explores the motives that drive bankers’ decisions and considers efforts to re-align those incentives. The projects on infrastructure and “banking the unbanked” each revise scholarly approaches to banks as intermediaries and innovate ways to expand access to credit.

Similar potential synergies abound elsewhere. Thus scholars from a variety of methodological angles are exploring the way societies anchor money’s value. Their work considers the critical role played by public demand, including the determination by political authorities to take a particular unit in payment for taxes and other communal obligations. That theoretic claim informs full employment/job guarantee programs, proposals for “complementary currencies” that could circulate as a more flexible local money within monetary unions, and models of sustainable credit that advocate loans tailored to increasing taxpaying capacity. As the scholarship in these areas proliferates, its authors should vet their approaches to public demand against each other, looking for the differences and shared aspects that could stimulate new insights and stronger work.

The Conference is organized to invite sustained exchange among participants over the course of the two-day conference. It is open to all students of money, the monetary system, and the modern economy, including the public. Please register (no charge) at the following link: Registration is closed. Scheduled sessions are listed on the Schedule page.