What is Money?

Money seems like a straightforward aspect of our daily lives. But underlying its everyday functionality in facilitating transactions, measuring the market value of goods and services, and serving as a store of wealth over time is a stubborn question about what money actually is. As the economist Perry Mehrling observes, “Money is always difficult, and it is more difficult than ever today.” We often conceive of money as a “neutral” medium backed by some valuable asset like gold or as rolling out of government mints backed by the full faith and credit of the state. We sometimes consider credit and money as fundamentally social constructs based on trust. What is often difficult to grasp is that money is created ex nihilo by private banks through the recording of loans and corresponding deposits. Further, when money is created outside of the banking sector, as with mortgage-dealing “shadow banks,” it can play a role, as we saw in 2008, in destabilizing, almost fatally, the entire financial system. What’s at stake in understanding money?

In this course, we’ll sketch the functioning of our financial system and explore the issues and debates surrounding money. Reading from Ann Pettifor’s The Production of Money, Michel Aglietta’s Money: 5,000 Years of Debt and Power, William Goetzmann’s Money Changes Everything, and others, we’ll examine the historical development of money as an institutional system; its close connection to political power; how money is created; the role of interest rates and monetary policy; and the impact of quantitative easing on asset prices and economic inequality. More broadly, we’ll consider how the monetary system can best be aligned with the interests of society at large, and how to subordinate finance to the needs of the real economy.

Please Note: There *is* no physical Brooklyn Institute. We hold our classes all over (thus far) Brooklyn and Manhattan, in alternative spaces ranging from the back rooms of bars to bookstores to spaces in cultural centers, including the Center for Jewish History, the Goethe-Institut, and the Barnard Center for Research on Women. We can (and do) turn any space into a classroom. You will be notified of the exact location when you register for a class.

Instructors will contact students approximately one week prior to the first class with reading assignments and details about the course location.