The Adventures of Money

A new article on contemporary monetary questions based on two recent books on the nature and the history of money.




5. AUGUST 2022



Observing the rise of cryptocurrencies and the discussions around central bank digital currency (CBCD), the future of money seems more uncertain than ever before. We cannot know how the future is going to look like. However, looking back in the past we might learn a lesson from the history of money. In his article, Jonathan Levy refers to two books on the nature of money to answer some contemporary monetary questions.

What is money? Whereas neoclassical economics stretches the neutrality of money (only used for exchange of real goods), other schools of thought regard it as governance tool or as a form of credit in social relations. In his book “A Global History of Money”, Akinobu Kuroda underlines the heterogenous nature of money being historically and geographically contingent. Money can arise through a top-down and state-centered mechanism, as well as through a more spontaneous bottom-up mechanism as means of exchange.

Breaking with many neoclassical economists, however, Kuroda holds that money does not simply follow from the cumbersomeness of barter exchange. Rather, history shows that the causal arrow often runs in the opposite direction: fresh supplies of money generate new marketplaces and new divisions of labor, increasing wealth.
Jonathan Levy

Kuroda shows that before the 19th century money was often more than just a national currency. It was common that there existed “multiple monies” for different purposes – one for paying taxes, one for exchange, and yet another one for investments. It could be that we once again move towards a heterogeneous money world again.

With a focus on the role of money in political philosophy, Stefan Eich takes a complementary perspective in his book “The Currency of Politics”. It deals with the question, how (de-)politicised money should be in our democracies? Eich’s answer in short: money is always political and fragile.

What follows from these two perspectives for contemporary monetary questions? In Jonathan Levy’s view, two lessons can be learned. First, the dynamic factor in the history of money is demand. Second, excessive worrying about the dollar’s future with regard to China looks misplaced given the history of monetary heterogeneity. The real concern should be how to design a global monetary world of multiple and complimentary currencies that will work to the benefit of everyone.



For decades, there was a consensus that reducing the role of the state and cutting public debt would generate wealth. This contributed to a chronic underinvestment in education and public infrastructure. New research focuses on establishing when and how governments need to intervene to better contribute to long-term prosperity and to stabilize rather than aggravate economic fluctuations.