What the Rule-Book Cannot See: Codified Doctrine, the Epistemic Immune System, and the Distribution of Supervisory Attention

Allan Pedersen

No 1, Philosophers Mint Working Papers from Philosophers Mint

Abstract: The endogenous-money debate is settled operationally: central banks set the price of reserves and accommodate the quantity, as the post-Keynesian literature argued and the Bank of England's 2014 account states publicly. Yet the codified rule-book (Basel risk-weights, the legal definition of money, stress-test taxonomies, the mandate) was written on opposite, veil-view assumptions and not rewritten. What does that lag do to supervision? Codified categories, the paper argues, shape the surveillance regime: a category-system makes some risks countable and others unrepresentable, so codified doctrine works as an epistemic immune system, specialised against the prior crisis and blind to risks of a different kind. Doctrine does not decide which settlement is codified (material interests and path dependence do that); the contribution is downstream, in the sociology of ignorance. It separates doctrinal blindness, where a risk has no category, from motivated blindness, where a recognised risk goes unwatched because a coalition benefits, distinguished in the record by a missing versus a suppressed category. The dependent variable, the distribution of supervisory attention, has four observable proxies. The mechanism is shown in three historical episodes and a set of contemporary gaps; a discriminating archival case (Competition and Credit Control 1971 and the Secondary Banking Crisis) is specified for a companion paper.

Keywords: endogenous money; monetary doctrine; financial supervision; sociology of ignorance; classification; macroprudential policy; central banking; path dependence (search for similar items in EconPapers)
JEL-codes: B22 B31 E42 E58 G28 N20 (search for similar items in EconPapers)
Date: 2026-06
Note: Also available as MPRA Paper No. 129388 and SSRN 10.2139/ssrn.6873579.
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DOI: 10.2139/ssrn.6873579

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