Critique of Liquidity: Property and Persona are the Philosopher’s Stones in the Alchemy of Liquidity

Jongchul Kim

Journal of Economic Issues, 2025, vol. 59, issue 1, 185-206

Abstract: What metaphoric images does the metaphoric concept of liquidity deliver? Scholars have unanimously argued that it is a hydraulic metaphor invented by the rational motive of economists who want to define an economic phenomenon objectively. Opposing this conventional view, this article argues that liquidity is a chemical or alchemical metaphor invented by the irrational alchemic motive of financiers with the intention to create money. It further argues that property rights or personae are the philosopher’s stones by which modern banking—including commercial banking, money market funds, repurchase agreements, and quantitative easing—transmutes credit into money. This argument contributes to the formation of a new critique of liquidity.

Date: 2025
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DOI: 10.1080/00213624.2025.2455642

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