Ingham and Keynes on the Nature of Money

Mark Hayes

Chapter 2 in Financial Crises and the Nature of Capitalist Money, 2013, pp 31-45 from Palgrave Macmillan

Abstract: Abstract In 1933, Keynes wrote of the need for a monetary theory of production — that is, a theory of production and value in a monetary economy (Keynes, 1933). He argued that the distinction between a barter and a monetary economy, traditionally made by economists, needed to be recast as one between a real-exchange economy (a fictional theoretical construct created by economists) and the monetary economy we actually observe. A real-exchange economy may use money as a means of exchange (the characteristic traditionally attributed to a monetary economy) but the role of money is neutral, a simple go-between in a relation between things, more efficient than barter, which drops out on consolidation when we consider the economy as a whole. Rather Keynes sought a theoretical conception of the observable market economy which recognises, as anything but neutral, the essential role of money in its operation.

Keywords: Interest Rate; Real Wage; European Central Bank; Monetary Economy; Capital Control (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1057/9781137302953_3

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