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After Krugman's stinging critique of Ferguson as an faux intellectual, I was thinking I wouldn't read the book, but I might now anyway.

Based on the reviews I've seen, however, I think he might still be grasping at the proxy for the real problem rather than the problem itself. Money has always been difficult to define because it is, by its nature, an abstraction and not a thing.  

However, we can get a better idea of money by looking at what is a proxy for rather than by analyzing the attributes of money (credit is one of the three attributes that most intro Money and Banking textbooks describe), which is where most of economic and related literature gets mired.

What matters regarding money is wealth.  Does money have any conceptual basis outside of thinking about wealth?  

Wealth has both inherent and social characteristics. Inherent in wealth are the individual capabilities of life supporting functions -- nutrition, shelter, development, etc. related to an individual being.  However, also inherent in wealth are others' claims upon resources that provide such capabilities and definitions of what constitutes nutrition, shelter, development, etc,. in a social context.

Money, then, is still more general than credit, which defines only one of its social functions of establishing claims on physical resources and defining social capabilities. Money's real purpose is to be a proxy for individual wealth and therefore how money is manifest in a society must change depending upon what wealth means in a society.  We can know more about the causes and solutions to crises like the present by examining what wealth means in our society and how the relationships of power between people determine who has wealth and who doesn't instead of by getting caught up in what are really unessential details of a a constantly changing proxy for wealth.

by santiago on Tue Sep 1st, 2009 at 06:44:35 PM EST

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