A summary and review of Veronique Dutraive and Bruno Theret's article in the Journal of Economic Issues (March 2017) entitled, "Two Models of the Relationship between Money and Sovereignty: An Interpretation based on John R. Commons Institutionalism".
This article was very enlightening and expanded the way of thinking about Commons using his ideas of sovereignty and money, which the authors point out he did not directly discuss himself or at least connect these ideas directly. They take his notions of sovereignty from his articles in the early twentieth century and his ideas on money from his book Institutional Economics. The authors rightly point out that Commons is less well known for his work on money. The result of this analysis is an very useful framework for thinking about money in the Commons framework and how his ideas relate to modern money theory through folks like Randall Wray.
Commons developed several ideas related to sovereignty. His concept of political sovereignty was based on the state's use of physical force and in fact its monopoly over the legitimate use of force to back up decisions and actions. On the other hand, economic sovereignty was based on property and ownership and the ability to withhold from others what they needed or wanted. The two concepts of sovereignty were linked in that political sovereignty would help enforce economic sovereignty. Of course, Commons then used the term "artificial selection" to emphasize that economic sovereignty was changing and evolving but based on human decisions not just simply via some "natural" mechanism. In the case of the United States, Commons argued that the courts (and judicial sovereignty) served to legitimate certain types of property ownership over time when economic conflict occurred and in fact expanded the definition of property from tangible to incorporeal and intangible via judicial decisions. Commons focused squarely on how the law was used to enforce certain property rights over others.
Money and Commons is the focus of the second part of the article. In this case, Commons, similar to many in the modern money theory movement, thinks of money as a social institution that is used to release people from debts incurred of various kinds and plays a non-neutral role in the economy. the article spends some time on Commons usage of ideas from Hawtrey and others that they are pay communities and that different types of "money" will satisfy different types of debts owed.
The authors end their piece with conceptions about two ways to think about money and sovereignty. In the first form, private banks and other financial actors hold power over monetary sovereignty and their interests prevail. The authors point to examples such as the bailout of banks in 2008 and European austerity policies in 20102 as points where monetary sovereignty prevailed. the other form is where public purpose prevails over private and money serves a broader function in society. This is similar to what Commons argued was reasonable value where all social interests had a say in an outcome.
This article was a very useful overview and integration of Commons ideas around sovereignty and money. More of this type of article is needed to examine and expand our ideas and conceptions of what can be done in line with Commons scholarship.
This article was very enlightening and expanded the way of thinking about Commons using his ideas of sovereignty and money, which the authors point out he did not directly discuss himself or at least connect these ideas directly. They take his notions of sovereignty from his articles in the early twentieth century and his ideas on money from his book Institutional Economics. The authors rightly point out that Commons is less well known for his work on money. The result of this analysis is an very useful framework for thinking about money in the Commons framework and how his ideas relate to modern money theory through folks like Randall Wray.
Commons developed several ideas related to sovereignty. His concept of political sovereignty was based on the state's use of physical force and in fact its monopoly over the legitimate use of force to back up decisions and actions. On the other hand, economic sovereignty was based on property and ownership and the ability to withhold from others what they needed or wanted. The two concepts of sovereignty were linked in that political sovereignty would help enforce economic sovereignty. Of course, Commons then used the term "artificial selection" to emphasize that economic sovereignty was changing and evolving but based on human decisions not just simply via some "natural" mechanism. In the case of the United States, Commons argued that the courts (and judicial sovereignty) served to legitimate certain types of property ownership over time when economic conflict occurred and in fact expanded the definition of property from tangible to incorporeal and intangible via judicial decisions. Commons focused squarely on how the law was used to enforce certain property rights over others.
Money and Commons is the focus of the second part of the article. In this case, Commons, similar to many in the modern money theory movement, thinks of money as a social institution that is used to release people from debts incurred of various kinds and plays a non-neutral role in the economy. the article spends some time on Commons usage of ideas from Hawtrey and others that they are pay communities and that different types of "money" will satisfy different types of debts owed.
The authors end their piece with conceptions about two ways to think about money and sovereignty. In the first form, private banks and other financial actors hold power over monetary sovereignty and their interests prevail. The authors point to examples such as the bailout of banks in 2008 and European austerity policies in 20102 as points where monetary sovereignty prevailed. the other form is where public purpose prevails over private and money serves a broader function in society. This is similar to what Commons argued was reasonable value where all social interests had a say in an outcome.
This article was a very useful overview and integration of Commons ideas around sovereignty and money. More of this type of article is needed to examine and expand our ideas and conceptions of what can be done in line with Commons scholarship.
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