A political theory of money without the politics - Anush Kapadia, A Political Theory of Money, Cambridge University Press, 2023

Events of the last 20 years have shaken the widely held belief that money is a technical, apolitical issue.Both the Global Financial Crisis of 2008 and the COVID-19 crisis have reminded us that money and its governance represent, on the contrary, deeply political issues.Kapadia's book is part of a fast-growing literature that grapples with this realisation and analyses various aspects of the political nature of money as well as its implications for policymaking from monetary policy and fiscal policy, via financial regulation, to international cooperation and trade.The book attempts to synthesize the most compelling elements of the banking, state, and currency schools of monetary thought while avoiding their pitfalls.While each of these theories is, by itself, at once incomplete and overreaching, Kapadia argues that their insights are modularand in recombining those insights he finds the theoretical resources to begin addressing several longstanding problems in the theory of money.For example, the banking school rightly understands money as credit but lacks an account of hierarchy in money and so cannot explain why 'some monies are better than others' (xi).Kapadia observes that the state school offers such an explanation, as it recognizes the central role of the state in money creation.But this solution is only partial, as it threatens to confuse the nominal power of the state with politics itself.What, then, is the central role of politics in a theory of money?Kapadia argues that individual economic units are a kind of illusion.Since one unit's credit is another unit's debt, economic actors are mutually defined, inextricably embedded in 'the social ontology of any economy' (9).Households, firms, and even states can be represented as interlocking ledgers in which the assets of some are necessarily the liabilities of others.These economic actors are therefore mutualised: 'one unit's cash commitment is another's source of cash' (10).But not all mutualisation is equal.The liability a customer deposit creates for a bank is economic mutualisation.In contrast, a state's imposition of taxes is political mutualisation, an interlocking of the ledgers of taxpayers with the state, and with each other, all mediated by politics.These two kinds of mutualisation account for money's hierarchical character.There are exceptions, but in general, the highest quality money is politically mutualised: a hegemonic global currency ('world money'), followed by national monies which rely on their national economies as especially powerful and creditworthy reserve assets.Further down the hierarchy we generally find commercial bank monies and other economically mutualised relations.Thus, the robustness of credit claims depends on the political organization of a state, as well as its future economic prospects.Money, and its value, is therefore unavoidably political.Kapadia's articulation of these two kinds of mutualisation is a welcome contribution, but it is less clear that his view is a genuine compromise between commodity, state, and credit theories of money.In trying to position his account as a theoretical synthesis, he at

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