>
> > So, among the points in the more extended quote, the main use of money
> > is social control, and this is achieved by keeping its quantities
> > limited to some mystical level where basic social reproduction can
> > take place under a domineering austerity (thanks Allan you
> > asshole).
>
> Not quite -- the main use of money is exchange, this isn't necessarily
> tied to social control or domination as such. Issue lots of money to the
> broad masses and you'd get a consumption boom, not a bad thing in itself,
> but certainly not a revolution. Capitalism is about turning money -- the
> vehicle of exchange -- into credit -- the vehicle of accumulation,
> resulting in ceaseless dynamism, speculations, the creation of new goods
> and needs, and spectacular crashes and human misery, too. Much more
> complicated than the merely symbolic.
Money has at least two other functions: unit of account and store of value. As a unit of account, territorial money sets terms for the creation of credit and debt (ie recycled OPEC surplus as debt in the 70's). As a store of value, it sets a limit on accumulation. It might be argued that capitalism is about turning credit into money, rather than the other way around. It is fundamentally speculative--though some speculations hit the ground more forcefully than others.
I seriously doubt that AG ever gets to "social reproduction," a moonshot-sized conceptual leap from "equilibrium"-- a concept or value he has only gotten only incidentally anyway.
But as to the efficacity of monetary policy: how much of the bubble's deflation should we attribute to monetary policy? Someone in FT last week complaining that AG brought the bubble to a screeching halt--a proposition I find difficult to follow. Would earnings reports been rosier with interest rates 1.5% lower?
Christian