Confict Theory of Money

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Wolfgang Streeck:

"That money is far more than this is something for which Parsons, and American sociology in general, might have found ample evidence in his own country—not merely in the interwar years, which after 1945 were somehow declared an exceptional era, but in its earlier history. The discovery of that evidence, however, had to await the emergence in the 1990s of the ‘new economic sociology’, which undertook the rehabilitation of Weber’s view of money as weaponry in the ‘market struggle’. A contribution to this development, as important now as it was then, was furnished in ‘The Color of Money and the Nature of Value’, a study by Bruce Carruthers and Sarah Babb of the domestic political conflicts over a new us monetary system after the Civil War.footnote8 The authors adopted an analytical distinction proposed by the political scientist Jack Knight: monetary systems, like institutions in general, could not be judged merely according to ‘the coordination-for-collective-benefits conception of social institutions’—in other words, by whether they provided an inter-subjectively communicable symbolization of values and value claims. Just as legitimate and even requisite, according to Carruthers and Babb, was the conflict perspective—we might even call it the political perspective—put forward by Knight, in which a monetary system comes into existence as the result of disagreements between actors with competing interests.footnote9 As such, it may possess more or less asymmetrical distributive effects and conflicting interests, which are often more important in social reality than their efficiency.footnote10

‘The Color of Money’ reconstructs the political and economic divisions over the future monetary regime of the United States, and the nature of money in general, during the last third of the nineteenth century. At that time, the battlefront ran more or less centrally between the Smithian and Weberian conceptions of money. The first emphasized the dependability of money as a medium of symbolic communication, for efficient economic coordination and social integration; this was linked to a naturalist value theory and the call for a return to the gold standard. The alternative view, based on a remarkably well-developed social-constructivist theory of the value of money, espoused the introduction of freely created paper money. As was to be expected, the advocates of gold stressed the public interest in a value-symbolization that could inspire confidence, while the supporters of ‘greenbacks’—printed dollar bills—emphasized the divergent distributive effects of the two concepts of money, representing different material interests. And indeed the rival approaches were rooted in different accumulation practices and ways of life: advocates of the gold standard represented East Coast ‘old money’ and were interested above all in stability; the paper-money contingent was based in the South and West and wanted free access to credit, either to help devalue the debts they had incurred or to boost expansion. Conflicting interests over which development path the fast-growing capitalist economy should take were linked to opposing structures of class power and privilege: the lifeworld of a patrician urban class, above all in New York, against that of the indebted farmers and ‘cowboy operators’ in the rest of the country." (