The paper opens with a consideration of the historical developments on the nature and features of money and endogenous money, and the post-Keynesian revival of ideas of endogenous money. Particular attention is drawn to the work of Basil Moore in relation to endogenous money, including the location of that analysis with commercial banks (some of whose liabilities are transferable and widely accepted as a means of payment) and the post-Keynesian-inspired revival of endogenous money. There is a brief outline of the aspects of financialization since the late 1970s which have relevance for the analysis of banks and money. Some thoughts are offered on the impact which those changes of the financial system have for the analysis of banks and of money.
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Following its revival in the 1980s, the idea of endogenous money became increasingly widely accepted. Indeed the 2008 global financial crisis was widely blamed on the untrammelled power of banks to create credit. As a result, among the ideas for reforming the monetary system are proposals designed to eliminate that power, that is, to make the money supply exogenous. The purpose of this paper is to go back to the theory of endogenous money in order to assess these proposals, in terms of what is desirable, but also crucially what is feasible. Central to this discussion is a consideration of the range of meanings given to money and endogeneity. It is argued that what is regarded as money under different conditions is an important element in money endogeneity, and is particularly relevant for the monetary reform debate.
This paper suggests that the near-optimal setting of the real policy rate of interest (the real overnight rate in Basil Moore's home country of Canada) is zero. This will achieve as close an approximation as possible to a fair distribution of income in a particular sense. It will also promote financial stability, inflation stability, high growth, full employment and higher real wages.
Giuseppe Fontana, Riccardo Realfonzo and Marco Veronese Passarella
The 2010s have witnessed a new shift in central banking and, partially at least, in monetary economics and macroeconomic modelling. It is a fact that the endogenous money theory has been gradually clawing back popularity at the expense of the classical theory of interest rates, the financial intermediation view of banks, the money-multiplier story and the quantity theory of money. However, the loanable funds theory and the view of banks as pure financial intermediaries (sometimes coupled with the money-multiplier story) are still sometimes invoked. In addition, the dynamic process of creation, circulation and destruction of money is usually neglected. The point is that money endogeneity is still regarded by many mainstream economists as a mere empirical fact, not a key feature of capitalist market-based economies to be properly explained by a logically consistent theory. By contrast, dissenting economists have further advanced the endogenous money view through: (a) a generalised theory of the endogenous process of money creation; (b) the increasing popularity of modern monetary theory in the public debate; and (c) the development of aggregative stock–flow consistent models and agent-based stock–flow consistent models as an alternative to dynamic stochastic general equilibrium models.
Christoph B. Graber
This chapter is about the relationship between AI technology and society in fundamental rights theory. In fundamental rights doctrine, the relationship between technology and society is seldom reflected. Legal practitioners tend to view technology as a black box. For scholars of science and technology studies (STS), similarly, the law is a closed book. Such reductionist or compartmentalised thinking in the law and social sciences must be overcome if a conceptualisation of AI technology in fundamental rights theory is to be successful. The chapter offers a perspective on these issues that is based on a re-interpretation of affordance theory (as originally framed in STS). First, the question ‘how do affordances come into a technology?’ is answered from the viewpoint of Bryan Pfaffenberger’s ‘technological drama’. Accordingly, the affordances (the possibilities and constraints of a technology) are shaped in a dialogue between a ‘design constituency’ and an ‘impact constituency’ in which the technology’s materiality and sociality are co-determined. Second, this theory is applied to study the co-determination of AI technology. Finally affordance theory is combined with socio-legal theorising that understands fundamental rights as social institutions bundling normative expectations about individual and social autonomies. How do normative expectations about the affordances of AI technology emerge and how are they constitutionalised?
Kieron O’Hara and Mireille Hildebrandt
This chapter contains a crossing of swords and thoughts between the editors, who come from different disciplinary backgrounds and different philosophical traditions, but nevertheless occupy much common ground. The conversation is too short to enable the cutting edge of Occam’s razor, but refers to other work with more extensive argumentation. We agree on a great deal. In particular, we share a precautionary approach that requires proactive consideration of how one’s experimental business models or progressive politics may impact others. However, as the reader will see, at that point we part company! The ensuing dialogue has been illuminating for us, and hopefully will whet the reader’s appetite for the excellent chapters that follow.
Kieron O’Hara and Mark Garnett
Political issues pertaining to data-driven agency and the use of ‘big data’ to make decisions about people’s lives are usually seen through the lens of liberalism. A conservative examination of data-driven agency requires a different lens. This chapter adopts the perspective of evolving modernity. It considers the philosophy of three major conservative thinkers, Edmund Burke, Alexis de Tocqueville and Michael Oakeshott, in the context of the problematisation of big data contained in Mireille Hildebrandt’s Smart Technologies and the End(s) of Law. Present-day conservatives need to rethink their traditional antipathy to the state, reverting to a Burkean understanding of the public-private distinction, and also to revise views of individual agency in the face of the facilitation of collective agency by networked digital technology.
If data-driven agency is a form of agency based on what machines have learned, it seems important to understand the nature and limit of the type of knowledge that can be mechanically obtained from digital data. After reviewing some of the popular claims made about big data this chapter explores some of the differences in the use of big data and machine science in the natural sciences and in the social domain. It insists in particular on the fact that in the natural sciences what constitutes data and how it should be interpreted are under the collective jurisdiction of specialists of the domain whose authority is recognized by governments, funding agencies and the general public, while in the social domain the data is often claimed to be simply ‘found’ though it is explicitly sought for a variety of reasons. It is not however ‘crafted’ in the sense of being validated and authenticated by the community of concerned researchers. In consequence, anyone who has the necessary technical competence gains the authority to interpret the data and declare what the data proves. Finally, the chapters analyzes some aspects of machine learning and science that tend to encourage the faulty interpretation that ‘data is enough’.
Gerard de Vries
This chapter discusses the threat digital technologies might pose to democracy by shifting the focus to the question on which points, and why, democracy might be vulnerable to digital technologies. Two conceptions of democracy are considered: a minimalistic one, which defines democracy as the form of government in which the power resides in the people and is exercised by them either directly or by means of elected representatives; and a relationist one, defended by Montesquieu and Dewey, which defines democracy by the way power is exercised under the rule of law. Although digital technologies may put society in disarray, under the minimalistic definition, democracy is found to be not at risk. However, for disregarding the conditions under which democracy can continue to function properly, the minimal conception is found to suffer from ‘the fallacy of misplaced concreteness’. In contrast, the Montesquieu/Dewey conception allows to identify several vulnerabilities – both on the level of electoral law and the electoral system, and on the level of the way ‘public interest’ is organized – which, if not properly addressed, may annihilate the liberty achieved by the rule of law. Some policy-options for managing these vulnerabilities are suggested.
Julie E. Cohen
For several hundred years, political philosophers and legal theorists have conceptualized media technologies as ‘technologies of freedom’. Some things about that equation have not changed; certainly, access to information, the capacity for reason, self-determination, and democratic self-government are inescapably interrelated. In other respects, however, the operation of contemporary platform-based media infrastructures has begun to mimic the operation of the collection of brain structures that mid-twentieth-century neurologists christened the limbic system and that play vital roles in a number of precognitive functions, including emotion, motivation, and habit-formation. Today’s networked information flows are gradually being optimized for subconscious, affective appeal, and those choices have proved powerful in ways their designers likely did not intend or expect.