By Ben Rininger.
Ole Bjerg’s 2014 book about the philosophy of money creation is a fantastic work; it is, in my opinion, a must-read for anyone curious about how money operates in today’s society and about normative questions surrounding money creation: How should money and credit function in a just society?
Unsurprising for a philosopher, Bjerg asks deep, deceptively simple questions—questions that the vast majority of people simply never begin to ask or answer abruptly without really investigating in great depth.
For starters, Bjerg asks What IS money? The question does not at first appear to invite anything profound. Of course we know what money is! We spend an astounding portion of our waking hours working for it. We use it to buy all the things we need to survive. We let it affect what partners we choose. We let it tear apart relationships. Many people commit heinous acts of violence over it. It is so ubiquitous in human life that, surely, we must have a grasp over what it IS.
Yet, according to Bjerg, “If you think you know what money is, you don’t know the first thing about it!”
Indeed, economists—the people we most expect to know about money, often disagree about how money works:
Is money created endogenously (as a result of borrowers’ demand and other existing economic forces) exogenously (independent of existing economic forces, set by an outside authority—in this case, the central bank), or as a consequence of both exogenous and endogenous forces?
How did it originate? Through barter (the commodity theory)? Through issuance and taxation by a sovereign state (the chartalist theory)? As a means to represent debt (the credit theory)?
Is money a thing or a system? How did humans come to value and base their societies around money?
Economists express disagreement on all of these things!
Bjerg argues that the mysterious nature of money, and all the man-made fictions surrounding money, are not bugs, but necessary features. He opines that the myths we hold about money (how it originates, how it functions) are what allow money, in the first place, to work.
Throughout his work, Bjerg applies the philosophical distinction of the ontic vs the ontological. He contrasts a level of analysis where one concerns one’s self with beings (the ontic) with a level of analysis where one concerns one’s self with being itself (the ontological).
Bjerg posits, that when it comes to money, regular people and politicians today are concerned entirely with the ontic, disregarding the ontological. People care about making money (appropriating an amount of existing money toward themselves and their families or, in the case of politics, appropriating existing money to certain groups through taxing, spending, and borrowing) but do not care about how money is made (how the banking system creates money and credit for society).
Bjerg invites the reader to take a deep dive into the ontology (the nature or existence of being) of our money system and gives a critical analysis of current financial markets. Bjerg utilizes philosopher Slavoj Žižek’s system of ontological categorization—the real, the symbolic and the imaginary—to characterize value, price and “the market.” Bjerg evaluates the exponential rise in derivatives trading since 1970, and shows, in great detail, how much of modern finance as an industry and as an academic discipline is based “on a series of symbolic fictions.” Bjerg demonstrates that the ideology that we project on our economy and society, rather than merely veiling or distorting reality, creates reality—fashioning what we see before our eyes. Indeed, many economic events are nothing but the result of self-fulfilling prophecy.
Making Money discusses the concept of ideological naturalization: how certain ideas and institutions that are completely artificial—not necessary, but temporal, man-made components of human existence—become in the minds, of many, natural, inseparable from reality—inevitable. People simply cannot see the world without said ideas and institutions.
Ole Bjerg mentions the 2008 financial crisis and how the Fed Chairman at the time, Ben Bernanke, urged Congress to bailout the banks lest there not be “an economy on Monday.” Bjerg asserts that what Bernanke should have said was that, without the bailout, there wouldn’t be “an economy based on post-credit money on Monday.” Bjerg illustrates today’s leaders, rather than envisioning and attempting to craft a new system of money, do everything they can to preserve the system as it is.
They cannot see a world without the system as it is.
Bjerg calls for an alternative: the sovereign money solution. Of course, familiar to everyone here at the Alliance, Bjerg’s proposal involves a transition away from our current arrangement where most money in society exists in the form of debt to a system where money exists entirely as an asset—one whose supply increases through government spending rather than private bank lending.
This book is good for anyone who is merely intellectually curious—regardless of political persuasion.
Making Money is a good book to read for anyone involved in the monetary reform movement who wants to embed their existing ideas within a philosophical framework, or who wants to think about money differently—possibly, as they never have before.
Bjerg makes the case that our disputes over money are not only technical, ideological, or jurisdictional; many disagreements we have over money are ontological or epistemological. We disagree over the very nature of money.
If you want to get down to the core of this disagreement, Bjerg’s book is for you. Making Money will make you more proficient in philosophy and will make you a more understanding and enlightened monetary reformer.
As is characteristic of philosophy when it is at its best, Making Money can light a spark in readers’ minds, leading readers to ask questions: to be critical of human life as it is, and to imagine how it could and whether it ought to work differently.
For this reason, reading Bjerg is a worthwhile endeavor as knowledge, I believe, carries value in and of itself.
As much as we structure our lives around money, it would not hurt to spend a little time trying to understand exactly what it is, and whether it is as it should be.
[…] Making Money: The Philosophy of Crisis Capitalism by Ole Bjerg—A Review and Recommendation […]
I just finished listening to your TED Talk for the second time and transcribing it word for word, and then ordering Making Money and Parallax. I can’t tell you how grateful I am for the Talk. I look forward to hearing your talk at the AMI conference this coming weekend
Thank you for your thorough and generous reading of my book. I am very grateful for your review.
You are the kind of reader that one dreams about when writing a book.
I wish you all the best,
Thank you, Ole! I wish you the best as well. I will admit, I have loved reading your work since I started interning with the Alliance. I recently bought your other book, The Meaning of Being a Man, and am waiting for that in the mail, so you could say that I am somewhat of a fan.
Great review. I definitely will put it on my ‘to do’ list. I am familiar with him because a youtube presentation Where Does Money Come From? | Ole Bjerg | TEDxCopenhagen – YouTube
Yes, that’s one of the greatest TED Talks ever (of course).
No empowered political or social change will happen until economic reforms are made, and that won’t happen until we leave usury commodity currencies behind and move to qualitative exchange mechanisms with no cost that incentives status to create sustainably. This means a no-cost, non-commodity exchange model that doesn’t need fractional reserve lending or usury to run it.
Great review! Though I haven’t read Bjerg’s book (this review is the first I’ve heard of the book), I have recounted many of the same things – the myths, delusions, misconceptions and disagreements about money – in my own monetary books. But in bringing up the fundamental question – What “is” money? – the review doesn’t mention the main negative thing money is: Power. Money is the command and control system that activates and directs the money-using world. Whoever issues the money – creates the money and allocates it to the people, businesses and governments who will spend it into… Read more »
Good job, Ben!