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I have no skin in this fight, but this thread really got me thinking about what I think is really a key aspect of the constitutional approach to money, and which it might share with MMT. Very early thoughts on this so be forgiving! (Short thread.) 1/8 https://twitter.com/NathanTankus/status/1333036037656997898
Unlike the vast majority of economics and political economy scholarship (not all!), the constitutional view takes as its primary frame not only individuals and their interactions, but also groups. (Someone else might say community, political community, state, whatever.) 2
This is extremely important for understanding the view! We don't start with "humanity", human nature, the logic of exchange, but with particular groups (or group leaders) trying to marshal resources and organize themselves. 3
The view then focuses on group dynamics, and specifically on the ways in which groups allocate resources and build economies through legal architecture. This, as far as I'm aware, is nearly always where the use of money as a unit of account has been established. 4
Media of exchange are extremely varied through history. But established, long-lasting units of account are somewhat rare. To my knowledge, they are (nearly) always established through the advance of credits that are then accepted back to a central stakeholder of some kind. 5
But the story doesn't end here!! From this middle perspective, we can then either focus downward on exchange between individuals within those polities ("cash premium" etc...), or we abstract outward and look at international exchange (bullion flows, e.g.). 6
(As an aside, I know Roy Kreitner is writing a book on the gold standard, and I'm excited to see what he says about how the anchoring of domestic currencies to gold bullion impacted international monetary exchange.) 7
In either case, the focus is not on universal individual dynamics under a liberal framework, but on dynamics both within and between historical groups. (Hence the import of law!) You can go down or up, but either way you start in the middle, not beneath or above it. 8
Regardless, the idea that observing individual monetary exchange and/or international monetary exchange critiques the view doesn't land for me. We can explain those phenomena; we just don't start there. 9/end
One small fix: above I say UofA are generally made by a stakeholder advancing and accepting credits. I think better would be "denoting" than advancing. Often a stakeholder can outsource issuance, but still set the terms of the credit and give it value through offering to accept.
