Date of Submission

Spring 2024

Academic Program

Economics; Philosophy

Project Advisor 1

Robert Weston

Project Advisor 2

Kyle Mohr

Abstract/Artist's Statement

This article investigates on the resemblance between structuralism and credit money with money creation in modern monetary theory (MMT) and post-Keynesian theories. Keynes, whom MMT takes up for its theoretical foundation, considers fiat money to be firstly a debt, a promise exchangeable for the same financial value, because it does not have any intrinsic value, but is generated only from the credit of government. The ranking of credibility of money leads to the taxonomy of money in the form of a money pyramid: the money issued by the government (fiat currency) with the most credibility, then money lent by banks, and then money in the form of gift cards or from nonbank institutions. However, money creation is only an example of policies that the sovereign government implements for the stabilization of the economy and stimulation of its output. Money creation through debt must be reflected on a balance sheet as assets (money created) and liabilities (debts), which already demonstrates a structuralist element: fiat money only has its accepted value, semiotically, in relation to debt as its negative reflection. Saussure and Marx offer two algorithms of understanding relations: the Saussurean sign of the signifier and the signified and the Marxist theory of exchange value and use value. The first represents the relation of semiology, the latter the relation of commodity in political economy. The combination of the two algorithms leads Baudrillard to the concept of simulacrum (empty signifier) and symbolic value. Baudrillard maintains that money functions as an empty signifier, which Lacan relies on for his concept of phallus, or master signifier. Criticizing Lacan, Irigaray literalizes the exchange of women as commodities by men to overturn the androcentrism of the phallus. Goux depicts a homology between the phallus and the gold standard currency, which, although not related to credit money in MMT, is helpful for the understanding of the relation between phallus and fiat money. The theories of these philosophers enable a structuralist analysis of fiat money in MMT. The failure of the 1968 uprising caused many philosophers’ departure from Marxism, and indicated the failure of Marxism: the proletariats’ labour that holds for the decentralization of the political economy disappears. The emergence of the decenter meaning of signifiers vanishes as well. Because fiat money is only an empty signifier, which relates to other empty signifiers for its symbolic value, the government’s operation on fiat money does not change its initial state of emptiness. In this way, fiat money functions as the Lacanian phallus, the master signifier, which replaces the gold standard with the credibility of the government, because it not only is legislated by the law of the government, as a unit of account for exchange, but also represents and regulates the desire of the users of money, just as the phallus is related to the desire of the subject. Although MMT seems to situate the government at the center of the economy, it does not contradict the structuralist tradition, but supplements it with emptiness of referent and signified.

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