The Currency of Politics: The Political Theory of Money from Aristotle to Keynes

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A fresh and splendidly clear guide to the intellectual history of monetary policy. . . . The Currency of Politics is an invaluable guide to why — and how to think about what comes next."—Felix Martin, Financial Times

This excellent book is for anyone who has ever wondered about the origins of the Eurozone, the causes of the currency crises, and the importance of the classical gold standard. Frieden combines lively historical narratives with statistical analyses to show that currency politics are pretty much the same across time and space. No other author could bring out the common threads running through the book's cases so clearly." —J. Lawrence Broz, University of San DiegoWith deftness, elegance, and intellectual verve, Eich paints a vivid and compelling picture of the whole history of political and economic thought as revealed through an interrogation of money. It is clear that this insightful book announces a new and important voice in the field.” —David Singh Grewal, author of Network Power With this framework in place, a set of case studies is used to test the relevance of political economy to currency policy at various stages in history: namely, the United States during the transition to the gold standard (1862-96); European monetary integration between 1973-94; and Latin American policy between 1970-2010. The individual elements of Frieden’s theories are tested empirically to understand how important the political economy of currency policy is to explain voting patterns and government policy choices. Identifying the motivations for currency policy preferences on the part of industries seeking to influence politicians, Jeffry Frieden shows how each industry’s characteristics—including its exposure to currency risk and the price effects of exchange rate movements—determine those preferences. Frieden evaluates the accuracy of his theoretical arguments in a variety of historical and geographical settings: he looks at the politics of the gold standard, particularly in the United States, and he examines the political economy of European monetary integration. He also analyzes the politics of Latin American currency policy over the past forty years, and focuses on the daunting currency crises that have frequently debilitated Latin American nations, including Mexico, Argentina, and Brazil. Eich’s work is sure to be a landmark in political science. His argument is bold and ambitious; his writing clear and engaging; and his message timely, persuasive and imperative."—Erik Jones, Survival A pathbreaking new intellectual history of monetary policy. In examining how key thinkers approached the economic crises of their respective times, Eich offers a map for navigating the politics of money today."—Daniel Steinmetz-Jenkins, The Nation

The field of currency policy is increasingly important as the global economy becomes ever more integrated; however, it is poorly understood by the general public and often forgotten until a crisis arises. The influence of contingent political factors on the ability of governments to change their monetary policy is shown to be profound. Frieden makes his research accessible to a broader audience through Currency Politics; it is a challenging read in parts, but worth the effort to understand how national politics shape currency policy and the possible future of international currency regimes. If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 € per month. Eich’s contribution demarcates a new space for political thought on money, and brings together key theorists on the structuration of money both to show that political thought often has a direct effect on the type of monetary system that is maintained, and to show that democratic agency vis-a-vis money is often wilfully ignored."—Dominic Burbidge, Politics and Poetics

Professor of Government

The chapters on currency policy in nineteenth-century USA are particularly illustrative: large-scale infrastructure investment acted as a catalyst for economic growth and geographical expansion across the new continent, leading to the emergence of two competing political blocs in the agricultural hinterland and urban centres of industry and finance. Railroad magnates funded new railways using foreign-denominated debt and had strong interest in moving away from gold to a floating exchange rate. Farmers and mining firms shared this interest and voted for lower price levels along with a floating exchange rate to guarantee competitiveness in export markets. Manufacturers went against expected behaviour for two reasons: import tariffs were relatively high, particularly after the Civil War, and the US was geographically distant from potential competitors. With high transport costs protecting firms from competition with European counterparts, they could easily pass-through the costs of currency fluctuations to consumers. The Latin American analysis conversely brings to light a tendency for currencies to appreciate in the lead-up to an election, boosting the purchasing power of consumers to support re-election for the incumbent government, but in some cases creating unsustainable price levels and precipitating a currency crisis. Frieden undertakes careful examination of currency politics. . . . [M]eticulous [and] well-informed. . . . Recommended."— Choice A deep ex­amination of the theoretical and political foundations of money that rescues the money discus­sion from economists."—Pratap Bhanu Mehta, Open Magazine A decade and a half later, they have a podcast. It’s called Political Currency, and it follows the stunningly successful format of The Rest Is Politics, where Blairite spin doctor Alastair Campbell and erstwhile Tory heavyweight Rory Stewart “disagree agreeably” about politics to millions of eager listeners. To distinguish themselves, Osborne and Balls are focusing specifically on economics (“currency” – get it?). Apparently they “have the knowledge and experience to explain how good politics follows the economics”. A look at how their careers ended – with Balls losing his seat in 2015 and Osborne’s ascendance cut short by the 2016 EU referendum – suggests this is up for debate.

The Currency of Politics breaks the frame we use to understand money. More than an instrument or an institution, currency becomes a nerve center of political theory. Deeply in dialogue with the past, Stefan Eich compels us forward to conceptualize money as a medium for democratic agency—or its loss. A tour de force.”—Christine Desan, author of Making Money: Coin, Currency, and the Coming of Capitalism In the wake of the 2008 financial crisis, critical attention has shifted from the economy to the most fundamental feature of all market economies—money. Yet despite the centrality of political struggles over money, it remains difficult to articulate its democratic possibilities and limits. The Currency of Politics takes readers from ancient Greece to today to provide an intellectual history of money, drawing on the insights of key political philosophers to show how money is not just a medium of exchange but also a central institution of political rule. An intellectual history of money that theoretically grounds the works of others working on democratizing money. The Currency of Politics is a great addition to the philosophy of money."—Valerie Schreur, Oeconomia Eich’s book is ultimately a call to revive democratic debate about money…this excellent book…does not tell us what to do, but he does show us something can be done."—Geoff Mann, New Statesman Currency Politics is an ambitious book on an important topic. Frieden is one of the best political economists and one of the best scholars writing on this subject."—Sebastian Edwards, University of California, Los Angeles and author of Toxic Aid

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The book is readable for both economists and political scientists. I recommend Currency Politics to both sets of scholars. Economists will learn about the political aspects of exchange-regime choice and political scientists about the economic aspects."—Lawrence H. Officer, EH.Net