Money, Banks and Finance in Economic Thought

"Money is theft" ? How Money and Finance Lead the Economy Astray

Papaud Simon, Université de Picardie Jules Verne/Université Lumière Lyon 2

In 1840, Pierre-Joseph Proudhon coined his famous phrase : « Property is theft ». Whereas Proudhon’s political thinking has been the object of many investigations, his economic theories weren’t given much consideration, especially after their harsh refutation by Karl Marx. Yet, Proudhon’s economic thinking might deserve to receive more scholarly attention, considering the importance of his legacy to the development of economic doctrines : through the intermediary of German merchant and economic theorist Silvio Gesell, the libertarian socialist exerted an unquestionable influence as well on John M. Keynes and his followers as on the post-1929 works of Irving Fisher. At the core of the proudhonian doctrine lies the idea of the illegitimacy of interest. According to proudhonian authors, the monetary system structurally allows the appropriation of a part of the product of labour by the capitalist class, because the creation and the circulation of the means of payment entirely depend on private initiative : this allows those who control this circulation process to levy a private tax on production – interest. Yet interest is not only theft to the labourers : It is also the condition to which the capitalists accept to lend and allow investment. As soon as this fundamental tribute becomes uncertain, they block the circulation – hence the many cycles and crises endured by the capitalist economies. The object of this paper is to characterize a proudhonian stream of economic thought, as a critical tradition placing the functioning of the monetary and financial systems at the heart of its theory of exploitation, cycles and crises.

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Keywords: Proudhon, Gesell, Keynes, Interest, Money, Finance, Cycles, Crises

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