Postwar economists treated money as redistributionally neutral, echoing Hume’s view
Evidence
Despite Keynes’s General Theory being subtitled “of Employment, Interest and Money,” postwar economics never put all that much thought into money. There was a view that gained prominence in the 1970s—monetarism—that thought about money a great deal, and we will examine that view shortly for different purposes. But for most economists from the 1930s on, money was seen in pretty much the same way that Hume saw it 200 years before, as short-run stimulative, long-run neutral, and/or potentially inflationary. Money, it is sometimes said, “changes neither preferences nor possibilities.” Money in the form of credit, therefore, is simply one person’s nonspending transferred to another person to use for an interest payment plus the return of the principal. Put more simply, one person’s debt is another person’s income. It’s simply a redistribution of existing assets and nothing to get excited about. — Mark Blyth, Austerity, 386
Categorization
- XREF: The ‘money changes neither preferences nor possibilities’ neutrality view directly contrasts with the Austrian/Minskyan credit-superstructure account that Mattei and Post-Keynesians build on. — connects to: Monetarism restated David Hume’s quantity theory of money — Mark Blyth, Austerity: The History of a Dangerous…, 412; Friedman framed monetarism as value-neutral science rather than ideology — Jessica Whyte, The Morals of the Market: Human Rights…, 336; In the 1960s even Milton Friedman endorsed basic income redistribution (+1 more)
Broader Connections
- In the 1960s even Milton Friedman endorsed basic income redistribution
#contradicts(0.85) - Friedman framed monetarism as value-neutral science rather than ideology
#expands(0.80) — Jessica Whyte, The Morals of the Market, 336 - Rational expectations theory implies fiscal policy is neutralized when agents anticipate it
#expands(0.75) — Mark Blyth, Austerity, 126