Political Money

The basic institutions of modern democracy were established at a very early stage in the transformation that societies have undergone since feudalism. In their establishment, forms that had developed even before feudalism, in Greece and Rome, were copied. Thus the institutions are very old ones indeed. When the age of these political institutions is compared to that of economic institutions, the contrast is sharp and striking. As society has become more and more rationalized, economic transactions have mirrored this ever-increasing rationality, with increasing technical sophistication, and increasing abstraction. The best indicator of this is in the role of money. From barter economies to modern economies in which bank-deposit money and credit account for most transactions, the development of economic mechanisms for effecting exchange has been very great. Yet the development of political institutions, and of mechanisms for effective political authority, has been far less great. In this paper, I want to explore the similarities and differences between political power and the embodiment of economic power or value, that is, money. A careful examination of the differences will suggest which of the differences are intrinsic to the differing natures of economic and political transactions, and which are accidental. This will then allow raising questions about what kinds of innovations in political institutions might be feasible, and might allow these institutions to develop more compatibility with the technical and economic changes that occur with such rapidity in modern society.