Monetary dissent and the erasure of state power in American history

Modern Money Theory (MMT) is part of a generations-old dissenting tradition that has challenged conventional, “commodity-exchange” models of finance by documenting money’s origins in credit and its anchor in state power. Defenders of the conventional wisdom have generally responded to these challenges—including that posed by MMT scholars—by ignoring or dismissing the substance of this critique: by insisting upon a sharp distinction between “money” and “credit” and, in doing so, masking a unique power of money-issuing authorities. After briefly introducing the trans-Atlantic history of these political and intellectual contests, this chapter turns to the modern United States and the battles over financial reform and economic theory unleashed by the Great Depression and New Deal experimentation. It demonstrates how the reassertion of economic orthodoxy during this era proved consequential to sustaining monetary myths that MMT scholars and other dissenting voices continue to challenge.