Overview

How the creation of money and monetary policy can be more democratic The power to create money is foundational to the state. In the United States, that power has been largely delegated to private banks governed by an independent central bank. Putting monetary policy in the hands of a set of insulated, nonelected experts has fueled the popular rejection of expertise as well as a widespread dissatisfaction with democratically elected officials. In Our Money, Leah Downey makes a principled case against central bank independence (CBI) by both challenging the economic theory behind it and developing a democratic rationale for sustaining the power of the legislature to determine who can create money and on what terms. How states govern money creation has an impact on the capacity of the people and their elected officials to steer policy over time. In a healthy democracy, Downey argues, the balance of power over money creation matters. Downey applies and develops democratic theory through an exploration of monetary policy. In so doing, she develops a novel theory of independent agencies in the context of democratic government, arguing that states can employ expertise without being ruled by experts. Downey argues that it is through iterative governance, the legislature knowing and regularly showing its power over policy, that the people can retain their democratic power to guide policy in the modern state. As for contemporary macroeconomic arguments in defense of central bank independence, Downey suggests that the purported economic benefits do not outweigh the democratic costs.

Full Product Details

9780691244433

Table of Contents

Reviews

""[Our Money] is meticulously researched, topical in an era of deepening inequality and poses important questions for even the most ardent defenders of central bank independence.""---Enda Curran, Bloomberg ""This is a great book. It’s a wonderful analysis of . . . democratic theory to monetary policy, which is a great contribution to great political theory. It shows deep knowledge of economics as well as democratic theory.""---Jeffrey Church, The Political Theory Review ""Recommended"" * Choice *

Author Information

Leah Downey is junior research fellow at St. John's College, Cambridge, and a coeditor of A Political Economy of Justice.

Tab Content 6

Countries Available