Designing money: culture and the political construction of modern monetary regimes

Date
2023
DOI
Authors
Olsson, Erik
Version
Embargo Date
2025-07-27
OA Version
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Abstract
Why do countries have different monetary systems? Existing theories of monetary development generally focus on the economic forces driving such developments or on the power of states to impose their preferred systems. These theories highlight important structural preconditions, but they do not provide an adequate analysis of money’s institutional design during periods when the very essence of money is questioned and contested. This dissertation explores the emergence and distinct evolution of modern monetary regimes in Europe, using a cultural approach to refocus attention to critical processes of monetary contestation and reform. By framing the politics of money as a process of meaning-making, such an approach reveals how monetary regimes are constructed around specific conceptions of money and identifies connections with broad social, political, and economic imaginaries. This argument is explored and substantiated through the comparative-historical study of two countries, Britain and Sweden, in two periods of monetary change. By tracing and juxtaposing processes of meaning-making during periods of monetary contestation and reform, the analysis finds that the design of modern monetary and banking systems in the 19th and early 20th centuries was steered by cultural debates on the relationships between money, social order, and political authority. In 19th-century Britain, concerns over the political and socio-economic rise of the masses led elites to construct a monetary order centered on the principle of monetary discipline, while in Sweden, a developmental monetary regime emerged as a result of political conflict over the privilege-based organization of society. Both monetary orders were contested in the interwar period, but the ensuing reform efforts once again produced distinct results. In Britain, despite reforms spearheaded by Keynesians and influenced by new ideas for social justice, there was only limited reconfiguration of the monetary regime, and core features of the traditional order survived. The Swedish monetary order, in contrast, was radically transformed. A new cultural emphasis on the public good coincided with the rise of social democracy, resulting in a monetary regime subsumed within the broader macroeconomic-policy framework of the postwar welfare state. These findings shed new light on the divergent development of monetary systems, and the argument and analytical framework have implications for understanding contemporary capitalism and for thinking about possibilities for monetary reform in our current era of financial capitalism.
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