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Christine Desan, The Monetary Structure of Economic Activity: A Constitutional Analysis, L. & Contemp. Probs. (forthcoming 2024).

Abstract: By revealing a community in radical transition, constitutional crises expose money’s relationship to the market. That essential dynamic is more easily disregarded in routine times. Modern commentators deflect analysis further by imputing a basic divide between real and monetary activity. This essay retheorizes that relationship using the Civil War experience as a setting. The exercise illuminates money as a practice that constructs the market architecture across crises and calms. First, contriving a public unit of account creates commensurability in value and makes possible prices. That accomplishment is, at the same time, an arresting act of constitutional reorganization. To create a money, communities literally transmute political obligation into a unit and enable that entity to circulate: modern money is a sovereign liability that can offset individual indebtedness. Consonant with that faculty, the initiative expands public capacity and realigns private relations. Second, enabling money as a medium structures its operation. Money issues from public and private market actors who are advantaged by their ability to create it and it attracts users into its measurement system through their demand for that medium. Those features – discrete issue and particularized demand – are inherent to the phenomenon of circulation and, in turn, affect production. Third, a government curates exchange by enforcing those transactions in money that it approves. As it defines “commodities,” shapes contract, and develops property, the polity dredges the monetary channels of exchange. In the face of money’s sweeping effects as a unit of account, medium of exchange, and mode of payment, its disregard in modern economic theory is a major default. Analyzing money creation exposes it as the structure that configures economic activity.