This article appears in the August 2026 issue of The American Prospect magazine. If you’d like to receive our next issue in your mailbox, please subscribe here.
At a time when it seems increasingly hard to tell fact from fiction, it can be tempting to rely on numbers instead of words and images to reveal the unvarnished truth. In a capitalist society, the main numbers are monetary: output and income, prices and profits, assets and debts. Converting subjective qualities into objective quantities, money appears as the ultimate impartial account—the bottom line. Yet rather than offering a transparent register of all the economic activities it represents, money is more like a magic mirror from a fairy tale, transforming the people and things it reflects. That’s the fertile thesis of the economists J.W. Mason and Arjun Jayadev in their unorthodox new guidebook to what they call “money world” for lay readers, Against Money.
Against Money
By J.W. Mason and Arjun Jayadev
University of Chicago Press
Drawing on the left wing of the once-dominant liberal tradition of economic theory derived from John Maynard Keynes, Against Money is less a polemic against the power of money in modern life than an incisive critique of how we think about the relationship between money and the labor and material wealth it is supposed to signify. In the conventional view, rooted in the classical economics of Adam Smith’s The Wealth of Nations (1776), money is seen as essentially a measure of the value of goods and services, based on either the cost to those who produce them or the utility to those who consume them, and a medium for exchanging commodities without requiring a “coincidence of wants” between buyers and sellers. While it crucially facilitates the societal division of labor and market relations, the theory goes, money does not ultimately determine what is produced and consumed or bought and sold—the fundamental features of what economists call the “real economy.”
But as Mason and Jayadev’s richly illuminating book shows, money in the modern world is actually the resource being measured and the ultimate object of exchange itself, operating according to its own rules rather than those of the market for goods and services depicted in mainstream economics, and shaping the “real economy” in its financial image—potentially for better as well as for worse.
Perhaps the clearest example of the notion that the web of monetary payments is merely a thin veil stretched across all the things made and services performed in a market economy is the concept of a country’s annual output. The very idea of calculating such a grand total is intrinsically monetary, as Mason and Jayadev emphasize, for only by reducing the myriad kinds of commodities to a single standard of exchange value can they be aggregated and counted together. Add up the market value of every final good or service produced in a given country in a given year and you have its gross domestic product (GDP), the modern version of Smith’s “wealth of nations.”
“Final” excludes commodities used to produce other commodities, to avoid double-counting the values of intermediate goods along with those of the end products. But is everything that households purchase a final product in this sense, as statistical agencies assume, or should large household expenses, such as those for commuting to work, be considered intermediate costs of earning an income, and deducted from GDP?
Against Money is an incisive critique of the relationship between money and the labor and material wealth it is supposed to signify.
On the other hand, GDP includes certain commodities even though they are not paid for, “imputing” a high market value, for example, to the services that homeowners ostensibly receive from living in their property themselves instead of renting it out. Yet no such implicit price tag is placed on the vast amount of unpaid child care and housework provided by family members, though comparable paid care labor is counted in GDP. As Mason and Jayadev convincingly conclude, such subjective accounting conventions do not approximate the nation’s objective productive activity. They construct a fictional substratum of goods and services in the shadow of a superstructure of recorded payments and imputed prices.
To track changes in production over different periods or to compare the quantity of commodities produced in different countries, statistical agencies need to correct for variations in the means of measurement, the value of money itself. So they divide the market value of annual output by a price index to compute what is deceptively called “real GDP.” But what a price index measures turns out to be as contested and subject to changing standards as GDP itself, as Mason and Jayadev explain. Should an index tally the prices of an unchanging basket of basic necessities, as the first national indexes did a century ago? Or calculate the cost of maintaining a certain standard of living, as labor leaders urged in the World War II–era heyday of cost-of-living adjustments in union contracts? Or gauge the rising level of prices overall, as inflation-fighting policymakers advocated amid the long postwar boom? Should an index screen out price increases due to major improvements in the quality of certain classes of commodities, as the U.S. Bureau of Labor Statistics does by aggressively adjusting the prices of increasingly powerful computers—but not the prices for increasingly effective medical treatments?
Such contentious decisions about how and what to measure profoundly affect officially reported changes in prices, broadly determining the picture they draw of “real” output, growth, and productivity.
If money is not a passive mirror of a nation’s goods and services, neither is it a neutral medium for their market exchange. The great majority of payments are made on credit rather than in cash, and the mammoth growth of debt at all levels—household debt, business debt, government debt—has far outpaced the production of commodities in the United States over the past 50 years. When we “pay” for goods and services on credit, the true amount of money we spend varies depending on our interest rate, how quickly we pay off the outstanding balance, and so on.
Yet economists describe debt as simply the sign of an indirect exchange of goods today for more goods in the future, with credit serving as the medium that enables such time-delayed trades to take place.
Seen in this way, the growth of debt stems almost by definition from heightened borrowing, as people exchange more promises of future repayment for money with which to purchase current commodities. But in fact, as Mason and Jayadev argue, most of the deepening debt in recent decades has resulted not from increased spending of borrowed money on current consumption, but from stagnating incomes and tax revenues in conjunction with rising interest rates, ratcheting up households’ and local governments’ debt burdens even as they tightened their belts. As Keynes saw during the Great Depression, painful cutbacks in private and public spending ironically fueled the spiral of debt, by diminishing demand for goods and services and thereby slashing incomes and slowing economic growth.
Economic orthodoxy defines interest as the price of savings, the value of the means of paying for goods now in terms of the means of paying for them later. It’s essentially the exchange rate for the trade in goods and services between two time periods: the present and the lifetime of a loan. In the moralizing language of classical economics, interest is the premium that creditors charge for their “abstinence,” delaying gratification of their desires for all the things money can buy, and the premium that debtors pay for spending instead of saving.
But if, as Against Money demonstrates, debt is not a trade of what debtors buy with the money they borrow today for what creditors purchase with the payments they receive over a period of months or years, then interest is not the price of postponed consumption. The authors point out that most borrowing finances not consumer spending, but repayment of previous debts and investments in homes, businesses, bonds, and other assets acquired to generate future income. Nor do interest rates merely or mainly set the terms of new lending, since lenders rarely hold onto loan contracts until their maturity dates. What creditors primarily pay for is not the goods they will eventually purchase with the interest they charge, but financial assets that are sold and resold many times while loans are being paid off. As Mason and Jayadev explain, creditors are largely speculating on the prices of tradable loan contracts (in other words, bonds) that they buy in order to sell, whose value thus depends more on the secondary market in such securities than on the market in nonmonetary goods and services.
A typical bank loan entails no indirect trade of goods but a direct exchange of two kinds of financial assets: a bond entitling its owner to a series of payments from the borrower on a fixed schedule and a deposit entitling the account holder to a sum of cash from the bank. Money in one form, as the authors put it, is exchanged for money in another. Interest represents the exchange rate between cash deposits and credit contracts, based on the greater flexibility and security of money in the bank—Keynesians call it the price of “liquidity”—and the comparative rigidity and risk of bonds, whose value rises and falls inversely with interest rates. Rather than reflecting the “real economy,” finance forms a world unto itself.
Critics commonly deplore the insular pursuit of financial profits on Wall Street in reckless disregard of the industrial and commercial consequences for Main Street. But like a long line of Keynesian theorists, Mason and Jayadev find a far-reaching if largely latent progressive potential in the relative autonomy of “money world” from the market economy on which it preys. Finance as they describe it is predicated on the limitless exchange of promises, the endless circulation of IOUs like bank deposits and bonds, and the potentially self-sustaining cycle of spending, income, and investment. The sole scarce resource in the financial realm is confidence or trust, “the capacity to make and accept promises.” And the only requirement for a more just and equitable economy is not material redistribution but financial cooperation and “coordination”—the visionary keyword in the authors’ vocabulary, though they offer no positive blueprint for reform. “Money’s great role in our lives is as a coordination device,” they write.
Yet if money is not merely a measure of value or medium of exchange, it is also more than a means of coordination. It is a central instrument of class rule and subject of class struggle. If money appears as a “magic mirror,” its true power comes from those who wield it, and from the illusion that power emanates from money itself. Against Money says much about what this powerful device can enable people to do, but little about who actually does it. It deftly chronicles the modern history of output and inflation, macroeconomics and monetarism, but overlooks the political and social history of money itself.
A wave of revisionist scholarship by anthropologists, sociologists, and historians in recent years reveals that money originates not in the economic activities of merchants, manufacturers, or bankers, but in the political authority of ruling classes to exact tributes, tolls, and taxes, and to dictate and direct the means of discharging those debts. When Mason and Jayadev suggest that “money creation is everywhere in a modern economy,” they elide the long history of class conflict over what should serve as money, who should control its creation and circulation, and how they should do so.
They identify the main obstacle to their inspiring ideal of democratic finance in outmoded ideas about money’s relationship to the “real economy.” As Keynes famously concluded his General Theory of Employment, Interest, and Money (1936), “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else … I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.”
Keynes left out the searing social struggles over the supply of money, the demand for money, and the meaning of money—the central subjects of his work as well as Mason and Jayadev’s. His classic treatise similarly paid scant attention to the relationship between “vested interests” and government, even as he made the state the central agent in his plan for a gradual “euthanasia of the rentier” and of the “oppressive power of the capitalist.”
Mason and Jayadev derive a more radical social-democratic prescription from Keynes’s diagnosis of the Great Depression than he did. Against Money sparkles with critical lessons to guide progressive fiscal and monetary policy and financial reform today. But to understand why capital’s power to oppress has proven more enduring than Keynes anticipated, this extraordinarily provocative study should be coupled with a searching examination of the class structure of modern money itself.
This article appears in Aug 2026 issue.
