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The Emergence of the Money Market and the Demise of the New Deal Order
Scholars and political actors alike increasingly understand the system of money and credit as so central to the economy that a redesign of finance is taken as essential if efforts to counter climate change, inequality, and racism are to have long-term success. In these discussions, the New Deal often serves as inspiration and warning. On the one hand, the reform of the financial system undertaken in the 1930s proved that democratic action can reshape the economy so as to support stable and equitable growth, even if the specifics of the New Deal encouraged the use of fossil fuels and benefitted mainly white men. On the other hand, many achievements of the New Deal proved relatively fleeting. The talk argues that an important reason for the demise of the New Deal order was that it never extended democratic governance to money, which sits at the apex of the credit system that channels resources through the economy. This is true not only for the delegation of monetary policy-making to an independent central bank but also for the removal from democratic debate of assets that are not officially recognized as money but possess a high degree of moneyness (Ricks 2016). These forms of near money were treated under the New Deal regime as mere “plumbing,” even though they were crucial “design” choices (Desan 2021:23). Changes at the top of the pyramid of finance forced apart the framework that had previously channeled credit in a relatively stable and egalitarian way.