Banks create near-money from scratch through their lending activities. Some neoclassical, such as Maurice Allais and Irving Fisher, have identified this mechanism but have proposed deflation solutions substantially inspired by the quantitative theory of money, which considers money as a commodity.
The solution lies rather in the state control of the quasi-monetary creation mechanism of banks in order to direct this mechanism for the sake of common good and political and social sustainability. As has been done, after 1929, in various countries, from Roosevelt’s United States to Mussolini’s Italy.
Exogenous banks are no longer considered to have a role to play in the actual reality of their actual functioning, which reflects the endogenous nature of the currency.
Any attempt, such as the monetarist attempt to control the quantity of legal money, has always been solved in disasters, precisely because businesses and families resort to other quasi-monetary means of payment.
By failing to achieve its goals, monetarism has essentially promoted the self-referential liberalization of non-state finance and paved the way for financial globalization.
Central banks must coordinate with governments.
The error of absolute autonomy for the issuing institutions and that of having built the European Union around a central bank that responds to an ordoliberal deficit approach.
Banks – Central Bank – quasi-banking currency – exogenous currency – endogenous currency – – Maurice Allais – Irving Fisher – Nicholas Kaldor
Number of pages: 17
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