The idea that "the stock of money" is a real, objective thing is rank insanity. The idea that this "stock of money" should magically be constant makes even less sense.
There is no stock of money. There are only political decisions, assorted client and patron relationships, and national and international conflicts among interest groups that define social goals and resource distribution.
Money is political power counted on imaginary tally sticks. Volume fluctuations are irrelevant. What matters is what people do, for whom, to what end, using what resources.
In an alleged democracy what should matter is economic enfranchisement - which in practice means creating fluid and porous social castes and interest groups, and inventing interesting goals with intelligence, realism, and effectiveness.
Booms and busts are caused by aimless short-term accumulation, which is a form of unintelligent goal setting. Whether tally sticks are referenced to lumps of shiny metal or numbers derived by fiat is wholly irrelevant if the only goal is to acquire as many sticks as possible, and nothing else matters.
First sentence: True - and neglected in our time, but not, I think by the originator of the concept. He did set a lot of store by "animal spirits," and these very strongly affect "the money supply" in the following ways:
The usual multiplier of funds in a bank assumes that the depositors will regard their banked money as still theirs and available. But note that this is actually the OPPOSITE of the thinking of my grandparents, who lived through the great depression. To them, the largest single reason to put money in a bank was precisely to forget about it; and to piously treat it as now beyond their reach and ability to spend because it was now part of a sacred reserve. A very deflationary logic since it brings down the effective banking multiplier of the money supply (reflected by spending) sharply. And this is indeed what happens after a recession, and a kind of thinking that's still with us, post 2008.
Of course, changes in sexual selection are also a large part of this. Young women and men shifted from being very interested in free spenders of the opposite sex (as a proof of money) before 2008 to being much less interested in being married to a free spender, thanks. Where I live, I was woken by revelers in the early morning leaving the fanciest downtown bars blocks away until 2008 at least a couple of times a week, for years. In all the years since that crisis, those extreme revelers have only very rarely been heard from by me. Despite my being a much less sound sleeper, now. Here too, sexual selection shifts post-crisis to a logic that's closer to bank-it-and-don't-think-about-it. (Debt accumulation, say on credit cards, may contradict me by now, however.)
Just curious: is this coming from stuff you've read or original thought? Because what you just said feels much closer to the truth than anything I heard in my macroeconomics 101 class. But I'm not an economist, so.
There is no stock of money. There are only political decisions, assorted client and patron relationships, and national and international conflicts among interest groups that define social goals and resource distribution.
Money is political power counted on imaginary tally sticks. Volume fluctuations are irrelevant. What matters is what people do, for whom, to what end, using what resources.
In an alleged democracy what should matter is economic enfranchisement - which in practice means creating fluid and porous social castes and interest groups, and inventing interesting goals with intelligence, realism, and effectiveness.
Booms and busts are caused by aimless short-term accumulation, which is a form of unintelligent goal setting. Whether tally sticks are referenced to lumps of shiny metal or numbers derived by fiat is wholly irrelevant if the only goal is to acquire as many sticks as possible, and nothing else matters.