The decline of money politics, 1879-1933

The institution of money is an important mechanism for the redistribution of wealth in modern capitalist political economies. In 19 th century America, disputes over the nature and functions of money were a recurrent feature of national politics. In contrast, by the 20 th century, monetary questions faded from public consciousness. Given the inherently redistributive features of monetary systems, why have political disputes over the nature and function of money disappeared from public life? This study argues that such monetary disputes have disappeared not because the underlying conflicts have been resolved, but because of changes in the structural conditions of money's existence. This disappearance was not a contingent event, but an aspect of larger processes of social modernization. Since the late 19th century, changes in the institutions and ideas of money have transformed broad political questions about money into more restricted technical problems of policy management.;To trace the changing political significance of money, this study focuses on American financial developments between 1879 and 1933. During these years, conflict over money reached a high point with the election of 1896, only to tail off during the Progressive Era. Over the entire period, three structural developments in the nature and functions of money took place. The nature of money shifted from concrete substance to abstract purchasing power; the locus of money politics shifted away from issues of definition to issues of control; and monetary practices became increasingly embedded in financial institutions. These developments interacted in such a way as to reduce the significance of money within the financial system, and to replace money questions with credit questions on the public agenda. These changes closed off monetary ways of understanding redistributive conflicts within the political economy.;As an aspect of modernization, these changes in the structural conditions of money's existence adapted money to the requirements of large-scale technological systems. The stability of modem life entails in particular a shift away from personalistic relations of social trust and towards a trust in technological systems. The institution of money has participated in this shift towards system trust to the extent that trust in the stability of monetary order rests upon the reflexive properties of monetary liquidity, rather than upon trust in the readiness of transactors to redeem their liabilities with precious metal. Indeed, modern money is functionally adapted to the welfare state in the sense that the social construction of money's value as a statistical aggregate corresponds to efforts by the welfare state to socialize the costs of modern life through the exercise of the state's regulatory powers.