Money, its functions and the moral limits of their re-design

Abstract

If money is used in a market setting, and if it fulfils its three traditional functions well, this creates normative problems. Arguably, the two most pressing problems linked to markets – inequality and corruption – are partly caused by the prevailing monetary design. Given the history of suggested monetary reforms, one might reasonably hope that, by consciously re-designing the functions of a currency, one might overcome these issues. This essay argues that there are clear moral limits to this. Because of the way inequality and corruption are intertwined via money’s functions, we cannot simultaneously overcome both problems. This also means that even though these problems have monetary causes, they do not have purely monetary solutions, but need to be addressed relying on fiscal or market reform as well.