The Peculiarity of Money

  • Stephen Rousseas


One of the basic assumptions of Post Keynesian monetary theory is that we live in a world of uncertainty. A second assumption, implied by the first, is that all events take place in historical time. Historical time, furthermore, is seen as being irreversible. We do not have the luxury of doing something and, not liking the way it turns out, ask that we be allowed to start all over again, wiping out all the vestiges and consequences of our first try. Decisions to act, once implemented, tend to unfold along lines we do not expect. Commitments, in other words, are not easily undone and they are invariably undertaken in a penumbra of indeterminateness. They have a way of starting a chain of events that have an element of surprise in them. We are, consequently, forever trapped in the present, in a historically contingent world in which the future is largely unknown and unforeseeable. The only thing we can say with any assurance is that the future unfolding of events cannot be predicted, that what we expect to happen will most likely not happen. Being so, we must always be in the process of adapting our strategies to changing circumstances, again without any guarantee that our new-laid plans will work out any better than before; and so on ad infinitum as a new train of events unfolds conditioned by our newly developed responses to the unpredictable events occurring in an ever-shifting present.


Interest Rate Monetary Policy Cash Flow Money Supply Hedge Financing 
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Notes and References

  1. 1.
    Paul Fayerabend, Against Method ( New Jersey: Humanities Press, 1975 ), pp. 17–28.Google Scholar
  2. 4.
    See G. L. S. Shackle, The Years of High Theory ( London: Cambridge University Press, 1967 ).Google Scholar
  3. 7.
    Davidson, Money and the Real World, and Paul Davidson and J. A. Kregel,’Keynes’s Paradigm: A Theoretical Framework for Monetary Analysis,’ in Edward J. Nell, ed., Growth, Profits and Property, Ch. 8 ( New York: Cambridge University Press, 1980 ).Google Scholar
  4. 8.
    A. C. Pigou, Keynes’ General Theory: A Retrospect ( London: Macmillan, 1950 ), p. 63.Google Scholar
  5. 9.
    John Maynard Keynes, The General Theory of Employment Interest and Money ( New York: Harcourt Brace, 1936 ), p. 216.Google Scholar
  6. 12.
    For what follows, see Benjamin Nelson, The Idea of Usury From Tribal Brotherhood to Universal Otherhood ( Princeton: Princeton University Press, 1949 ).Google Scholar
  7. 13.
    For a useful survey of the various attempts to introduce money into modern growth theory, see Jac. J. Sijben, Money and Economic Growth (Leiden: Marilius Nijhoff, 1977), and my review in Kyklos, Fasc. 1, 1978.CrossRefGoogle Scholar
  8. 14.
    See Hyman Minsky, Can ‘It’ Happen Again? ( Armonk, N.Y.: M. E. Sharpe, 1982 ).Google Scholar
  9. 15.
    Paul Samuelson, ‘The General Theory,’ Econometrica, July 1946; reprinted in Robert Lekachman, ed., Keynes’ General Tlieory: Reports of Three Decades ( New York: St Martin’s Press, 1964 ).Google Scholar

Copyright information

© Stephen Rousseas 1998

Authors and Affiliations

  • Stephen Rousseas
    • 1
  1. 1.Vassar CollegeNew YorkUSA

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