Table Of ContentModern Money and the Rise
and Fall of Capitalist Finance
Modern Money and the Rise and Fall of Capitalist Finance examines the true nature
of modern money and seeks ideas for an alternative economic system for a just
society.
This book suggests that adopting the ideas and institutions of a trust allowed
personae to be combined with creditor-debtor relations and, by doing so, led to
the evolution of modern money. This also helps explain why modern banking
arose in England rather than continental Europe, by conceptualizing modern
money as a trust and investigating the inseparable relationship between personae
and modern money, because it is more than creditor-debtor relations—it takes
the form of a trust.
In explaining how the capitalist credit-money economy differs from previous
economies, this book is a significant contribution to the literature on modern
money, heterodox economics, and the philosophy of economics and finance.
Jongchul Kim has critically examined the modern concepts of “person” and
“property” and applied this critique to an understanding of money and finance.
He is currently an associate professor in Sogang University, South Korea.
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Shahzavar Karimzadi
Money and Capital
A Critique of Monetary Thought, the Dollar and Post-Capitalism
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Modern Money and the Rise
and Fall of Capitalist Finance
The Institutionalization of Trusts,
Personae, and Indebtedness
Jongchul Kim
First published 2023
by Routledge
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and by Routledge
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Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 Jongchul Kim
The right of Jongchul Kim to be identified as author of this work has been
asserted in accordance with sections 77 and 78 of the Copyright, Designs
and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
ISBN: 978-0-367-51047-3 (hbk)
ISBN: 978-0-367-51050-3 (pbk)
ISBN: 978-1-003-05221-0 (ebk)
DOI: 10.4324/9781003052210
Typeset in Bembo
by Apex CoVantage, LLC
I am deeply grateful to my parents, Yoo-ho Ja and
Young-gil Kim, and two great teachers, Jonathan
Nitzan and Ted Winslow. Thanks to their help and
advice, I have been able to pursue my own research.
The following chapters in this book reproduce my
prior publications with some revisions.
Chapter 1: Kim, Jongchul. “Money is Rights in Rem:
A Note of the Nature of Money.” Journal of Economic
Issues 48, no. 4 (2014): 1005–1019.
Chapter 3: Kim, Jongchul. “How Modern Banking
Originated: The London Goldsmith Bankers’
Institutionalisation of Trust.” Business History 53, no. 6
(2011): 939–959.
Chapter 4: Kim, Jongchul. “Modern Politics as a Trust
Scheme, and its Relevance to Modern Banking.”
Journal of Economic Issues 47, no. 4 (2013): 807–826.
This work was supported by the Ministry of Education of the
Republic of Korea and the National Research Foundation of
Korea (NRF-2021S1A5A2A01061947)
Contents
List of Figures x
List of Tables xiii
Introduction 1
Persona, Property, Trusts, and Modern Money 1
Money Economy Versus Credit Economy 8
Structure of the Book 10
1 Money and Property 14
1.1. Analogy 17
1.2. Property was Created in the Image of Money 20
2 Person and Property—Mistaken Ideas 26
2.1. Is Locke’s Ontological Formula of “Person-Property” a Case
of the Linguistic Structure of “Subject-Predicate”? 27
2.2. Locke’s Ontological Formula of “Person-Property” Creates
a Peculiar Concept of Ownership Rights 34
2.3. An Analogy between Property, Slavery, and Money 36
2.4. Linear or Recurrent 39
3 The Origin of Modern Money—Modern Money as a Trust 44
3.1. Bills of Exchange and the London Goldsmith Bankers’
Notes 47
3.2. Methods of Maintaining a Fractional Reserve 53
Permanent Indebtedness & Liquidity 54
3.3. The Nature of the London Goldsmith Bankers’
Deposit-Taking 55
Economists’ Understandings of Goldsmith Bankers’
Deposit-Taking 57
3.4. Goldsmith Banking as a Trust 61
viii Contents
3.5. Transforming into the Capitalist Money Economy 66
3.6. Summary 66
4 The Political Economy of Modern Money in Early
Modern Times: Indebted Personae and the Rise
of Modern Money 74
4.1. Modern Banking as a Trust Scheme 75
4.2. Acceptance for the Payment of Tax 76
4.3. Modern Politics as the Constructor of Modern Banking 78
4.4. Modern Politics as a Trust Scheme 81
4.5. Representative Democracy as a Trust 86
4.6. Socialization of Debt 88
5 Shadow Banking in Neoliberalism 94
5.1. Money Market Funds and Propertization 95
5.2. Propertization and the Crisis of 2008 98
6 Person, Property, and Trusts: Revisited 108
6.1. Trusts and the Person-Property Formula 108
6.2. Modern Business Corporations as a Trust 110
The Nature of Shares 110
Social Irresponsibility and Inequality 113
6.3. Quantitative Easing as a Trust 118
7 The Fall of the Neoliberal Form of Finance and Its
Predicaments 131
7.1. The Withering of Private Banking and Finance 134
7.2. The Inflationary Period 139
7.3. Demography and Globalization 143
7.4. Global Inflation 146
7.5. The Privilege of Being the World’s Reserve Currency 148
7.6. Effects of Quantitative Easing 150
7.7. Beggar-Thy-Neighbor and Global Inflation 156
7.8. Genuine Solution? 159
8 What is to be Done?: Cooperative Basic Capital
and the Abolition of the Hybridity 163
8.1. Abolishing the Hybridity 163
8.2. Basic Capital as a New Method of Wealth Redistribution 166
Contemporary Proposals for Basic Capital 169
Basic Capital in Ancient Times 170
Contents ix
Plato’s Klēros 170
Mencius’s Well-Field System 171
Breaking Down the Dichotomy between the Private
and the Public 172
Cooperative Basic Capital 173
Duty to use Productively: Workers’ Cooperatives 173
Distinguishing Unproductive Debts from Productive
Debts 176
Financing Basic Capital: Social Inheritance 177
Index 183
