ABSTRACT
Modern money is legally constituted as claims against banks. The privileged positioning of banks’ balance sheets within the economic realm is a source of political power. This power has been neglected due to the rule of a ‘technical imaginary’ of monetary order. Here, money appears as a universal and hence apolitical tool. Shielded by this imaginary, private banks’ autonomy was strengthened in the second half of the twentieth century. Many governments disarmed their own power to create money through unrestricted access to their own central bank’s balance sheet. Today, this regime is challenged on a theoretical and political level, most prominently by Modern Monetary Theory (MMT). It calls on governments to claim monetary sovereignty and politicise money creation. Governments should embrace the authority to issue claims against themselves via the central bank’s balance sheet as a flexible funding source. This chapter characterises this proposal as a competing imaginary of monetary order. Under this ‘political imaginary’, money itself appears as a practice of public provisioning. While the gain in capacity to act through a reintegration of the central bank into government financing is tempting, the political imaginary is at the same time a burden for the political system.
