Financial derivatives and the theory of money

Financial derivatives are used and counted as money, but it is unclear exactly what sort of money they are. This article explores the monetary role of financial derivatives in securing the global financial system. It finds that derivatives commensurate the values of different forms of financial asse...

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Bibliographic Details
Published in:Economy and society 2007-02, Vol.36 (1), p.134-158
Main Authors: Bryan, Dick, Rafferty, Michael
Format: Article
Language:English
Subjects:
Capital expenditure
Capital transfers
commensuration
Commodities
Commodity money
Derivatives
Economic power
Economic sociology
Economics
Exchange (Economics)
Finance
Financial analysis
financial derivatives
General studies. Economic systems
International finance
Liquidity
Marx
Marx, Karl
Monetary models
Monetary theory
Money
Money and credit
Quantity theory of money
Risk
Risk management
Social policy
Sociology
Sociology of economy and development
Studies
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Summary:Financial derivatives are used and counted as money, but it is unclear exactly what sort of money they are. This article explores the monetary role of financial derivatives in securing the global financial system. It finds that derivatives commensurate the values of different forms of financial assets, and, in the process, they facilitate continuity across different forms of money. In this role they are a form of commodity money, but very different from conventional understandings of commodity money. In developing this idea, the paper engages recent debates in Economy and Society about the nature of money. In particular, it takes issue with Ingham's state theory of money, which cannot adequately engage exchange rate volatility and extra-national roles of money, and Lapavitsas' approach to a Marxist theory of money, which relegates commodity money to a historical abstraction.
ISSN:0308-5147
1469-5766
DOI:10.1080/03085140601089861