Kamala Trump
Verified User
we argue in this special issue that there is a ‘double movement’ unfolding across history where with every entanglement between states and markets promoted by central banks, central banks also engage in attempts at disentanglement in which they draw new lines between states and markets in their endeavour to uphold liberal principles of limited government. In other words, infrastructures are a site of active contestation where the state-economy boundary is continually transformed, in turn provoking new boundary work by central banks as they attempt to find ways to keep the economy afloat without bringing about autarkic central bank planning of the economy.
We develop the point in the following section, which presents the outlines of a new history of central banking attentive to this dialectical dynamic of entanglement and boundary drawing. While serving to introduce the papers in the special issue, concentrated in the latter half of the twentieth century and in the early twenty-first century, our historical overview provides additional context by taking the reader back to the early modern origins of central banking through to the post-financial crisis emergence of central banking as ‘the only game in town’ (El-Erian, Citation2016). We now turn to how sustaining boundaries between state and economy, both real and imagined, has been at the heart of central banks’ evolving practices and the dialogues that frame their activities in public life.
A new historical sociology of central banking
The foundation of modern central banks from the fifteenth century onwards was from the start accompanied by debates about their potential contributions to the economic order,Footnote7 ranging from the expansion of the money supply, to the fight against financial instability, to the financing of the state, all acknowledging the hybrid nature of these institutions (Desan, Citation2015). Such reflections justified the founding of the Bank of England in 1694 (seen by many as the first fully fledged modern central bank, Capie et al., Citation1994), which doubled the money supply and eased the financing needs of the king, who was at the time fighting the Dutch and the French. The Bank’s founding thus cemented a ‘memorable alliance of financiers and the state’ (Weber, Citation1981, p. 280) in an initially tenuous political compromise between the two competing political factions, the Whigs and the Tories and their respective economic interests (Carruthers, Citation1996). That fusion of public and private power gave a clear advantage to the British Empire against its continental rivals. By linking the king as the largest debtor to the credit-granting bourgeoisie, the foundation of the Bank permitted the establishment of state-backed credit money, which was both more flexible than coinage-based state money and more stable than private credit (Ingham, Citation2004).
https://www.tandfonline.com/doi/full/10.1080/03085147.2022.2118450
We develop the point in the following section, which presents the outlines of a new history of central banking attentive to this dialectical dynamic of entanglement and boundary drawing. While serving to introduce the papers in the special issue, concentrated in the latter half of the twentieth century and in the early twenty-first century, our historical overview provides additional context by taking the reader back to the early modern origins of central banking through to the post-financial crisis emergence of central banking as ‘the only game in town’ (El-Erian, Citation2016). We now turn to how sustaining boundaries between state and economy, both real and imagined, has been at the heart of central banks’ evolving practices and the dialogues that frame their activities in public life.
A new historical sociology of central banking
The foundation of modern central banks from the fifteenth century onwards was from the start accompanied by debates about their potential contributions to the economic order,Footnote7 ranging from the expansion of the money supply, to the fight against financial instability, to the financing of the state, all acknowledging the hybrid nature of these institutions (Desan, Citation2015). Such reflections justified the founding of the Bank of England in 1694 (seen by many as the first fully fledged modern central bank, Capie et al., Citation1994), which doubled the money supply and eased the financing needs of the king, who was at the time fighting the Dutch and the French. The Bank’s founding thus cemented a ‘memorable alliance of financiers and the state’ (Weber, Citation1981, p. 280) in an initially tenuous political compromise between the two competing political factions, the Whigs and the Tories and their respective economic interests (Carruthers, Citation1996). That fusion of public and private power gave a clear advantage to the British Empire against its continental rivals. By linking the king as the largest debtor to the credit-granting bourgeoisie, the foundation of the Bank permitted the establishment of state-backed credit money, which was both more flexible than coinage-based state money and more stable than private credit (Ingham, Citation2004).
https://www.tandfonline.com/doi/full/10.1080/03085147.2022.2118450