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By Frances Hutchinson
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Extra resources for The Politics of Money: Towards Sustainability and Economic Democracy
Example text
Money does not have to exchange for real goods and services in order to maintain its identity as money: money can be exchanged for money and still register as an increase in GNP. g. caring work in the home and community) does not register as an increase in GNP unless artificially construed to do so (Waring, 1989). If people can accumulate money, the circular flow is no longer meaningful. Money ebbs and flows within the economy. People do not always spend. Hoarding is a perfectly rational economic choice.
Individuals should be free to rely upon Why is There No Alternative? 27 the market for the information necessary for decision-taking. The school studies the processes whereby self-interested individuals come to their decisions. Money again plays a purely functional role. The neo-classical and marginalist schools have added to the classical view of the integrated and self-sufficient model of the market an individual actor to populate that market, who is also amenable to abstraction and modelling.
It is therefore important to distinguish between NIE which remains within the framework of orthodox economics and the ‘old institutional economists’ (OIE) such as Thorstein Veblen (1857–1929). The old institutional school rejects the concept of a global science of economics. It takes a holistic and evolutionary view of the economy, which it sees as determining, and in part being determined by, the institutions of society. For example, it does not follow the neoclassical practice of taking wants as ‘given’.