Quantitative Easing and the fetishized emergence of ‘world money’ in the 21st century

Quantitative Easing – treated with skepticism when used by the Bank of Japan from 2001-2006 – has become the policy tool of choice for the U.S. Federal Reserve. Trillions of dollars worth of debt in various forms have been moved from the books of financial institutions to those of the Federal Reserve in effect by “printing money” (although in fact all transactions are electronic). This aggressive increase in the supply of money in the world’s biggest economy has been in response to the very severe recession of 2008-2009. This paper will examine this 21st century policy development by deploying the concept of “world money” (sometimes translated as “universal money” or “money of the world”) developed by Karl Marx in the first volume of Capital. Marx speculated about conditions where money might acquire “to the full extent the character of the commodity whose bodily form is also the immediate social incarnation of human labour in the abstract.” (Marx, 1996, p. 153) Quantitative Easing, it will be argued, is a) only possible when a currency already partially contains the characteristics of “world money” and b) is the latest in a series of phases of the attempt by the greenback to solidify its claim to “world money.” However, because this process is unfolding in a “fetishized” fashion – driven by private property, corporate power and inter-state competition – it is rife with contradictions, and can have the effect of increasing, rather than decreasing economic instability