The management of money is always and everywhere political: for every policy choice, there is an alternative that some actors would prefer. The contemporary salience of enormous and influential financial markets has obscured this immutable political reality, by leaving the impression that market forces transcend politics, and render political conflicts moot. Since market forces impose the 'best practice' on states, policies are chosen by the force of economic logic rather than by politics and the winners and losers must fall where they may. But this is an illusion, albeit a powerful illusion, a consequence of the distinct and crucial role that ideas and beliefs play in the monetary arena: what people think about money, right or wrong, can create self-fulfilling prophecies. In fact, economic theory is indeterminate in its ability to account for most monetary policy choices. Even in a world of globalized finance, the difference between many plausible policies is of ambiguous, or, at most, modest economic effect. Economic logic does limit the range of policy choices to a plausible set. But the choice from that set is inevitably determined by the inescapable politics of money.
