View Original - Middle East Technical University

Strictly inflationary or disinflationary forms of financial crisis should not, thereby, be
a subterfuge for otherwise social and political patterns of credit
decentralisation/centralisation in monetary economies. As such, fractionated or
homogenous monetary systems are plain ideal categories; and are indelibly
counterfactual in terms of the monetary history of capitalist economies. In fact,
financial crises are not about the degree of inflation or disinflation in a monetary
system but about the politics of debt through which inflationist or disinflationist
design of monetary restructuring vis-a-vis the disproportionalities of capitalist
production politically institute either a crisis fix or a vicious cycle, which would not,
however, in the meantime rescind the monetary form of realisation. Paramount to
such a theory of money, is exactly an analysis of those vicious cycles and exits from
crises since both debtor-led and creditor-led restructuring of credit, though these are
de novo theoretically indeterminate political strategies, can anticipate a de-centering
of money solidarity in a bourgeouis economy. In these terms, an inflationary
monetary crisis is an upshot of debtor-led centralisation of credit; that is, each
commodity would earn its monetary counterpart regardless of the proverbial
realisation of surplus value. Here money is no longer invidious; it is a mundane and
lenient asset. Yet, in a credit hierarchy, such restructuring is always piecemeal and
partial. In fact, John Grahl notes that ‘crisis is seen as running through distinct phases
with differing macroeconomic characteristics’(2000:296). In a vicious cycle of such
inflationary centralisation, first abating element, for regulationists and contra
quantitativists, would be money as a ‘unit of account’, then money as ‘store of value’,
and finally money as intermediary of trade.
Sign of deflationary crisis, on the other hand, is a creditor-led decentralisation of
credit. This time, financing and debt-rescheduling are much more horizontal at the
level of the enterprise and each of those routines is less and less negotiable because
commercial financial institutions are already reluctant towards inflationist/vertical
antevalidation of commodity values. In monetary economies in which each unit is
more or less a part of the borrowing/funding network, disinflationary strategy plans
for an incomeless or a money-tight economy. Recessionary consequences of such a
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