Abstract

Spinoza’s philosophy contains a theory of money very different from that in the economics textbooks, which treat money as an instrument of voluntary exchange. This is because his theory of desire rules it highly unlikely that agents should enter into voluntary exchanges at all. What appears to be voluntary exchange is really something else: a type of retaliatory expropriation, in which money plays a crucial pacifying role. Spinoza warns that money can, however, fail in this function if it becomes an object desired for its own sake. A general decline in prices across Europe beginning in the 1660s probably informed this opinion.