Money: Through Different Lens

Israel Mendez
Writing 2
Feb 21, 2024
 1

The concept of money serves as a fundamental pillar in both economic and social science

discourse, yet each discipline approaches it with distinct methodologies, perspectives, and

objectives. Aiming to distinguish the different perspectives that the social sciences and

economics have on the subject of money by analyzing two articles, "Money Runs" by Jason

Donaldson representing the economics sector and "Money: Ontology and Deception" by John

Searle representing the social science sector. The economic article shows money through a

critical thinking, graphical evidence, and data lens. On the contrary, social science uses logical

thinking, argumentative analysis, and historical background lens to teach money. Having the

ability to clarify the different approaches and concepts present in the economic and social

research by closely examining the data, claims, and methods used in each article.

Informed by the principles of maximizing personal satisfaction and rational choice

theory, Donaldson's article "Money Runs'' captures the essence of economic analysis. Donaldson

explores the processes by which money moves resources, enables economic transactions, and

shapes human behavior using both evidence and mathematical models. For instance, Donaldson

explains to us the banking structure and the way money moves, “Banks choose to fund

themselves with demandable debt to take advantage of a “price effect of demandability”:

demandable debt trades at a high price in the secondary market, and hence decreases banks’ cost

of funding in the primary market”.1 The author explains the process of banking using evidence

and critical thinking. He gives us the process in which money travels, while explaining why they

do it. Discussing the benefit that the bank gets from it. Donaldson shows us the work behind

buying and selling, and why people make certain money decisions. His article is special because

the economic stance carried using real numbers and data to explain the market. Economic studies

1 Jason R. Donaldson and Giorgia Piacentino,“Money Runs,” Journal of monetary economics 126 (March): 35–57.
https://www.sciencedirect.com/science/article/abs/pii/S0304393221001343
 2

use math, statistics, and special methods like econometrics to back up their ideas and theories

which is very different to social science. Regression analysis and economic modeling are used by

Donaldson in "Money Runs" to show how the money supply, inflation, and economic growth are

related. By utilizing statistical data to support his claims, Donaldson follows the positivist

approach in economics, which means being able to prove ideas wrong and confirming them with

real data.2 He clarifies how people manage their finances, make investments, and make

consumption and consuming decisions based on rational self-interest, contrasting the logical

thinking carried in social science. Through the lens of utility maximization, Donaldson also

discusses the significance of money as a store of value, a unit of account, and a medium of

exchange, emphasizing its vital role in encouraging the distribution of resources and economic

interactions in a market economy.

The article, "Money: Ontology and Deception" by John Searle, explores money through

social science using a philosophical and interpretive lens. Which stands in complete contrast to

the numeric and positivist methodology of economics. To understand what money really is,

Searle looks at how people create it, what ideas support it, and what it represents in society. In

order to understand the complexity of money as a social institution, Searle moves away from the

rational choice of thinking in economics and looks at how language, communication, and shared

intentions between people affect things.3 The idea of "status function," according to which the

legitimacy and power of money come from agreement and recognition within a social and

cultural context, is fundamental to Searle's argument. In contrast to the inherent worth that

economic language attributes to money, Searle argues that the value of money is socially

produced through linguistic acts and structural conventions. Using speech act theory and the

2 Jason R. Donaldson and Giorgia Piacentino, “Money Runs,” 7.

3 John R. Searle, “Money: Ontology and Deception.” Cambridge Journal of Economics 41, no. 5.
10.1093/cje/bex034 https://academic.oup.com/cje/article/41/5/1453/4096478?login=true
 3

philosophy of language, Searle explains how performative acts like signing a check or issuing

currency give money an ontological existence that gives it power and economic significance.

Moreover, Searne explains the background of money “The point is that something might

gradually evolve as money through general acceptance. The point, however, is that it will turn

out that some assignment of status function is essential to performing the functions of money.” 4

Through a logical thinking perspective used in social science, he is able to explain the reality of

money. How money doesn't actually have value, the only reason it's worth something is because

we give it value. The dollar is not backed by gold like in the 1930s, now it's just a piece of paper.

He is explaining money in a detailed and realistic way, through a philosophical lens.

Furthermore, Searle looks at how lies and trickery help create and maintain money systems.

According to his theory, money affects social reality in a tangible and significant way even if it is

a collective illusion based on customs and shared beliefs.5 By exposing the basic conflict

between fiction and reality in the realm of money, Searle challenges the limiting economic

worldview that prioritizes material incentives and utility maximization.

The contrast between Jason Roderick Donaldson "Money Runs" and John R. Searle's

"Money: Ontology and Deception" offers a look at the many approaches and viewpoints used in

the social and economic sciences regarding money. With a foundation in economics, Donaldson's

work maintains an optimistic stance, prioritizing individual value maximization and statistical

analysis. He explores the rationality and efficiency aspects of economic activity with the goal of

using these viewpoints to understand financial events. In "Money Runs," for example,

Donaldson examines how the financial system functions effectively, enables transactions and

distributes resources in the best possible way. He frequently backs up his claims with statistical

4 John R. Searle, “Money: Ontology and Deception,” 8.

5 John R. Searle, “Money: Ontology and Deception,” 8.
 4

evidence and real-world examples. However, by emphasizing the philosophical nature of money

and the part that language and communication play in its formation, Searle's argument in

"Money: Ontology and Deception" goes beyond the bounds of traditional economic analysis. In

his exploration of the subjective world, Searle highlights the role that shared meanings and

collective intentionality play in forming an understanding of money. He points out situations

where fraud and dishonesty are used to support monetary institutions, for example, while

discussing how linguistic agreements and social conventions are important in determining the

worth and legitimacy of money. Moreover, the distinct methodologies of economics and social

sciences are evidence of their unique fundamental dedications and philosophical theories.

Economists look for economic laws and regularities governing financial events, emphasizing

deductive reasoning, mathematical modeling, and observational confirmation. On the other hand,

social scientists use argumentative criticism, interpretive analysis, and qualitative research to

figure out the complex social and cultural processes that characterize monetary systems. For

example, social scientists may look at how cultural norms and power structures affect the

distribution of wealth and access to financial resources, while economists may concentrate on

examining market dynamics and individual preferences to explain moves in currency exchange

rates. All things considered, the comparison of "Money Runs" and "Money: Ontology and

Deception" highlights how diverse the study of money is and how much can be learned by

looking at it through a variety of theoretical and methodological perspectives. Through a

combination of viewpoints from social sciences and economics, scholars can acquire a more

thorough knowledge of the complex nature of money and its significant effects on human

behavior and society.

 5

To further compare both articles, their respective disciplines present themselves with a

difference in structure and organization of the article. While evaluating Donaldson's "Money

Runs." The article follows a structured format consisting of an abstract, introduction, six

chapters, and a conclusion. Each chapter is further broken down into subchapters, each clearly

labeled to indicate its content, such as "2.3. Secondary Debt Market: Entry, Bargaining, and

Settlement."6 The author does this so its readers are able to go back and relook at the information

they want to review without reading the whole book.The intended audience consists of

individuals seeking to grasp concepts related to banking, secondary markets, and bank debt,

among others. We can also discuss the tone of the article, which is highly educational and direct,

with occasional appearance of economic language that remains accessible to the reader. In

contrast, Searle's "Money: Ontology and Deception" adopts a similar organizational approach

with an abstract, seven chapters with descriptive subheadings, and a bibliography. The reason

being that they are both educational articles. The chapters are structured into concise paragraphs,

facilitating comprehension for the reader. The target audience is anyone interested in looking

into the intricacies of money and its sociological implications. Which is completely different

from Donaldson, considering the fact they cover the same topic which is money. Searle's article

avoids jargon, ensuring that its content is readily understandable to a broad English-speaking

audience. When it does include jargon it does a good job of explaining what the respective

language means. In the complete opposite of Donaldson, who just expects you to know the

economic language.

In the end, the contrast between "Money Runs" and "Money: Ontology and Deception"

highlights the different approaches and viewpoints that the social sciences and economics take

when studying money. Social sciences place a greater emphasis on interpretation, cultural

6 Jason R. Donaldson and Giorgia Piacentino, “Money Runs,” 5.

 6

context, and argumentative criticism, while economics tends to favor efficiency, logical decision-

making, and data confirmation. The social sciences investigate how money is infused with

meaning through shared judgment and is rooted in social structures, looking into its

psychological and cultural aspects. In contrast, economics studies the quantitative features of

money, including its use as a store of value, a unit of account, and a medium of exchange. To

explain economic phenomena, economists frequently use statistical analysis and mathematical

models. We may comprehend the complex nature of money and its role in influencing society

dynamics and human behavior more fully when we acknowledge the differences between the

methods used by the social sciences and economics. Furthermore, recognizing the distinctive

approaches and underlying philosophies of each field promotes interdisciplinary communication

and collaboration while allowing us to recognize the variety of intellectual perspectives within

the study of money.

 7

References

Donaldson, Jason R., and Giorgia Piacentino. 2022. “Money Runs.” Journal of monetary

economics 126 (March): 35–57.

https://www.sciencedirect.com/science/article/abs/pii/S0304393221001343

Searle, John R. 2017. “Money: Ontology and Deception.” Cambridge Journal of Economics 41,

no. 5. 10.1093/cje/bex034

https://academic.oup.com/cje/article/41/5/1453/4096478?login=true