Learning Structuralism and Realism through Money (Commodity Money / Credit Money)

A simple, money‑based entry to modern philosophy: structuralism vs. realism

Anything that can be framed in realist terms can also be recast in structuralist terms. The quickest way to see this is to actually do it. “Money” is an excellent case study and drill. Concretely, we can treat commodity money as realist, and credit money as structuralist. Understanding money more deeply also raises your money literacy, so the exercise is practical.

In practice, money contains both realist and structuralist aspects. Sometimes it’s more useful to treat it as a thing (realist), and other times as a relational structure (structuralist). A rule of thumb:

• When you handle money as a physical object (coins, bullion), a realist lens is convenient.
• When you view money through finance, intermediation, or double‑entry ledgers, a structuralist lens is often clearer.

Commodity money (e.g., gold/silver coins that carry value in themselves) maps cleanly to realism. Credit money (scriptural/deposit money created on central‑bank and bank ledgers via credit creation) maps cleanly to structuralism. Convertible money sits in between, historically bridging the two. Crypto‑assets add a newer layer. In this sense, the monetary system is stratified like geological layers.

Form vs. Function: Looking at the form (thingness, shape) is a realist stance; looking at function (roles, relations, interactions) is a structuralist stance. The aim here is not scholasticism but usable philosophy for daily life and work.

A (very) brief history of money

Early money used useful, intrinsically valuable objects: metals such as gold/silver/copper, shells, even large stones (e.g., Yap). Such money is called commodity money; it’s basically monetized barter.

Physical cash is handy but cumbersome for large transactions. Hence instruments of credit (checks, bills) and eventually paper money emerged. A common story: goldsmiths with vaults stored other people’s coins and issued receipts; those receipts became transferable and thus circulated as money. Lending could be done by issuing receipts rather than handing out heavy coins. In short, the goldsmith is a forerunner of the bank.

Money and double‑entry bookkeeping

In today’s economies, most money is deposit/scriptural money, not cash. That money exists primarily as entries on balance sheets. Running such a system practically requires double‑entry bookkeeping: every debit has a matching credit, preserving the identity Assets = Liabilities + Equity.

A stylized loan origination at a bank:

Assets (Debit) | Liabilities (Credit)

————————-+———————

Loans +100,000,000 | Deposits +100,000,000

The loan creates a deposit simultaneously—purely as ledger entries. Most uses and repayments occur by transfer, not by handing over bags of cash. The medium is formal and functional rather than a physical substance; hence credit money is structuralist in nature. (Cash and credit money together are also “fiduciary/credit money”.)

Seigniorage: The cost of producing cash is unrelated to its face value. Minting a 500‑yen coin may cost roughly a fraction of its face value; producing a 1‑yen coin may even be a fiscal loss. The profit (or loss) to the issuer is seigniorage; but crucially, the value of money does not come from its production cost—it comes from acceptance/credence.

Credit creation

Monetary regimes differ across eras and countries. Post‑war arrangements (Bretton Woods) contrasted with socialist planning; later we saw the end of gold convertibility, the petro‑dollar, global payments networks, and today’s multi‑polar drift. Regardless of regime, lending creates deposits: granting a loan simultaneously brings a claim and a liability into existence—credit is created.

In modern systems, central banks supply reserves to banks; banks extend credit to firms and households. Historically, multiple private issuers coexisted; central banks emerged to stabilize and coordinate. The central bank acts as lender of last resort in crises, but in normal times adjusts the initial conditions (policy rate, balance‑sheet operations).

Base money, money supply, and the (credit/ money) multiplier

Central bank operations expand base money (monetary base). As banks lend and customers pay/receive, deposits circulate across banks; the total money supply (broad money) grows beyond the base. This expansion is often described via the money/credit multiplier—while in practice it depends on capital, regulation, risk, and demand. The key point: most money is created inside the banking system as credit, recorded on ledgers.

Moral unease—“re‑lending what you borrowed”, “what if everyone withdraws at once?”—is old. Systems therefore rely on statistics (law of large numbers), prudential rules, and a backstop (lender of last resort). If you abolish the formal system, shadow banking tends to re‑emerge.

Philosophically, credit money is not a “mere illusion”. In Buddhist terms, it resembles śūnyatā (emptiness); in modern theory, a simulacrum/simulation—not pejoratively, but as effective form: created from “nothing”, cleared back to “nothing” at the apex ledger, yet doing real work in between.

Post‑structuralism and money

The neat dichotomy—“commodity money = realism / credit money = structuralism”—is a useful pedagogy, not a prison. You can also treat commodity money structurally (its value exceeds metal content depending on relations and conventions), and you can handle credit money in realist fashion in everyday practice (people reify balances as if they were tangible).

Money as stratigraphy

Following Foucault’s “archaeology of knowledge”, money too shows strata. Older layers do not vanish; they persist alongside newer ones. Commemorative gold coins still exist; crypto has added a fresh layer. Institutions—like theories—are reworked over time. We may be moving from a single key‑currency to multiple monetary poles, or someday to something like Keynes’s International Clearing Union—or to something shaped by AI and new geopolitics. The future is open.

Conclusion

Using credit money illustrates structuralist reconstruction: akin to Hilbert’s axiomatization—systems can be rebuilt from undefined terms and relations regardless of whether the primitives “exist” physically. Modern pedagogy in many fields is structuralist by default; teaching the historical realist layer is valuable, but structuralizing the theory is essential. For the foreseeable future, structuralism (and post‑structuralism)—alongside money/ICT/English literacy—will remain practically useful.