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This introductory chapter briefly considers the ways in which the reforms of Finance Minister Matsukata Masayoshi unfolded along the lines of mid-nineteenth-century British-style orthodoxy or the late-twentieth-century International Monetary Fund version. It then goes on to argue that Matsukata was dealing with the challenge, shared by many of his contemporaries, of establishing a modern financial system in a developing state emerging from warfare and aiming to industrialize. At least on monetary policy, his economic nationalism was of the liberal nationalist variety like that of state leaders in other late industrializers. Moreover, Matsukata emerged as a practitioner primarily of unorthodox policies from the standpoint of both nineteenth- and late-twentieth-century versions of financial and economic orthodoxy. He also departed from orthodox mindsets in his pursuit of statist and nationalist priorities, his commitment to made-in-Japan solutions, his reliance on local intellectual tradition, and his willingness to be flexible in response to “the dictates of practical expediency,” as he would proclaim in 1886.

This chapter looks at the experiences and ideas that influenced Matsukata both in his commitment to aspects of mid-nineteenth-century British economic orthodoxy and in his predilection for unorthodox policies on certain issues. A widely held view is that, as finance czar, Matsukata rigidly applied the theories of orthodox finance he had learned from French economists during the nine-month trip he took to Europe in 1878. Some historians likewise claim that French scholarship and example provided the overall pattern for the Matsukata reforms of the 1880s. For the most part, however, French tutelage simply reinforced ideas that Matsukata had been developing since the Restoration, drawing on both Sino-Japanese and Western sources, ideas that he would go on to implement pragmatically after 1881. Matsukata and his brain trust had no single model for financial reform; rather, they participated in a global circulation of ideas and practices regarding public finance, including currents not only of Franco-British liberalism but also of German and U.S. economic nationalism.

This introductory chapter briefly explores how macroeconomic reforms helped developing nations during the global financial crisis. It notes how these reforms were important to the success of some developing countries like Brazil, and that macroeconomic failings were basic to the extreme suffering of some economies, like that of Greece. The long boom that preceded the 2008 crash was a period when economic orthodoxy was strong and centered on the building of models often expressed in elegant mathematics but with little purchase on real-world problems of economic development. Orthodox policy advice was flouted by some developing countries, perhaps most prominently and successfully by China. Distinguishing what actual policies helped those countries is crucial, for not everyone experienced development. Among many factors however, two stand out: the implementation by strong states of policies favoring national economic development, not just international capital, and the development of materially productive industries.

The conclusion reflects on how the IMF’s post-crash rethink has sought to alter the contours of ‘sound’ economic policy. It reflects on the implications of the argument of the book as a whole about malleability of economic orthodoxy. It considers the scope and limits of the IMF authority in its dealings with advanced economies and how this authority can be constrained. Recalling the key role played in the social construction of economic orthodoxy by authoritative voices like the IMF, it considers the potential for advancing new research agendas in ideational political economy, the study of international organizations, and the politics of austerity.

This chapter summarizes the case for considering money as a legal institution. The Western liberal tradition, represented here by John Locke’s iconic account of money, describes money as an item that emerged from barter before the state existed. Considered as an historical practice, money is instead a method of representing and moving resources within a group. It is a way of entailing or fixing material value in a standard that gains currency because of the unique cash services it provides. The evidence to that end comes from coin itself, the practice of free-minting, judicial commentary, and academic theorizing. As the second half of the chapter details, the relationships that make money work are matters of governance carried out in law. Thus law defines public debt, allocates authority to create money, and determines what counts as a ‘commodity’. Comparing medieval, early American, and modern money law on money demonstrates the dramatic importance of that legal engineering.