What kind of calculation is implied in the money rate of interest?

With the legitimization of interest on loans, money ceases to be merely a measure for economic calculation and exchange, and is made itself the object of exchange and calculation. However, the possibility of lending money on interest rests upon certain institutional assumptions that are implicit in economic practice and that tend to remain invisible even to economic theory. A crucial aspect of Keynes’s thought was to shed light on those assumptions, showing that the exchange of money against credit has to be remunerated by a rate of interest only insofar as money is conceived and established as the peculiar type of asset that protects its holder from all kind of event, calculable and incalculable. In this perspective, interest is not simply the result of a calculation of probability, concerning the repayment of a credit or the remuneration of the investments that it makes possible, but rather mirrors the degree of (mis)confidence in that calculation. This paper considers the implications of this concept of money and interest for the functioning of modern financial systems and their crises, and considers Keynes’s reform proposals as a way to establish a different form of money and finance, not implying anything like an interest on loans.