an
international and interdisciplinary journal of postmodern cultural sound, text
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Volume 2, June 2005, ISSN 1552-5112
Notes towards an anthropology of money
Most anthropologists don’t like money and they don’t have much of it. It
symbolises the world they have rejected for something more authentic elsewhere.
It lines them up with the have-nots and against the erosion of cultural
diversity by globalisation. Anthropologists have, as a result, not had much of
theoretical interest to say about money. Rather, they have been limited to
discussing whether primitive valuables are money or not. Thus Malinowski
(1921:13) was adamant that Trobriand kula valuables were not
money in that they did not function as a medium of exchange and standard of
value. But Mauss (1990 [1925]: 100-2n) held out for a broader conception that
goes beyond the kind of money we are familiar with:
On this reasoning ... there has only been money
when precious things ... have been really made into currency - namely have been
inscribed and impersonalised, and detached from any relationship with any legal
entity, whether collective or individual, other than the state that mints them
... One only defines in this way a second type of money - our own.
He suggests that primitive valuables are like money in that they have
purchasing power and this power has a figure set on it.
This was the high point in anthropologists’ discussion of money. Mauss line was
generally not taken up and, thereafter, economic anthropologists used concepts
drawn from Western folk wisdom rather than from economics.1 Parry
and Bloch (1990) show how non-Western peoples incorporate modern money
creatively into their indigenous social practices, but the editors introduction
has nothing to say about money in their own societies, the culture of which
most of us absorb with our mothers milk. This lack of self-consciousness is a
serious handicap. If ethnographic research is to help people understand the
world we live in, we must be more open to studying mainstream modern
institutions and the intellectual history of relevant disciplines outside ours
(Hart 1986). Some individuals have done this, notably Carrier (1994, 1997),
Gregory (1982, 1997) and Gudeman (1986, 2001; Gudeman and Rivera 1990). Chris
Gregory’s Savage money (1997) is an exceptional attempt to frame
ethnographic research within an account of the upheavals in world money since
the 1970s.
Accordingly, I have not attempted here to review the field (see Weatherford
1997), but rather to present four short essays on money drawing partly on a
recent synthetic book (Hart 2001).2 The first of these addresses the
widespread idea, perpetuated by economists among others, that money originates
in barter (see Hart 1987). The second dissects the anthropologists’ own
favourite folk myth about how money undermines traditional cultures. The third
examines why money matters so much for the members of capitalist societies, to
the point of becoming an object of religious devotion. Finally, I present my
own approach to modern money, taking the introduction of the euro as an
example.
The barter origins of money
By now everyone knows where money came from. Our remote ancestors
started swapping things they had too much of and others wanted. This barter ran
into a bottleneck. It was not always easy to find someone who wanted what you had
and had what you wanted in the right quantities. So some objects became valued
as tokens that most people would be willing to hold to swap with something else
in future. It might be salt or ox hides, but some metals were most often used
in this way because they were scarce, attractive, useful, durable, portable and
divisible. The restrictions of barter were lifted as soon as sellers would
regularly accept these money tokens, knowing that they could be exchanged at
any time. The money stuff succeeded because it was the supreme barter item,
valued not only as a commodity in itself, but also as a ready means of
exchange.
This is a myth of course. What does it tell us? That money is a real thing and
a scarce commodity. That it rose to prominence because it was more effective
than existing practice. That it originated in barter, the timeless primitive
form of exchange. What else does it tell us, about society, for instance? Well,
almost nothing. When Adam Smith first told this story he claimed that the wealth
of nations resulted from the slow working out of a deep-seated propensity in
human nature, to truck, barter and exchange one thing for another. He went on:
It is common to all men, and to be found in no
other race of animals, which seem to know neither this nor any other species of
contracts ... Nobody ever saw a dog make a fair and deliberate exchange of one
bone for another with another dog. Nobody ever saw one animal by its gestures
and natural cries signify to another, this is mine, that yours; I am willing to
give this for that (Smith 1961 [1776]: 17).
Smith acknowledged a degree of social complexity in the transactions: the idea
of contract, private property (mine and yours) and equivalence (fairness), none
of which could plausibly be traced to the non-human world. His latter-day
successors have not shown similar modesty, routinely claiming that the markets
of fin de siecle Wall Street are animated by impulses that are not just
eternally human, but shared with the animals too, or at least the primates
(Dunbar 2000: 2-3). Traders are unusual people (Hicks 1969). They own things
they neither made nor will use, but still claim the right to the value of their
sale. They are willing to give up their goods in return for payment; and their
customers then have the right to do what they like with them. This is so
commonplace in our world that we think of it as eternal. It is in fact quite
rare within the range of known human societies. What gives buyer and seller
confidence that they each have exclusive rights to dispose of the commodity?
The power of state law reinforces their contract and usually supports the money
involved. They may operate as isolated individuals only because of the huge
social apparatus backing their exchange.
If trading with money is a special institution, how else have people circulated
objects between themselves? In barter two parties exchange goods taken to be
equivalent; the timing and the quantities must be right; both sides must have
the right to dispose of their goods without involving others; there is a risk
of conflict in haggling. How much simpler to persuade you to give up your goods
in return for money that you can hold for purchases from others in different
times and places. But it is not convincing that such a complicated arrangement
as barter would prevail before people thought of inventing money.
Barter is often found where markets using money prices are ineffective, usually
because of a shortage of liquidity. Thus the Argentineans, in the recent
currency crisis, flocked to barter clubs. People had a fair idea of what their
goods were worth because of the co-existent markets they were too poor to
participate in. In the North American fur trade in the eighteenth century,
which gave Smith his example of primitive barter, the ratio of beaver to deer
skin was broadly set by the world market, but cash was scarce on the frontier.
Nigeria and Brazil, being short of foreign currency, once arranged to barter
oil for manufactures, knowing the price of each on world markets. One of the
fastest-growing sectors of trade today is commercial barter networks, allowing
businesses, for a commission, to swap unsold goods directly between themselves.
Barter does not require faith in any currency or other medium, and it is easy
to conceive of barter as markets without money. What you see is what you get.
More important, it allows trade to continue when the currency is lacking. It is
cumbersome because both sides of the swap have to coincide. Apart from that,
barter resembles normal trading quite closely, especially in its assumptions
about property relations. Perhaps this is what recommended it to the economists
as a possible precursor of markets proper. Apart from the missing money,
everything is business as usual, especially the condition of exclusive private
property in the goods traded. Barter is not much of an alternative then, just
an inferior market mechanism.
I have been struck by the tenacity with which ordinary people cling to the
barter origin myth of money. Can this merely be an example of Keynes' (1936:
383) famous claim that our ideas are nothing more than the echoes of a defunct
economists theory? A Sudanese friend once asserted that the original economic
system of his country was barter between villages; and then, when pushed, he admitted
that these villages had been involved with merchant networks and money for
thousands of years. It would be more plausible to locate the origins of
exchange in the gift, as Mauss (1990 [1925]) suggested. But this would give
priority to a personalised conception of money, seeing markets as a form of
symbolic human activity rather than as the circulation of dissociated objects
between isolated individuals. The general appeal of the barter origin myth is
that it leaves the notion of the private property complex undisturbed.
The impact of money on traditional cultures
Consistent with this vision, every anthropology student knows that money
undermines the integrity of cultures that were hitherto resistant to commerce.
Anthropologists are not very happy in the marketplace and this gives many of
them a jaundiced perspective on money. The American sociologist, Thorstein
Veblen (1957 [1918]) once wrote a book to explain how capitalist societies
could permit the pursuit of truth in their universities. He concluded that the
solution was to persuade academics that they belonged to the elite while paying
them the wages of manual workers. They then compromised themselves pursuing the
additional income needed to maintain a lifestyle they could not afford. Academics
are obsessed with money and loathe it, because they never have enough of it.
This obsolete anti-market mentality (Cook 1966) flourishes among the disciples
of Polanyi (1944) of whom the doyen was Paul Bohannan (1955, 1959). His
articles remain the main reference for anthropological discussion of money
economy and its presumed antithesis. Before being colonised by the British
around 1900, the Tiv maintained a mixed farming economy on the fringe of trade
routes linking the Islamic civilisation of the North with the rapidly
Westernising society of the coast. Bohannan argues that the Tiv pre-colonial
economy was organised through three spheres of exchange, arranged in a
hierarchy; and like could normally only be exchanged with like within each
sphere. At the bottom were subsistence items like foodstuffs and household
goods traded in small amounts at local markets. Then came a limited range of
prestige goods linked to long-distance trade and largely controlled by Tiv
elders. These included cloth, cattle, slaves and copper bars, the last
sometimes serving as a standard of value and means of exchange within its
sphere. The highest category was rights in persons, above all women, ideally
sisters, exchanged in marriage between male-dominated kin groups.
The norm of exchanging only within each sphere was sometimes breached.
Conversion upward was emulated and its opposite was disgraceful. The absence of
general-purpose money made both difficult. Subsistence goods are high in bulk
and low in value; they do not transport easily and their storage is problematic
(food rots). Prestige goods are the opposite on all counts. How many peas would
it take to buy a slave? Moreover, the content of the spheres had changed:
sister exchange had been largely replaced with bridewealth; slavery was
abolished and the supply of metal rods had dried up. Bohannan still insists
that Tiv culture was traditionally maintained through this separation of
compartments of value.
The introduction of modern money was a disaster, according to him. Anyone could
sell anything in small amounts, accumulate the money, buy prestige goods and
enter the marriage circuit on their own terms, regardless of the elders. This
amounted to the destruction of traditional culture. It is as if the technical
properties of modern money alone were sufficient to undermine a way of life.
Now this argument has come under sustained criticism; for example, that it is
idealist and should pay more attention to the organisation of production (Dupr
and Rey 1978), and that money is just a symbol of a whole complex of economic
relations we might summarise as capitalism (Parry and Bloch 1990). But even
these critics tend to ignore the political dimension of the colonial
transformation.
The contributors to Parry and Bloch (1990) share the view that indigenous
societies around the world take modern money in their stride, turning it to
their own social purposes rather than being subject to its impersonal logic.
The underlying theory is familiar from Durkheim (1965 [1912]). There are two circuits
of social life: one, the everyday, is short-term, individuated and
materialistic; the other, the social, is long-term, collective and idealised,
even spiritual. Market transactions fall into the first category and all
societies seek to subordinate them to the conditions of their own reproduction,
which is the realm of the second category. For some reason, which they do not
investigate, money has acquired in Western economies a social force all of its
own, whereas the rest of the world retains the ability to keep it in its place.
So here too we have a hierarchy of value where modern money comes second to the
institutions that secure society’s continuity. The picture becomes clearer if
we apply the spheres of exchange concept to Western societies. As Alfred
Marshall (1979 [1890]) wrote, it is not uncommon for modern consumers to rank
commodities according to a scale of cultural value. Other things being equal,
we would prefer not to have to sell expensive consumer durables in order to pay
the grocery bills. And we would like to acquire the symbols of elite status,
such as a first-rate education. If you asked a British person how many toilet
rolls a BMW is worth or how many oranges buys an Eton education, they would
think you were crazy. Yet all these things have been bought with money for
longer than we can remember. So the universal exchange introduced by modern
money is compatible with cultural values denying that all goods are
commensurate. Nor is this just a matter of ideas; there are real social barriers
involved. It does not matter how many oranges a street trader sells, he will
not get his son accepted for Eton. And the gatekeepers of the ancient
universities insist that access to what they portray as an aristocracy of
intelligence cannot be bought.
This gives us a clue to the logic of spheres of exchange. The aristocracy
everywhere claims that you cannot buy class. Money and secular power are
supposed to be subordinate to inherited position and spiritual leadership. In
practice, we know that money and power have long gained entry into ruling
elites. De Tocqueville (1955 [1856]) praised the flexibility of the English
aristocracy, unlike the French, for readily admitting successful merchants and
soldiers to their ranks. One class above all others still resists this
knowledge, the academic intellectuals. And so we line up with Tiv elders in
bemoaning the corrosive power of modern money and vainly insist that
traditional culture should prevail.
Why money matters
Westerners appear to think that including money in a transaction makes a huge
difference to its social significance. It is not so in most of the world’s
societies. I was once talking to a Ghanaian student about exchanges between
lovers in his country and he said that it was common there for a boy, after
sleeping with a girl he has met at a party, to leave some money as a gift and
token of esteem. Once he had done this with a visiting American student and the
resulting explosion was gigantic – “Do you imagine that I am a prostitute?” And
so on. Where does that moral outrage come from? Why does money matter so much
to us?
Buying and selling human beings is an old practice. We call it slavery. A wage,
however, is a pledge, a promise to pay when the work is done, which is more
flexible than slavery and ties up much less capital. A flood of rural-urban
migrants into industrial employment established wage labour as the norm in
nineteenth century Europe (Thompson 1968). This led to an attempt to separate
the spheres in which paid and unpaid work predominated. The first was ideally
objective and impersonal, specialised and calculated; the second was subjective
and personal, diffuse, based on long-term interdependence. Inevitably, the one
was associated with the payment of money in a public place, the other with
home; so that work usually meant outside activities, and the business of
maintaining families became known as housework. Now we earn money when we work
and we spend it in our spare time, which is focused on the home, so that
production and consumption are linked in an endless cycle. But it is not easy.
Especially at times of crisis, it is difficult to keep the personal and the
impersonal apart; yet our economic culture demands nothing less of us.
One sphere is a zone of infinite scope where things, and increasingly human
creativity, are bought and sold for money, the market. The second is a
protected sphere of domestic life, where intimate personal relations hold sway,
home. The market is unbounded and, in a sense, unknowable, whereas the
bounds of domestic life are known only too well. The normal link between the
two is that some adults, traditionally men more than women, go out to work,
to make the money on which the household subsists. The economy of the home
rests on spending this money and performing services without payment. The
result is a heightened sense of division between an outside world where our
humanity feels swamped and a precarious zone of protected personality at home.
This duality is the moral and practical foundation of capitalist society and
prostitution exposes its contradictions. What could be more personal than sex
and more impersonal than a money payment?
The attempt to construct a market where commodities are exchanged instantly and
impersonally as alienable private property is utopian (Macpherson 1964). The
idea of civil society in this sense was to grant a measure of independence for
market agents from the arbitrary interventions of personal rulers. All the
efforts of economists to insist on the autonomy of an abstract market logic
cannot disguise the fact that market relations have a personal and social
component, particularly when the commodity being bought and sold is human
creativity. Until recently, markets and money were minor appendages of
agricultural society, largely external to relations that organised the
performance of work and the distribution of its product (Polanyi 1944; Weber
1981 [1927]). The middle-class revolution of the seventeenth and eighteenth
centuries prepared the way for markets to be accepted at the centre of society
(Carrier 1994). But it was the industrial revolution that made selling ones
labour for wages the main source of livelihood. Only now did the market for
human services become the main means of connecting families to society.
Where does the social pressure come from to make markets impersonal? Weber
(1981 [1927]) had one answer: rational calculation of profit in enterprises
depends on the capitalist’s ability to control product and factor markets,
especially that for labour. But human work is not an object separable from the
person performing it, so people must be taught to submit to the impersonal
disciplines of the workplace. The war to impose this submission has never been
completely won (see Parry infra). So, just as money is intrinsic to the home
economy, personality remains intrinsic to the workplace, which means that the
cultural effort required to keep the two spheres separate, if only at the
conceptual level, is huge.
Money in capitalist societies stands for alienation, detachment, impersonal
society, the outside; its origins lie beyond our control. Relations marked by
the absence of money are the model of personal integration and free
association, of what we take to be familiar, the inside. Commodities are goods
because we consume them in person, but we find it difficult to embrace money,
the means of their exchange, as good because it belongs to a sphere that is
indifferent to morality and, in some sense, stays there. The good life, instead
of uniting work and home, is restricted to what takes place in the latter.
This institutional dualism, forcing individuals to divide themselves, asks too
much of us. People want to integrate division, to make some meaningful
connection between themselves as subjects and society as an object. It helps
that money, as well as being the means of separating public and domestic life,
was always the main bridge between the two. Today money is both the principal
source of our vulnerability in society and the main practical symbol allowing
each of us to make an impersonal world meaningful. If Durkheim (1965 [1912])
said we worship society and call it God, then money is the God of capitalist
society.
Anthropologists might sign up for the sentiment that money is the root of all
evil. But, in demonising money, they come close to endowing the institution
with an evil power all of its own. Marx wrote in Capital (1970 [1867]:
71-83) about the fetishism of commodities and the secret thereof. The word fetiche
is Portuguese for a West African custom of dedicating a shrine to a spirit that
is thought to inhabit a particular place. So, if you need to swim across a
dangerous river, a sacrifice to the spirit of the river will help you succeed.
Marx considered this to be an example of religious alienation. In his view the spirit
was an invention of the human mind; but the Africans experienced their own
creation as a superior agency capable of granting life or death. Something
similar, he believed, was at work in our common attitudes to markets and money.
Commodities are things made by people; money is the means we have created for
facilitating their exchange. Yet we often experience markets as animated
objects exercising a power over us that is devoid of human content, a force
that is usually manifested in the money form. Prices go up and down, more often
up, in a way that undermines our ability to manage our own lives. Marx thought
we might overcome this alienation since, unlike the spirits produced by
religious imagination, we know that human labour is the source of the commodities
we exchange for money. Capital was designed to show the way towards such
an emancipation.
We want to believe, at least, that the money we live by has a secure objective
foundation. Georg Simmel (1978 [1900]) thought of society as an endlessly-proliferating
network of exchanges (in other words, a market). He rejected the British
attempt to base money on the objective certainty of a gold standard, since this
reinforced a notion of money as something outside our individual or collective
control. He saw it rather as a symbol of our interdependence, locating its
value in the trust that comes from membership in society. Like Marx, he
identified a parallel between the abstraction of money prices in commodity
exchange and the abstraction of thought (scientific analysis) that represents
the highest level of our cognitive interaction with the world.
For Simmel, there is no objective truth, no absolute on which we can hang our
faith in existence. All we have are the subjective judgements we have made over
time. Truth is relative to its application. Similarly, the value of commodities
is not based on some objective standard, but is merely the outcome of what
people are willing to pay in relation to all the other goods and services they
want, given the resources at their disposal. Money is the means of making these
complex calculations. This was roughly the position of the new marginalist
economics of the day.3 So money is the common measure of value
uniting all the independent acts of exchange, stabilising the volatile world of
commodity exchange, much as Durkheim thought society lent stability to the
fluctuations of everyday life. Money, of course, is itself relative; but Simmel
thought it represents an element of coherence in a world of constantly shifting
prices. We are not yet ready to face the complex relativity of the real world,
and so take comfort from moneys symbolic steadiness. Most people prefer to
believe that there is something out there we can rely on. If God is dead and
Society has been killed off by the economists, then let Money be something real
and enduring.
An anthropological analysis of money: the euro
The euro is a decisive break with the past, symbolising the birth of a new
social order. Or is it? In order to make sense of its impact on European
societies, I choose to focus on money as both an idea and an object; as heads
and tails or the interplay of states and markets; as memory, a meaningful link
between persons and communities; and as a source of economic democracy, when
issued by the people.
Money as idea and object
Against
the myth of moneys origin in barter, Keynes (1930) asserts that states invented
money. He distinguishes the way debts, prices or purchasing power are expressed
(money as a unit of account, or money of account) from what is actually discharged
or held (money as a medium of exchange, or money proper). Thus, money
has an insubstantial form (money of account) and a substantial form (money
proper); is always both an idea and an object, virtual and real. Smith and Marx
stressed money's substantial form, money proper, but Keynes thought this was
less important than the emergence of a formal, state-defined money of account.
Once this existed, people began to transact business using both money proper,
issued by the state, and the obligations of individuals and corporations.
Presently, the bulk of these obligations are issued by banks; they far outweigh
money proper in circulation, and Keynes calls them 'bank money'.
The essence of modern state money is that currency of little or no worth is
offered to a people by its government in payment for real goods and services,
is the sole legal means of exchange within the territory and is the required
medium for payment of taxes. Central banks jealously guard the national
monopoly, policing the banks that actually issue most of the money. During the
last two centuries, state money has oscillated between being based on a
commodity (such as gold) and being worthless (fiat or paper money). In practice
most currencies are a hybrid. From the beginning, states and markets were
symbiotic. States needed the revenues from taxation of trade and some exotic
commodities as symbols of power; merchants needed the protection of law and the
establishment of a public standard. Each rested on an individualised concept of
society: the state on society centralised as a single agency, merchants on
private property in commodities and money. Society, conceived of as people
belonging to specific communities and associations was excluded.
Heads or tails?
Take
a look at any coin. It has two sides. One contains a symbol of political
authority, most commonly the head of a ruler, hence heads. The other
tells us what it is worth, its quantitative value in exchange for other
commodities. Rather less obviously, this is called tails. The two sides
are related to each other as top to bottom. One carries the virtual authority
of the state; it is a token of society, the money of account. The other says
that money proper is itself a commodity, lending precision to trade; it is a
real thing (this section draws on Hart 1986).
There is an obvious tension between the two sides that goes far deeper than
appearances may suggest. Victorian civilisation based its market economy on
money as a commodity, gold (Polanyi 1944); in the twentieth century political
management of money became normal for a time, but then became anathema again.
Now there is talk again of the markets reigning supreme and of states losing
control over national currencies in a process of globalisation. Yet the evidence
of our coinage is that both states and markets are (or were)
indispensable to money. What states and markets share is a commitment to
founding the economy on impersonal money. If you drop the coin, the person who
picks it up can do exactly the same as you with it. Impersonal money,
maintaining its value as a commodity across borders, made long-distance trade
possible between people who did not know each other. Today this impersonality
of money proper is what recommends it to people who prefer their transactions
to be secret.
Keynes tried to explain that modern money must be the managed outcome of the
interplay between states and markets. But what if money came from the people
instead? Some have said that it does. The German romantic, Miller (1931 [1816]),
argued that money expressed the accumulated customs of a nation or people (Volk);
others, such as Bagehot (1999 [1873]) and Simmel (1978 [1900]), conceived of
money as an expression of trust within civil society, locating value in
personal management of credit and debt. In an age of electronic money, other
possibilities present themselves (Hart 2001), for money is principally a way of
keeping track of what people do with each other. It is above all information, a
measure of transactions. Money need not be left to the death struggle of the
disembodied twins, states and markets. In short, money might become more
meaningful than it has been of late.
The meaning of money
The
word money comes from Juno Moneta, whose temple in Rome was where coins
were minted, and most European languages retain money for coinage.
Moneta was the goddess of memory and mother of the Muses. Her name was derived
from the Latin verb moneo, whose first meaning is to remind, bring to
ones recollection. For the Romans, money, like the arts, was an instrument of
collective memory that needed divine protection. As such, it was both a memento
of the past and a sign of the future.
A lot more circulates by means of money than the goods and services it buys.
Money conveys meanings and these tell us a lot about the way human beings make
communities (Buchan 1997). It expresses both individual desires and the way we
belong to each other. We need to understand better how we build the
infrastructures of collective existence. How do meanings come to be shared and
memory to transcend the minutiae of personal experience? Memory played an
important part in John Locke’s philosophy of money (Caffentzis 1989). Persons,
by performing labour on the things given to us by nature in common, made them their
own. But to sustain a claim on this property, they have to remain the same.
Property must endure in order to be property and that depends on memory. So,
money enables individuals to stabilise their personal identity by holding
something durable that embodies the desires and wealth of all members of
society. I would go further. Communities exist by virtue of their members’
ability to exchange meanings that are substantially shared between them. People
form communities to the extent that they understand each other for practical
purposes. And that is why communities operate through culture (meanings held in
common). Money is, with language, the most important vehicle for this
collective sharing.
Communities operate through implicit rules (customs) rather than state-made
laws. If they regulate their members, they usually do so informally, relying on
the sanction of exclusion rather than punishment. In the nineteenth century,
few believed that the state, an archaic institution of agrarian civilisation,
could govern the restless energies of urban commercial society. Accordingly,
primitive communities were studied to throw light on the task of building
modern societies according to democratic principles. Since the First World War,
the state has often seemed inevitable and small-scale alternatives hardly
relevant. However, nowadays the networks of market economy, amplified by the
internet and fast transport, offer more direct access to the world at large
than centralised states, and cheap information allows relations at a distance
to be made more personal. There is a call for devolution to less rigidly
organised communities or regions. It is time to think again about how societies
might be organised for their own development.
The meaning of money is that each of us makes it, separately and together. It
is a symbol of our individual relationship to the community. This relationship
may be conceived of, much as the state would have it, as a durable ground on
which to stand, anchoring identity in a collective memory whose concrete symbol
is money. Or it may be viewed as a more creative process where we each generate
the personal credit linking us to society in the form of multiple communities.
This requires us to accept that society rests on nothing more solid than the transient
exchanges we participate in. And that is a step few people are prepared to take
at present.
People’s money
Future
generations may well conclude that we are passing through a cumulative tax
revolt of proportions not seen since the end of the Roman empire (Weber 1974
[1909]). Revenue collection, both by government and corporations, depends on
the ability to force people to pay through the threat of punishment; and
territorial monopoly is indispensable to both. This, for all their conflicts of
interest, underlies the continuing alliance between corporations and
governments. The issue is whether borderless trade at the speed of light will
permit governments and corporations still to compel payment of their dues.
States are too big for the small things and too small for the big things.
Central powers will be devolved to regional or local government bodies, since
people are more likely to fund public projects nearer to home. At the same
time, they will seek out more inclusive institutions (federations,
international networks and single-issue pressure groups) better suited to
addressing global problems. The territorial dimension of society will therefore
devolve to more local units. These will retain a modified ability to coerce
revenues from their members, at a level limited by the sanction of personal
mobility. Support for projects beyond the local level will be voluntary because
of the scope for evading unwanted taxes.
How might public economies be organised without effective means of coercing
payment? The Swiss government has recently released its stock exchange from
state supervision, because it could not make good its threat to punish
offenders. It has encouraged the exchange to draw up its own rules with the
principal sanction of excluding transgressors. This example is likely to become
much more widespread with the erosion of territorial power. People will then
have to turn to their own forms of association and to more informal means of
regulation. We could participate in many forms of money and in the circuits of
exchange corresponding to them (Greco 2001).4
Modern bureaucracy, as embodied in law, markets and science, has undermined the
meaningful attachment of persons to the social order of which they are a part.
It follows that, when bureaucracy fails, the means of personal connection will
have to be reinvented. There are many antecedents for building communities on
the basis of individual members moral and religious commitment. The growth of
NGOs financed by charitable donations supports such an idea. Mauss (1990
[1925]) was far-sighted when he sought to trace the foundations of the modern
economy back to its origin in the gift, rather than barter. This is consistent
with the idea of money as personal credit, linked less to the history of state
coinage than to the acknowledgement of private debt. The need to keep track of
proliferating connections with others is then mediated by money as a means of
collective memory.
People will voluntarily enter circuits of exchange based on special currencies.
At the other extreme, we will be able to participate as individuals in global
markets, using international moneys such as the euro, electronic payment
systems or even direct barter via the internet. It will be a world whose
plurality of association, even fragmentation, will resemble feudalism more than
the Roman empire. In such a world, one currency cannot possibly meet all the
needs of a diversified region's inhabitants. The changing technical form of
money has exposed the limitations of central banks, reduced now to maintaining
a national monopoly whose economic inadequacy is exposed on all sides. In
response, people have started generating their own money, offering individuals
a variety of community currencies linked by increasingly-sophisticated electronic
payment systems.
The euro
The
evolution of money proper is towards ever more insubstantial versions, from
precious metals to paper notes to ledger entries to electronic digits. Money is
revealed as pure information; and its function as money of account takes
precedence over its form as circulating objects or currency. The euro began
life in a wholly virtual form, as money of account, without an objective
existence as currency. During this time, it lost over 20 per cent of its value
against the dollar. This gave the arrival of the notes and coins, in January
2002, a tangible objectivity in a world of runaway intangibles, a symbol of a
new political era. But since the participating currencies had been joined in
the European Monetary Union for a decade, the euro has made little difference
to people’s experience of money either as an idea or as an object.
Has the euro altered the balance between states and markets? The euro may not
be a national currency, but it does aim to be federal, like the US dollar, and
the twelve participating countries represent a league of states. Joining a
larger currency bloc is a way of trying to cope with the markets, the global
tide of virtual money that threatens to swamp the independence of national
economies. But the euro is still a form of state money, and one even less
democratically accountable than its national precursors. It is a throwback to
the Bretton Woods era of fixed exchange rates. If government of modern
societies from a fixed central point has always been anomalous, this is even
more likely to be true of Europe in the near future. Its constituent states
will come under pressure for more flexible instruments of economic management.
The euro cannot do the job all by itself.
If money is memory, then the euro provokes very long memories indeed. Its
advent was celebrated by commentators as a return to a cohesion not seen since
the Roman empire. Whatever we may think of Rome's political system, the promise
of overcoming the fragmentation of European sovereignty inherited from
feudalism is indeed the huge symbolic prize conferred by monetary union. The
European Union is a community, not a state; and its founding principle of
subsidiarity ensures that there is room for many levels of community
underneath. European unity is valuable; but there is room for less inclusive
monetary instruments to complement the euro, just as French or Parisian
identity is hardly erased by a cross-border currency.
Money of account is the key to its social significance and, after several thousand
years of state money linked to scarce commodities, it will take some effort to
embrace another form, people’s money. Digitalisation encourages a growing
separation between society and landed power, but the euro involves only a
limited break with the territorial principle. Its logic is still that of a
central bank monopoly within an expanded territory. At best, the national
governments will be more constrained in their ability to raise taxes beyond the
regional norm. And, of course, travellers will be less subject than before to
usurious exchange costs. Against this, management of the European economy from
a single point will impose stresses on regions ill-suited to the common
monetary policy. And people will still finance governments and the banks through
the imposition of a monopoly currency as sole legal tender. We can make our own
money, rather than pay for the privilege of receiving it from our rulers.
Already community currencies are breaking new ground, thanks to the
possibilities inherent in the new information technologies. The next chapter of
monetary history will be written by such approaches. But the euro will probably
be with us for as long as Europeans think of themselves as a community with
common purposes.
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1. Akin and Robbins (1999) present a rich collection of ethnographic essays on
money in Melanesia, but there is no attempt to engage with economic theory.
2. See www.thememorybank.co.uk/book for a version of the text.
3. The marginalist revolution is attributed to Jevons (England), Menger
(Austria) and Walras (Switzerland) in the 1870s, but Alfred Marshall (1979
[1890]) was the main instrument of its diffusion.
4. I have benefited greatly from the knowledge of Michael Linton, who invented
the most widespread type of community currency, known as LETS, in British
Columbia in 1982.
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Volume 2, June 2005, ISSN 1552-5112