My talk makes a number of points that can only be sketched briefly in twenty minutes.
1. Humanity is caught between national and world society. This is both dangerous and an opportunity for us. Yet much of what has been presented here has assumed that we can safely talk about the United States in isolation from the rest of the world.
2. Everything we have heard today has been impersonal and this will not do. People want to relate impersonal knowledge to their personal lives. And this relationship between the personal and impersonal aspects of social life is being radically changed by the digital revolution in communications, as manifested in the internet.
3. I want to offer a vision of money’s role in our lives that emphasizes its redemptive qualities as perhaps the principal means of mediating our relations with impersonal society in ways that can be personally meaningful.
4. The dominant social form over the last 150 years has been ‘national capitalism’. Any future we contemplate beyond the current crisis must take into account its history which I will present as a story of rise and fall in five stages.
5. Towards the end national capitalism resembled nothing so much an ‘Old Regime’, that arbitrary version of unequal society which was overthrown by the American and French revolutions. More accurately, I would say that the world society constituted by national capitalism as the dominant form manifested an obscene inequality and lawlessness characteristic of the Old Regime.
We are asked to re-imagine the economy. But what is THE economy? Where is it? The economy, when unqualified, is normally assumed to be national, but what we have to imagine is a genuinely world economy and all the levels underneath. I believe that we are at the end of something and the beginning of something new. In order to re-imagine the future, we have to re-imagine the past. What is it that is ending and what is its history?
The dominant social form of the last 150 years has been the nation-state formed through an alliance between capitalists and the military landlord class whose defeat was the principal aim of classical political economy. It was an alliance between big money and specialists in crowd control. They came together in a linked series of national revolutions in the 1860s, spilling over into the next decade, in order to secure industrial capitalism and the nation-state from the threat of the urban masses. These were the American civil war, the abolition of serfdom in Russia, Italy’s Risorgimento, Japan’s Meiji restoration, Britain’s second Reform Act and the formation of the Anglo-Indian superstate, German unification, the Franco-Prussian war and the French Third Republic. All of these moves by the main players in twentieth century history established a political framework capable of subduing and mobilizing people by a combination of capital, violence and the appeal to cultural unity. I call it national capitalism, the attempt to manage money and markets through central bureaucracy; but this has always been in dialectical tension with financial imperialism, a force for globalization that flourished for three decades before WW1 and for the last three decades, with disastrous consequences in the first instance and potentially for us too.
I should first indicate briefly my own approach to money. The economists understand money and markets exclusively through impersonal models, so anthropologists and sociologists have focused on how people make money personal and concretely social. But the economy exists at more inclusive levels than the person, the family or local groups. This is made possible by the impersonality of money and markets, where economists remain largely unchallenged. Money is the principal means for us all to bridge the gap between everyday personal experience and a society whose wider reaches are impersonal. As a token of society, money must be impersonal in order to connect individuals to the universe of relations to which they belong. But people make everything personal, including their relations with society. Money in capitalist societies stands for alienation, detachment, impersonal society, the outside; its origins lie beyond our control (the market). 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 (home). This institutional dualism, forcing individuals to divide themselves every day, asks too much of us. People want to integrate division, to make some meaningful connection between their own subjectivity 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. That is why money must be central to any attempt to humanize society. It 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 the proliferation of personal credit today could be seen as a step towards greater humanism in economy, this also entails increased dependence on impersonal governments and corporations, on impersonal abstraction of the sort associated with computing operations and on impersonal standards and social guarantees for contractual exchange. If persons are to make a comeback in the post-modern economy, it will be less on a face-to-face basis than as bits on a screen who sometimes materialize as living people in the present. We may become less weighed down by money as an objective force, more open to the idea that it is a way of keeping track of complex social networks that we each generate. Then money could take a variety of forms compatible with both personal agency and human interdependence at every level from the local to the global.
The reality of markets is not just universal abstraction, but this mutual determination of the abstract and the concrete. If you have some money, there is almost no limit to what you can do with it, but, as soon as you buy something, the act of payment lends concrete finality to your choice. Money’s significance thus lies in the synthesis it promotes of impersonal abstraction and personal meaning, objectification and subjectivity, analytical reason and synthetic narrative. Its social power comes from the fluency of its mediation between infinite potential and finite determination. To turn our backs on markets and money in the name of collective as opposed to individual interests reproduces by negation the bourgeois separation of self and society. It is not enough to emphasize the controls that people already impose on money and exchange as part of their personal practice. That is the everyday world as most of us know it. We also need ways of reaching the parts of the macro-economy that we don’t know, if we wish to avert the ruin they could bring down on us all. This was what Simmel had in mind when he said that money is the concrete symbol of our human potential to make universal society.
National capitalism has been the principal cause of our alienation from money and society as unreachable social objects, since it concentrates agency in remote centres of power that leave most people without a meaningful link to the forces changing society. It has evolved through five historical phases:
1. 1860s and 70s: its formation in a series of political and technological revolutions. The latter included steamships, continental railways and the telegraph.
2. 1880s to 1914: financial imperialism; globalization 1; bureaucratic revolution; the installation of the uneasy alliance between states and corporations that we call public and private sectors.
3. 1914-45: the second 30 years war (Churchill); an unmitigated catastrophe; wars and economic disaster.
4. 1945-70s: the social democratic consensus; the ‘golden age’ of national capitalism (Hobsbawm); the nuclear terror of the Cold War; the anti-colonial revolution and civil rights.
5. 1980s-now: neoliberalism beginning with Reagan and Thatcher, dismantling of the postwar class compromise; globalization 2. I claim that this was the period when world society was formed as a single interactive social network for the first time. It was fragile and highly unequal, but it hinged on three developments: the collapse of the Soviet Union and the end of the Cold War, opening up the whole world to transnational capitalism; the rise of China and India’s two billion people as economic powers in their own right; the shortening of time and distance through the internet.
The alliance of states and corporation came to resemble the Old Regime, especially when George Bush II and Halliburton acted as if they were George III and the East India Company. If national capitalism became near the end an increasingly arbitrary engine of inequality at the global level, what are the prospects for a world revolution now?
The forces of impersonal society have been weakened. This is true of large-scale private capital, especially the banks, and of the dominant free market ideology (economics, at least in the world outside Chicago!). This had led temporarily to reliance on the powers of government held by the leading states, in self-conscious evocation of a Keynesian past. But the national solutions of the 30s will not work this time; and states are compromised by their ties to the corporations. Their methods are ineffective and will fail, thereby discrediting the second leg of national capitalism. Our main problem is to locate the combination of political forms and levels of association that are adequate to address this crisis.
We need to identify the social forces that have been building up in this last phase and that may take advantage of the Old Regime’s collapse.
1. The shift in economic power West to East (North to South?) has undermined North Atlantic hegemony; but this may merely serve as an opportunity for China, India, Russia and Brazil to revive national capitalism on their own terms.
2. The recent rise of trading blocs (EU, NAFTA, ASEAN, Mercosul) introduces a new regional and federal principle to world political economy. It will be a major contribution to global democracy if Africa, drawing on a tradition of Panafricanism, can form its own regional association.
3. I have focused in my own research on the potential for enhancing personal society through the internet, social networking, open source methods and so on. The dominant fact of our epoch is the radical cheapening of the cost of transferring information, making it possible to add lots of personal information to transactions at distance. There is much more to be said about this.
4. This is related to the possibilities for open money to flourish at the expense of the conventional banking system. Again I have explored community currencies at some length, drawing on the experience and ideas of Michael Linton and his associates.
5. The global institutions of late 1940s need to be replaced by new ones, even perhaps by a world government. Some may argue that the advent of Obama opens up a more progressive phase of international politics, but substantial reform, as Kant suggested when he said that conflict is the precondition for a more lawful world, is likely only after a prolonged breakdown of the peace. Must we go through another thirty years war in order to revive the impetus of the 1940s? My fear is that the closest historical analogy for our dilemmas is not 1933, but 1913, when globalization 1 broke down after three decades of financial imperialism.
There is an enduring tension between the closure of territorial rule and the universality of money. This has been magnified by the dominance of impersonal society in national capitalism. The forces for a democratic alternative, based on more directly personal relations to society, have been building up for decades and now face much weaker opposition from the Old Regime. I do not say a new liberal revolution will succeed; but I know which side I am on.
Talk given at the Financial Crisis Conference, University of Chicago, 10th April 2009, panel After the crisis: re-imagining the economy with Eugene Fama and James Galbraith, chair/discussant Moishe Postone.