Sociology and anthropology emerged as modern academic disciplines as part of the attempt to grasp how industrialization was changing the place of Europe and North America in world history. Karl Marx, Max Weber, Emile Durkheim and George Simmel are the classical sources for this enterprise; but we have chosen to highlight the contribution of Durkheim’s nephew and close collaborator, Marcel Mauss. He helped to establish the ethnological tradition in France; but he was also a prolific financial journalist and political commentator. Mauss took the commonplace intuition that money is an important aspect of how people relate to each other further to claim that monetary relations are the foundation of social identity, especially when it comes to extending our social reach beyond what is local and familiar. Our reading synthesizes Mauss’s famous essay on the gift (1990) with a later one on the person (Carrithers, Collins and Lukes 1985).
Karl Polanyi, a Hungarian historian, is next in line after Mauss. It is not clear how directly he drew on Mauss’ work; but he refused to be limited to exotic and historically distant objects of enquiry, at least before becoming an American academic after the Second World War. Moreover, he went beyond Mauss in investigating monetary relations throughout world history in order to highlight the political plight of his times — the terrible period of world war and economic depression from 1914 to 1945. Polanyi traced these conflicts to the unequal distribution of wealth and asked how this might be redressed.
These two authors’ contributions suggest an analytical framework for assessing the anthropology of money over the last half-century and especially since the 1980s, before we end by outlining our own constructive proposals.
Marcel Mauss: money and credit as the basis of human identity and of an expanded society
Marcel Mauss led a divided life (Fournier 2006, Hart 2007). He maintained a Chinese wall between his academic and political writings. He broke this rule in the concluding chapter of his essay on The Gift (Mauss 1925), but his remarks there are hard to interpret in the absence of a systematic account of the modern capitalist economy. Mauss’s political project has largely been ignored by economic anthropologists; and the ethnography of exchange and money has developed in isolation from more comprehensive accounts of contemporary economic history. His financial journalism on the exchange rate crisis of 1922-24 – the same time that he was writing The Gift – takes up over a fifth of his published political writings (Mauss 1997). We need to juxtapose these bodies of work (Hart 2010), but his famous essay is usually read in isolation. Marcel Mauss (1925) was greatly enthused by Malinowski’s confirmation that the potlatch of America’s Northwest Coast flourished in Melanesia, but he held that money and markets were human universals, whereas Malinowski (1921, 1922) went out of his way to oppose the kula ring to both. The impersonal economic forms found in capitalist societies were recent inventions, according to Mauss.
In The Division of Labour in Society (1893), Emile Durkheim sought to establish the social foundations of modern economies. The idea of economic progress through specialization was at the core of the British economics founded by Adam Smith. A century later economic individualism was the cornerstone of evolutionary theory and Herbert Spencer’s Social Darwinism the influential became the ideology of a triumphant Western bourgeoisie. Durkheim showed that the division of labour was a dialectical process of separation and integration whereby society became stronger and the scope for individual action was enhanced. The British emphasis on making individual contracts in markets obscured the social glue of “the non-contractual element in the contract” that made the economy possible – a combination of law, state, customs, morality and shared history that it was the sociologist’s task to make more visible. The individual is the result of social development and not its source.
The Gift is in a direct line of descent from Durkheim’s book. Mauss summarily eliminates the two utilitarian ideologies that purport to account for the evolution of contracts: “natural economy”, Smith’s idea that individual barter was aboriginal; and Spencer’s notion that primitive communities were altruistic, giving way eventually to our own regrettably selfish, but more efficient individualism. Against the contemporary move to replace markets with communist states, he insisted that individual freedom and social obligation are both intrinsic to the human condition and that markets and money are universal, though not in their current form.
One of Mauss’s key modifications to Durkheim’s legacy was to conceive of society as a historical project of humanity whose limits were extended to become ever more inclusive. The point of The Gift is that society cannot be taken for granted as a pre-existent form. It must be made and remade, sometimes from scratch. Heroic gift-exchange was designed to push the limits of society outwards. It was liberal as in the “free market”. The exchange was powered by generosity: self-interested for sure, but not in the way associated with Homo economicus. Malinowski’s account of the kula ring is the contested origin for Mauss’s discussion: “The whole intertribal kula is merely the extreme case … of a more general system. This takes the tribe itself in its entirety out of the narrow sphere of its physical boundaries and even of its interests and rights”. (Mauss 1990: 36) No society is ever economically self-sufficient, least of all these Melanesian islands. So to the need for establishing local limits on social action must always be added the means of extending a community’s reach abroad. This is why markets and money in some form are universal, and why any attempt to abolish them must end in catastrophe.
Mauss’s chief conclusion was that the attempt to create a free market for private contracts is utopian and just as unrealizable as its antithesis, a collective based solely on altruism. Human institutions everywhere are founded on the unity of individual and society, freedom and obligation, self-interest and concern for others. Modern capitalism and economics rest on an unsustainable attachment to one of these poles and it will take a social revolution to restore a humane balance. If we were not blinded by ideology, we would recognize that gift-giving survives in our societies – in weddings and at Christmas, in friendly societies and more bureaucratic forms of insurance, even in wage contracts and the welfare state. The economic movement from below that he advocated in his political journalism – professional associations, cooperatives, mutual insurance – is a secular version of what can be found in the religions of archaic societies, as well as in the central phenomena described in The Gift.
When Malinowski produced his account of native adventurers in the Western Pacific, Homo economicus was not only absent, but revealed as a shabby and narrow-minded successor to a world the West had lost. Marcel Mauss was excited by all this, but he felt Malinowski had gone too far. The latter was adamant that the Trobriand kula valuables were not money in that they did not function as a medium of exchange and standard of value (Malinowski 1921). But, in a long footnote, Mauss held out for a broader conception:
On this reasoning … there has only been money when precious things … have been really made into currency – namely have been inscribed and impersonalized, 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. (Mauss 1990:127)
He suggested that primitive valuables are like money in that they “have purchasing power and this power has a figure set on it” (ibid.). He also took Malinowski to task for reproducing the bourgeois opposition between commercial self-interest and the free gift, a dichotomy that many anthropologists have subsequently attributed to Mauss himself.
Mauss’s famous essay should be read alongside a series of articles he wrote for his party’s newspaper, Populaire, on the exchange rate crisis of 1922-4 (Mauss 1997). The stability of the franc was a matter of acute public concern, since it was taken to be a measure of France’s international standing; and political panic when the franc dropped was commonplace. Mauss concluded that panic in the markets, not fiduciary inflation, was the cause of exchange rate depreciation. Storms were brewing from every direction: “These are human phenomena at work: collective psychology, imponderables, beliefs, credulity, confidence, all swirling about” (29 February 1924). In an unpublished paper, “A means of overhauling society: the manipulation of currencies” (Fournier 2006: 212 and 390 n.105), Mauss claimed that the great economic revolutions are “monetary in nature” and that the manipulation of currencies and credit could be a “method of social revolution …without pain or suffering”:
It suffices to create new monetary methods within the firmest, the narrowest bounds of prudence. It will then suffice to manage them with the most cautious rules of economics to make them bear fruit among the new entitled beneficiaries. And that is revolution. In this way the common people of different nations would be allowed to know how they can have control over themselves – without the use of words, formulas or myths. (Mauss, in Fournier, ibid.)
Mauss argued for a pragmatic understanding of the human economy that would be of use to people in their daily lives. Nearly a century and many more financial crises later, we draw inspiration from him for a similar argument (Hart and Maurer 2009).
Mauss’s position contrasts with those of Karl Marx and Max Weber, the two main sources for a modern social theory of money. Marx’s account of monetary relations in Capital (1867) turned classical political economy on its head by using the labour theory of value to demonstrate the exploitation of workers. Weber’s theory corresponded to a Protestant tradition of judging the quality of human beings by the product of their work. Yet, Marx’s analysis of money as a fetishized source of alienation also provides a sophisticated way of showing how the unequal distribution of resources might be used to mobilize the working classes. Grundrisse (1859, published in English only in 1973), the notebooks that he compiled during the long period of preparing to write Capital, offers a broader account of money’s role in world history. The contrast between Marx’s approach in these two works, not to mention his many polemics against Proudhon, Robert Owen and the Ricardian Socialists on money’s role in society (Nishibe 2005), makes it hard to summarize his core vision. But he certainly placed money at the centre of world history and of any proposals for society in future.
While Max Weber did engage with world history in a systematic way, his analytical categories closely reproduce the moral vision of neo-Kantianism. The “subject”, whether a Chinese peasant or a Protestant entrepreneur, exercises free will when engaging with values through action of three types – habitual, affective or rational – that set the limits of what Weber’s sociology could account for. He did not seek to redraw the boundaries of human sociality, whether in monetary relations or society more generally. The interesting questions he poses in his economic sociology, culminating in the posthumous publication of his General Economic History (1922), do not support a vision of an alternative future for humanity.
Marcel Mauss’ approach to money is at once more attentive to the details of each monetary configuration, broader in its scope and more uncertain concerning the future. His comparisons yield universal moral foundations for the political projects of his day. But his idea of human sociality does not contain answers to what monetary relations might tell us about ourselves and our society. It is grounded in the issues at hand and the specific solutions they demand. We may not wish to follow the path he outlined for an “economic movement from below”. But we can ask with him how money defines us and our notion of society in an era of global financial flows, digital communications and growing awareness of the links between the world economy and the future of the environment.
Karl Polanyi and the politics of distribution
If Mauss’s encounter with Malinowski remains the high point of the anthropology of money to date, it is worth spending some time, en route to today’s ethnography of finance, with the “substantivist” approach to money in mid-century, as identified by Karl Polanyi (1957) and typified by Paul Bohannan (1955, 1959). In Dahomey and the Slave Trade (1966), Polanyi pointed to the difference between “general-purpose money” (our own money that can be used to buy anything) and the “special-purpose monies” that enjoyed wide circulation in the non-industrial world (where they could only be used in exchange for a limited range of goods). Bohannan developed this idea to identify separate “spheres of exchange” among the Tiv of Nigeria. Subsistence items, luxuries and goods expressing the highest social values circulated in separate compartments, since they were incommensurate. The introduction of Western money by colonialism was a disaster since it broke down barriers to exchange between the spheres. This story has passed into anthropological folklore as a staple of what every student learns, even though it has been attacked by historians as factually wrong and found theoretically naïve and misleading by several anthropologists.
In The Great Transformation (1944), Polanyi listed money as one of the three “fictitious commodities”: “Actual money is merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanism of banking or state finance” (2001: 72). Here he comes close to suggesting that a free market in money entails buying and selling society itself. Consistent with this approach, Polanyi inverts the liberal myth of money’s origin in barter:
The logic of the case is, indeed, almost the opposite of that underlying the classical doctrine. The orthodox teaching started from the individual’s propensity to barter; deduced from it the necessity of local markets, as well as of division of labour; and inferred, finally, the necessity of trade, eventually of foreign trade, including even long-distance trade. In the light of our present knowledge, we should almost reverse the sequence of the argument: the true starting point is long-distance trade, a result of the geographical location of goods and of the ‘division of labour’ given by location. Long-distance trade often engenders markets, an institution which involves acts of barter, and, if money is used, of buying and selling, thus, eventually, but by no means necessarily, offering to some individuals an occasion to indulge in their alleged propensity for bargaining and haggling. (Polanyi 2001: 58)
Money and markets thus extend society beyond its local core. Polanyi believed that money, like the sovereign states to which it was closely related, was often introduced from outside; and this was what made the institutional attempt to separate economy from politics and naturalize the market as something internal to society so subversive.
Polanyi distinguished between “token” and “commodity” forms of money. Token money was designed to facilitate domestic trade, commodity money foreign trade; but the two systems often came into conflict. The tension between the internal and external dimensions of economy often led to serious disorganization of business. Money was thus
…not a commodity, it was purchasing power; far from having utility itself, it was merely a counter embodying a quantified claim to things that could be purchased. Clearly, a society in which distribution depended on possession of such tokens of purchasing power was a construction entirely different from market economy. (2001: 196)
Like Mauss, Polanyi explored money’s constitutive role in framing the limits of sociality. He did not take money to be a set of eternal functions, nor did it play the same role in establishing power relations and social hierarchies across time and place. Polanyi’s analysis may be understood as a critique of market economy, compatible in some ways with the Marxists’. But his point is to show how various monetary arrangements correspond to different social configurations and that the current one, whereby a powerful finance industry is in league with nation-states, must be seen in this light, especially if we wish to transform it.
Rather than start, as economic liberals do, with a definition of money’s functions and with an ontology of the agents who use it, Mauss and Polanyi show how, in specific settings, monetary relations are fundamental to the definition of self and society. These relations moreover are potentially subversive, in that they challenge social rules and hierarchies, even the boundaries of society itself. The prevailing perspective on economy today represents our interdependent world’s contradictions as being largely a conflict over credit and currency; but these authors show how anthropologists might contribute to shaping humanity’s common future. In the major methodological debates of the 1960s and 70s, however, anthropologists acquiesced in an academic division of labour that limited them to exotic local objects of study and to parochial debates. Although the anthropology of money and finance has been resurgent since the 1980s, we are still struggling with this limitation.