Prospects for the anthropology of money and finance

By | September 4, 2013

What directions might the anthropology of money and finance take in future? Anthropologists have only just begun to address monetary relations as a global phenomenon. This means that fieldwork-based ethnography must be integrated with the study of world society and history. There are precedents for this, in addition to the legacy of classical founders like Mauss and Polanyi. Even if money and finance have become global in scope, we should not forget either the nation-states that gave birth to this system. The development of communication technologies has also changed how billions of individuals relate to humanity at every level from the most intimate to the most inclusive. There is much left to discover about the specific meanings money has today and what social relations it allows. Since money is a major means for the making of world society, we offer some normative propositions concerning the political ends of the anthropology of money.

World history and global society

Recent anthropological research, as we have seen, was mostly concerned with money arrangements in specific times and places. This work lacks a long-term historical perspective when compared with Mauss and Polanyi, not to mention Weber or Marx. Several problems need to be addressed.

The first concerns using comparative analysis to bring a broader perspective to the debates. The novelty of financial operations as seen from a trading desk may appear in a different light when compared with how traders made global transactions at other times or when it is understood that hedging long-term currency fluctuations has been a major concern for centuries. Mauss made a pointed contribution to current debates about income distribution and inequality in France by highlighting how reciprocity traverses hierarchy in the Northwest Coast potlatch, the kula ring and ancient Teutonic law. Polanyi’s insight into the commoditization of everyday life was made possible by studying the public commons it had replaced. Weber’s classical work on the Protestant ethic reminds us that obsessive capital accumulation today was limited to a small minority of religious fanatics only a few centuries ago. All these examples point up the value of comparison across time and space, if we are to recapture the vision that launched modern anthropology.

We need to be reflexive too, as well as being mindful of history. Mauss saw in his comparisons the bedrock of all human morality. But his diverse examples also generated analytical categories broad and deep enough for us to say something different about the present. Anthropologists must address the theories of money and credit that were fundamental to historical arrangements. This implies in turn that we understand our own assumptions within a historical perspective. Hart (1986) has shown that monetary theories based on the opposition between market and state — which still structures most debates about the economic crisis – underlie the discourse of individual freedom that articulates commerce and citizenship within a national community. Anthropologists should therefore study narratives of monetary policy and financial regulation today and reflect critically on the categories of analysis we have developed since the origins of modernity.

Historicity is essential to any reflexive analysis of global monetary relations today. Too often, anthropologists acknowledge the centrality of history, but still leave it out of their descriptions and analyses. Thus, even when analysing colonial relations, Bloch and Parry (1989) assumed the global context away in order to concentrate on their local objects of study. Most ethnographic research on finance is concentrated in a particular region of the world or even on one department in a company. These studies do engage with how the people they observe operate in global networks, but the latter usually appear only as an implicit abstraction. Descriptions based on fieldwork are inevitably concerned with a very restricted place and history serves only as background for the present. Fieldwork has become the discipline’s trademark method and the source of its most original data. We do not want to give it up; but it severely constrains what we see, since it can only be a small part of the story. Anthropologists need new methods and analytical categories stretching far beyond local interactions.

Making global phenomena an integral part of anthropological study implies a specific form of reflexivity that is often missing from studies of money and finance. One of Jane Guyer’s (2004) strengths is her ability to study specific monetary arrangements in Nigeria as the historical result of interaction between previous local arrangements and global money forms circulating as a result of colonization and world trade. She avoids falling into the trap of assuming colonization or global trade away as a self-evident matter of fact, to be analysed only through their effects on a specific setting. In contrast with Guyer and like most ethnography, media and political accounts of the financial crisis suffer from a tendency to conflate local events with “the world”(Ortiz 2012). The “crisis” is much less global when seen from Brazil, China and India, even though the livelihoods of people in these regions are affected by it. Anthropologists often refer to the financial crisis in the West without ever defining what they mean by it. It is one thing to talk about the recapitalization of American banks, another to talk about sovereign debt and the plight of the euro. Analysing monetary and financial relations at the global level demands that we take account of how we are influenced by the environment in which most anthropological production takes place. Labelling everything “neoliberalism” is not a substitute for studying world economy.

We, the fish, need to understand the ocean in which we all swim, money. Anthropologists will only make a significant contribution when we place world history and society at the centre of our analysis. This is probably true for many other objects of study. Nevertheless we would highlight two issues where we believe this perspective is fundamental.

States, corporations and communication technologies

The complex relation between states and corporations has been at the centre of the production of money and its guarantees for centuries. Since the Second World War, the progressive collapse of the gold-standard was accompanied by the extension of mass media, with radio, TV, cinema and finally the internet and cellular phones. These processes are fundamental to the development of the finance industry and to its crises, as well as to global tensions over trade and currency wars.

The financial crisis is only superficially a question of credit boom and bust (Hart 2012). A deeper cause is the breakdown since the early 1970s of the social organization of money that the world has come to live by. “National capitalism” (Hart 2009) is the modern synthesis of the nation-state and industrial capitalism, the institutional attempt to manage money, markets and accumulation through central bureaucracy within a cultural community of national citizens; and its author was Hegel in The Philosophy of Right (1821). It is linked to the rise of large corporations as the dominant form of capitalist organization in a bureaucratic revolution of the late nineteenth century. Its main symbol has been a national monopoly currency (legal tender or central bank money). The nation-state has become the dominant model for thinking about society, even though society itself has been leaking across its boundaries for a while now. It is hard to imagine society in any other way.  Yet we must. How may we conceive of society as plural rather than singular, as a federated network rather than as a bounded and centralized hierarchy?

The era of national monopoly currencies is very recent (from the invention of bank rate in the 1850s). Before that and already from some decades now, multiple currencies have been the norm. All-purpose money has been breaking up since the USA went off gold in 1971 (Dembinski and Perritaz 2000). World economy has reverted since the collapse of the Bretton Woods system of fixed parity exchange rates to the plural pattern of competing currencies that was normal before the modern era. The finance industry actively produces monies and credit forms with restricted circulation that mix with state-money, both reinforcing and weakening it. But other forms of money are appearing, also based, like state-money since the end of the gold standard, on communications networks and the institutions and rules of mutual trust.

Foreign exchange markets with a transaction volume of 4 trillion dollars a day and markets for stocks and bonds whose capitalization far exceeds global output have only emerged in the last three decades, thanks to several revolutions in communication technologies. The Internet is one moment in a process involving the extension of telephone cables and the real time circulation of information through satellites that was unthinkable less than a century ago. These means of communication enable the monetary and financial relations we are familiar with today. Along with extension of the mass media, they also allowed the whole world to enter the intimacy of people’s homes and to inform daily transactions everywhere. The revolution in communication technologies did not just reinforce centralized institutions of money creation such as the banks and governments. They also allowed everyday life to be linked to the world economy through money (Hart 2000). Since the millennium, we have seen the explosion of the social media (Web 2.0) and a shift towards the use of mobile phones for computing operations and increasingly for monetary transactions. The internet never had a built-in means of payment, but mobile phones do (Agar 2004; Horst and Miller 2006).

Money today is a constitutive part of the multiple layers that make up our identity, from the most intimate relations to communities of exchange on a vast scale. Participation through money allows us to express ourselves and also indexes our place in hierarchies, solidarities and enclosures. Our identities expand, fragment and recombine as we move from the most local transactions to national or regional currencies. Through exchanges via the internet or mobile phones, we can span the world and connect personally with people whom we will never meet. Central banks, insurance companies, pension funds, global and local banks, savings clubs and other local credit schemes, all shape the possibilities for our personalities to develop. We learn about politics and our membership of larger groups by participation in monetary networks which are often marked by the conflicts and violence of exclusion or entrapment. As Mauss saw, the notion of society itself is reshaped by this multifarious expansion. If we hope for a more peaceful and integrated world society, money will certainly play an important role in its formation.

Money in the making of world society

Georg Simmel’s The Philosophy of Money (1900), written at the height of modernism, still has a lot to offer when it comes to thinking about the current crisis. He argued that money’s functionality (the ends to which it is put and its technical organization) would eventually be emancipated from its substance (metals, paper etc). The physical reality of currency provided one anchor of money’s stability. Money often appears to be exclusively just a means of exchange linking buyers and sellers, but it always introduces a third party to bilateral exchange — the community that shares its use. The essence of money is what people use it for in society, within a community based on shared social institutions; and this second anchor of money’s stability, he thought, would be progressively revealed as a result of money becoming more insubstantial. Simmel’s prophecy has been realised to the extent that the digital revolution has accelerated and cheapened electronic transfers.

The main problem with Simmel’s confident prediction of a social replacement for money’s materiality is that national capitalism has been losing its grip since the 1970s. The “non-contractual element in the contract” (Durkheim 1893) cannot be sustained by national frameworks alone. The old single-currency model of national economy must somehow be extended to a more plural, federal and inclusive conception of society. The European Union and its regional counterparts elsewhere (ASEAN, Mercosul etc.), whatever the limitations of their design, are already a step in this direction. The International Financial Institutions (IFIs) likewise need a new Bretton Woods; and a bottom-up approach to building world institutions afresh is also vital (Pleyers 2010). The cultural logic of national capitalism leads the political classes who got us into this mess to repeat the same mistakes over and over. Politics is a dialogue of the deaf, between those who deny the need for any political regulation of markets and others who remain trapped in the outmoded model of central bank money.

Most people perceive world society as at best a utopian fantasy or at worst a threat to national sovereignty. The infrastructure of money has already become decentralized and global. A return to the protectionism of the 1930s is bound to fail. Where are the levers of democratic power to be located, now that globalization has exposed the limitations of national economic management? We need to build an infrastructure of money adequate to humanity’s common needs. This agenda seems impossibly remote right now. The idea of a “human economy” offers a bridge to that movement for anthropologists (Hart, Laville and Cattani 2010).

Polanyi and Mauss made sure that their more abstract understandings of political economy were grounded in the everyday lives of concrete persons, thereby lending to field research the power of general ideas. We have seen a sharp increase in anthropological research on capitalism.  Anthropologists have done a good job of showing that ‘free’ labour is always embedded in many kinds of identity outside the work place, and that even the most impersonal financial markets are in fact mediated by particular persons. Some of these people are greedy, for sure, but not necessarily any more so than others; and they can change. A hedge fund manager like George Soros may become a philanthropist and critic of capitalism. So the main issue is not self-enrichment. The problem is that anthropologists have largely left the global effects of an unequal distribution of wealth, the class conflict between rich and poor everywhere, to other branches of the academic division of labour, especially to the economists.

Mauss and Polanyi point to the missing link between the everyday and the world at large. An unblinking focus on distribution at every level from the global to the local reveals how the social consequences of political economy and how it is understood by those who make it are all part of one and the same social process. The current crisis renders this insight particularly visible, since it challenges contemporary financial ideas, while its tangible distributive effects are felt and feared throughout the world. We are witnessing a power struggle of potentially awesome consequences. Each political response to the latest economic calamity evokes the spectre of the Great Depression and its bloody aftermath.

Money in capitalist societies stands for alienation, detachment, impersonal society; 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 (home). This institutional dualism, forcing individuals to divide themselves every day between production outside and consumption inside, 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. We have reviewed a tradition of work on money in economic anthropology, now represented by a flood of ethnographic investigations into the workings of Western capitalism. But none of this recent work on Western capitalism matches the discoveries of Jane Guyer (2004), patiently excavating from three centuries of African history and decades of fieldwork a model of indigenous commercial civilization that alters how we think about money everywhere.

Now that we are more used to working in the capitalist heartlands, economic anthropologists must still aspire to knowledge of comprehensive geographical range. If some have focused on commerce sui generis with its own specialist middle men and advertising agencies, others have shown that modern corporations have gone far beyond such specialized compartments in their drive to control all stages of the economic process from research and development, through production, regulation, distribution and marketing to household consumption (Applbaum 2004). An economic anthropology that limits itself to ethnographic studies of stockbrokers or traders will never grasp this level of humanity’s shared economic predicament.

 

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