Marina Del Rey, August 2007

KH: There are quite profound similarities and differences between us. My version of the dialectic is that, if we want the quite significant differences to remain under control, we have to establish a framework of sameness to start with, because I really think that we’re very different in style. So I would like to start by trying to establish how some of the questions that we’re posing are the same or similar, how we came to invest so much in the study of money as anthropologists.

BM: There is one similarity that struck me in reading all your work in advance of this meeting. Both of us refuse, as you put it, to demonize money. There’s no reason why it can’t be remade anew by us for some other ends. I’ve been very frustrated by the anthropological literature. It often presents a familiar story: capitalism comes to town and then all of a sudden all that is solid melts into air; things fall apart. It’s the end of the world. And we know what happens: the story is written as if we already know the end of it: dispossession, exploitation, wealth will flow up and so on. On the one hand, yes, that’s what happens. But on the other hand, if we say that it is what always happens when there is the kind of monetization or commoditization associated with “capitalism,” then we’re never going to see the unintended effects of it when they are right in front of our noses.

K: I agree with that. It’s also closely linked to the history of the 20th century. That position leads to the abolition of money and markets or their marginalization and to the establishment of forms of control, authority, and organization that I don’t like.

B: Right, the market is a wonderful example of ungoverned space; I believe that is worth something.

K: Also, in terms of method, each of us ranges very widely for examples, inspiration and anecdotes. But each of us, in our different ways, is trying to reform anthropology as a project.

B: Yes, I was struck by the amount of attention you devote to anthropological theory and method, and how money necessitates your reworking of those things. If we really want to contribute to a Kantian philosophical anthropology and to the creation of a new world society, as you suggest we should, we must reformulate the methods, objects, and theories.

K: I’m giving a lecture in Milwaukee in early September, which is going to be my most general formulation of all this. It’s called “Toward a New Human Universal, Rethinking Anthropology for the 21st Century.” I’m coming closer to a kind of philosophical humanism or to anthropology as a strategy that people from many disciplines could contribute to, if they felt like it, than attempt to reform academic anthropology as it has become in our time. In many ways, anthropologists are the least likely to respond to my message given the kind of choices they’ve made. So I am asking what a Kantian anthropology might be if we detached it from being necessarily an academic discipline.

Money and political education

B: You’re much more hopeful on the democratization of money than I am.

K: Oh, I’m not really.

B: Well, you pretend to be.

K: Yes, exactly. It’s a story. People often say to me, why are you so optimistic? And I say I’m not optimistic. I just think that people should be willing to think about possibilities. For example, I have been a fan of alternative currencies since I first heard of LETS and its inventor, Michael Linton, in the mid-80s and even more after I later met him in Manchester; but I have also been impressed by the power of existing paradigms of money that people are caught up in, largely without knowing it. This is a serious obstacle to their widespread acceptance. I think that your discussion of Ithaca HOURS got at that. One of the reasons I wrote the persuasion paper was because I was thinking about LETS. Linton, as an engineer, has brought immense creativity and dynamism to developing systems that are suited to the digital age and are scalable, but I had doubts about his attempts to persuade people that they’re feasible, when we worked together. So I wrote the persuasion paper to argue that Smith and Keynes succeeded to some extent because of their understanding that this was a rhetorical exercise before anything else. The most systematic things that Keynes ever wrote were to gain formal credibility within government and the profession of economics. I have become increasingly interested in community currencies as a form of political education, but then I think of myself as a teacher more than anything else.

There was a time when I was more sanguine about the immediate prospects of a breakthrough with these community currencies, but I now feel that, whatever the chances of their really taking off, they also act as a form of limited political education for those people who are open to them. In my lifetime, these approaches may or may not actually change economic conditions for very many people. It is interesting that so far they have had less success in the poorer parts of the world that need them most. It’s a bit like generic medicine. The world needs these things, but Big Pharma gets in the way. So I find increasingly, although I still write within an optimistic frame, that I actually detach the exercise from any concrete political ambition — all I’m doing is inserting a certain way of thinking into the long human conversation about a better world. I have no idea who’s going to take it up when, how, or what they’ll do with it.

Locke , Marx and the rest in the end changed the way we think, not the way we live. This may be an age thing, but I feel that I’ve always been engaged in society with some sort of political aspiration. At this stage all I’m interested in is writing, in excavating some part of what I only half know and making it more solid bit by bit and sharing it with people in a form that could enter the conversation. I don’t know how, when, with what consequences.

B: The optimism is part of what is so appealing, because that’s what makes the writing seem so fresh. So few people are willing to give any kind of optimistic proclamation about the future or what we could do now that would make the future better. So, while the optimistic tone of some of your writing may be irritating to some, I think it is irritating in a good way.

K: No, it diminishes the impact of what I say. The currency of politics is power and its means is passion. But if the politician neglects reason he’ll lose his audience. And equally, the means of science is reason, but the best science is still the enthusiast. And so, if I give the impression that I’m stupid by being over-optimistic, then I might turn away people I might otherwise engage.

B: Let’s explore this idea that LETS or other new currency systems are a form of political education for the people who have worked in them. I think there’s something there to think about. What would happen to the analysis of alternative currencies if you imagine them not as things that will replace existing money or will even merely supplement other currencies, but as classrooms or momentary, temporary, autonomous pedagogical exercises. They may then take on some other functions besides money politics, but, you know, political education broadly. A lot of the literature is: Do alternative currencies “work” or not. But asking after their pedagogical function brings forth new questions.

The standard questions are: Do they draw more people in to help them meet their needs? Do they draw more people into the market and thereby erode their own emancipatory potential? Or do they just run out of steam because people don’t like feeling indebted to other people? Right? But no one ever really asks just the basic interview question, “what did you learn from doing this?”

K: Peter North’s Money and Liberation is good on this.

B: North also writes about how people would say that they enjoyed participating in a LETS system at first, but then they sort of didn’t, they didn’t like the feeling of being indebted. Right? They didn’t like to have other things done for them because then they felt like they owed and they didn’t like to feel like they owed. So, trading gradually falls to zero.

K: Well, that’s not a universal phenomenon, but it is one of the psychological problems that have to be overcome. Some LETS schemes also fold because some people acquire unredeemable surpluses, which they will never be able to offload because people drift away. Perhaps this is related to feelings of indebtedness. But the bigger problem is with conceiving of a LETS system as a stand alone operation, like a national currency; and that is why Linton has put so much effort into the technology of coordinating multiple currency systems, for example employing smart cards that can register transactions on up to fifteen currencies at once.

B: Well, this is why people end up with surpluses, too. Because I end up hoarding my credit instead of spending it by asking you to paint my fence. I don’t ask you to paint my fence because I think, oh, I don’t wanna feel like I now owe Keith something ‘cause he painted my fence. So I’ll just hold onto my credits.

K: Getting back to the issue about political education. I spent two years with Michael Linton. Sometimes physically, but mostly on line. I began to feel that he was putting all his energy into developing the best possible system. My role was supposed to be disseminating the results as a writer and this made me focus on the sometimes unacknowledged handicaps that people promoting LETS have to overcome. And one of these handicaps is the absolute dominance of the nation-state as the stand-alone model for forming a society. There is also the deep investment that people have in the notion that money is unchangeable.

I was a professional gambler for a number of years, and I sometimes made the mistake of trying to explain to people how I lived from scientific gambling. But the only story they wanted to know about gambling was that you lose. The only winner is the bookie. And even the way that they gambled was guaranteed to make sure that they lose, so that they would then inevitably have to go back to work and accept the system. And so, it seems to me, that just by entering a currency experiment, as a form of political education, people get to argue about what form the money should take, who should be “in,” what is its relationship with the national currency? What are the pros and cons? Should it be scrip? Should it be something else? But, because these things are usually conceived of as stand alone and local, what happens is some kind of micro nation-state, they end up being like every other similar organization in which a few people put in a lot of time, argue about the minutes, so that the whole thing becomes a kind of parish politics and most people get alienated. And people who entered them with real economic purposes realize in the end that it’s just a kind of show. But Michael Linton has also put a lot of effort into bringing people in through games.

B: Existing games or ones that –

K: No. Developing games that teach people what they can do. He has something called LETSplay where people trade in a mixture of community currency and national money. He was the first to bring my attention to Second Life and all these other online worlds. He is also entering into a lot of forums now, with people like Dee Hock who invented Visa and others who are working on the Identity Commons initiative.

Everything that we’ve said today points to a sense we have that the world is more malleable and thought is more malleable than most of the pros are willing to accept. And that we have to find ways of bringing them together that’s more effective.

B: What really emerged for me most forcefully in your more recent pieces is this effort to do philosophical anthropology. You write about amplifying ethnography to speak to world society. I link that up directly into the work of money. This is where the work of persuasion comes in too. This probably brings us to the pragmatic work of language and money in making that society.

K: What struck me about your work was the recognition that it was all one thing somehow. That the story, the analysis, the money, the society, whatever — in the end we’re working out a very limited number of paradigms. And what you have clearly defined yourself by is the need to break up a particularly rigid version of these paradigms. This brings us to the issue of pragmatism.

Pragmatics of Money

K: So tell me what you think about pragmatics.

B: What do I think about pragmatics? Well, first of all, it’s always important to remember the distinction between Bourdieu’s practice theory and pragmatics. Bourdieu’s theory of practice is still aiming to help us get a more adequate representation of reality. This involves my whole issue going back to Mark Shell of the relationship between money and many of our standard analytical procedures or vocabularies, which derive from the attempt to weld words together with things. When I think about pragmatics, in contrast, I think about the American tradition. Peirce, James, Dewey, Holmes. There, the question isn’t so much, can knowledge be devised to gain an adequate representation of the world, but rather, can knowledge help us approach or approximate a target to get something done that we’re trying to do. And it doesn’t really matter if it’s true or not. It just matters if it works.

K: Yes.

B: For me it was a huge breakthrough to realize that I could think about money in those terms. That I didn’t need to solve the problem of money’s representational failure or adequacy, which is what so many money people have talked about. Just about everyone who writes on money has worried about this problem even if only a little bit. You don’t worry about it at all. It’s refreshing.

K: This is one of the reasons I like Kant, for example in relation to mathematics. One version of mathematics says that the number system we have in some way represents the world. So, if we meet aliens from the same universe, they would end up coming with the same number system because it reflects the same physical reality that we all share.

Now, Kant says that science grew out of cooking, you know, metals and fermentation, and really it’s a series of recipes. The recipes either do the job or they don’t, but they do within a range of accuracy. So we’ve developed a system of numbers that helps us to manage the world within the degrees of error that we’re prepared to accept or not. For that reason, our number system is likely to be local and there’s no reason at all why aliens should have the same system of numbers we do at all.

I have a way of cooking curries which is based on two axes. One is from hot to cold and the other is fruity to musty. And I combine these axes into a kind of color continuum from gray through brown and yellow to red. I mix a kind of curry powder to try and produce the effect I want. It works incredibly well. I also have the same attitude to theory, which is that all theories are good for something. The thing is that their protagonists usually think they’re good for a lot more –

B: For everything.

K: They claim a lot more for it. And the task is really to find out what they’re good for in combination with other theories that fill the gaps. Kant’s anthropology from a pragmatic point of view is saying, what do we need to know about humanity as a whole that will enable us to live as world citizens? In his method, he makes it clear that thinking about world society has to be anchored in something much more immediate. He’s also aware that a lot of what he’s doing is out of reach during his own time. I mean he knows that the world is in the middle of the Napoleonic Wars and it’s forming coalitions of states and shutting people down in all kinds of ways, but he still feels that it’s possible to imagine what we might be.

B: This is the impetus of the American pragmatists after the Civil War. Menand’s book describes this beautifully.

K: I loved that book.

B: Especially his discussion of the connections between American pragmatism and American anthropology. And it links up with the money stuff. I am drawn again and again back to the greenbacker/bullionist debate after the Civil War. I would like to write it not as a tale from the history of representation, which is how it’s often done, but as one of the history of the resolution, or temporary resolution of the pragmatic problem of the money supply. This may be more like the way an economist would tell the tale. I don’t necessarily want to tell it as an economist would, but I do want to put the brakes on the kind of culturalist semiotic thinking that takes over when we think about money’s substance, you know, paper versus gold versus whatever.

K: The demon of mimesis or representation is something I never had to slay for some reason. I don’t know why.

B: That’s British social anthropology. It’s remarkably free of all that “culture and symbol” stuff that Americans have to deal with all the time.

K: I’ve never had to deal with that. I never thought it was anything else than us making stuff up.

B: In my Annual Review piece I try to kind of do some brush clearing. There is a lot of work in anthropology about money but it’s rarely by people who actually study money. Instead, it’s done by people who want to talk about money as a side interest to their main concern. So someone is studying socially responsible investing somewhere. Efforts to create micro credit somewhere else. And often people will just throw out a few one-liners about how we all understand that money is just like language. I want to stop and say, well, no. We don’t all understand that. What do you mean by language? Is language just a system of representation? That’s how you’re treating it. But language also is a series of speech acts. It does work. It doesn’t just represent things.

I like your phrase about can there be a grammar of uses for money.

Money, Payment, Personal Credit and Rank

B: There are a couple of things we haven’t talked about yet. One comes out of the idea of money as personal credit. I like to think about the relationship between money as personal credit and money as unit of account. In a sense, they are the same thing, because the money as personal credit is a way of accounting for it. And money as unit of account then gets us into that discussion about states, Geoff Ingham and all that, which I’m not that interested in. This recalls the classic functions of money as means of exchange, store of value, measure of value, method of payment, and unit of account.

The one I’ve been interested in lately — not so much for rethinking money, but as a way of taking stock of what’s out there in the world that we tend not to see or pay enough attention to — is money as a means of payment not tied to markets or exchange in markets. This comes out in Jane Guyer’s work as well. She has a few lines in Marginal Gains about fines, fees, penalties and those sorts of things, payments that are an important part of exchanges, but strictly speaking to one side of them.

K: She also talks about it in relation to oil prices, as well.

B: Right, oil prices and taxes. I’m interested in taxes and things like that as well. Or the relationship between taxes and fees. Taxes are often talked about as fees for use, fees for service…

K: Or your Islamic mortgages, rent, markup… I have a great anecdote. I was at Yale for a number of years and I did a sort of amateur ethnography of the economics department there. I used to go to the seminars that they gave and I was very interested in how they oscillated between abstraction and conversation. There were two registers. One consisted of indifference curves and quadratic equations that they stuck on the board. And the other was kind of a barbershop economese when they talked in a vulgar way evoking the common man. I discovered there was a marker between these registers, which was “story,” the invocation of the word story. So the guy is doing this abstract analysis, and usually some quite senior professor says, the story you’re trying to tell us is… and then he would shift into barbershop vulgarity. Anyway, I went to one seminar I had seen advertised and the only people there were a few very senior guys – Tobin, Brainard, Arthur Okun who visiting — and a couple of graduate students who probably made the same mistake I did. They were talking about price in microeconomic theory and Okun suddenly said, “Forget about economics. Price is always costs plus a markup and the mark up is usually a convention.”

B: That’s amazing. Payment is interesting to me too because much of the work in anthropology and elsewhere in finance focuses on exchange and global flows. But when I think about the tax haven economies in the Caribbean, so much of that is not about exchange. It’s about parking money and hiding it and trying to avoid payment. Massive sums are moved around the world all the time, not for the purpose of exchanging anything at all, but for simply paying and avoiding paying.

K: I’ve learned a bit about private banking because my wife is from Geneva. It’s a mafia and they say, We don’t care who you are or how you got the money. You can leave it with us and most of it will be there whenever you want it. But in the meantime, we’ll take our cut. Don’t even talk about interest on the savings or any of that. You pay us to keep your money in secret and for it to be there, most of it, whenever you want it. That’s all they do.

So yes, I’ve always been interested in payment too. What is so great about the early anthropological part of Keynes’s Treatise on Money, is when he is setting up the distinction between money proper and money of account and he starts talking about the symbiosis between markets and states. In the end states are needed to make money lawful in some objective way and they need their cut for their own finances. I agree. Like Jane I guess — maybe because we come from the same background — I have always been suspicious of the reduction of money transfers to a model of exchange. It is the core of what I don’t like about economics, the assumption that it is all they can talk about. It also lies behind my reluctance to embrace equivalence as the main function of money. In a curious way, it all comes from Radcliffe-Brown who manufactured a set of metaphors to sell his natural science of society. These were taken from the corporate state and a certain idea of market exchange. He insisted that the essence of exchange is equivalence and it isn’t. I grew up in a Manchester slum where the police were on the take and local shopkeepers had to leave bribes on the doorstep overnight. People were being worked over by the cops and by all kinds of scams. I always had a mafia vision of how the economy works, as a sort of taking. I see what the powers do with mobile people, with people in cars in a state like California, with 24-hour parking meters — if you’re on the move and you need to stop, we’re going to get you.

B: This all also goes against the idea of a frictionless market, which is shared by proponents and critics alike, whether the latter realize it or not.

This implies the question of equivalence. I am interested in the homology between anthropology and money in that both seek to make commensurate incommensurate qualities. They both seek to bring into equivalence things that aren’t that at the start. So money allows me through the mechanism of price to convert pigs into apples and anthropology allows me to convert through the mechanism of ethnography New Guinea Highlanders into English people or something, to make that connection.

K: That’s true at one level. Yet, your emphasis on equivalence has never struck me as being as central as you make it. What you really want to talk about is the opposite of that, the long history of the separation between “idea” and “reality” and so on. In the article I wrote for Carrier, I pointed out that Alfred Marshall developed the notion of spheres of exchange. Nadel took him up in Black Byzantium. Marshall rejected the idea that money necessarily reduces cultural difference to an equivalent. I said that, if you ask a Brit how many toilet rolls makes a BMW or how many oranges gets you an education at Eton, they would say these are not equivalent; in other words, even in societies that have been thoroughly commoditized for as long as we care to remember, the operations of money don’t necessarily entail the subversion of notions of cultural rank.

B: Your example is a very British one, of course, introducing relations of rank, so that it isn’t just oranges to education, but oranges to a very particular kind of education that marks one as a person of rank.

K: What Nadel took from Marshall was that there are subsistence goods and values, luxury goods, and goods that express the highest values of society. And that it’s quite difficult to convert across them. It’s not just that people would find it culturally insane to ask how many oranges buys you an Eton education. An East End orange seller would never get his kid into Eton. So mechanisms for maintaining differential rank often subvert the equalizing effects of money. I agree that equivalence is an important issue, but I have never made it central to my own understanding of the operations of money.

B: For me, equivalence really is a way into the issue of quantification and calculation as well since it is a mathematical operation. It helps me think about the work of numbers more clearly.

K: Your treatment of the zero in algebra is clear and powerful. You talk there about King Lear which has been formative for me in a different way through CLR James, who was preoccupied with the play as the culmination of Shakespeare’s concern with the future of the Tudor state.

I’ve been doing statistics all my life, teaching statistics. I’m very interested in similar questions and that’s one reason I responded so positively to your article on ‘uncanny exchanges’. I’ve also been interested in the rise of probability theory, the whole period summarized by Hacking, in scientific modernism and the non-linear mathematics of complexity. I have been impressed by how you were able to make this subject your own in writing, as I don’t think I have. But, as you may have noticed, recently I had this kind of revelation from reading Oswald Spengler.

Spengler treats the zero and what he calls the algebra of the Magian Arabs as secondary to Descartes and the construction of points in abstract space. He sees that as crucial in the transition from classical Greek geometry to modern mathematics.

B: And this is the distinction between magnitude and function.

K: But I am still more or less reduced to giving potted summaries of Spengler. Maybe I am just beginning to incorporate his thinking into how I write myself.

B: Spengler’s notion of magnitude has resonance for me with Jane Guyer’s recent work on different kind of numbers and numeracy in the use of money to demonstrate rank. She has these wonderful examples of the intersection of interval scales of number in ordinal and nominal scales. So adding a ‘dash’ to a volumetric measure when you sell to somebody of higher rank shows how that interval measure can be backed up by a nominal measure of rank.

Dialectics

K: We share a tendency to take what have often been represented as stages in history or as a dialectal contrast and show how they operate together in a variety of ways.

B: It’s as if they’re both there, but one so-called evolutionary moment comes to the fore and then, at another moment, it gets backgrounded and a different one comes to the fore. To me, it’s that alternating temporal flow that gives you monetary alternatives. They’re not so much opposed to each other as that they are operating out of phase with one another. So in old science fiction movies or Star Trek there would be characters that somehow get thrown into a different time and they’re there but they can’t interact with the other people who are there. But every so often their cycles connect and they have a minute when they can talk to each other, but then they’re in their other temporality again. That’s what these monetary alternatives are like. They’re not so much “other” as on a different temporal cycle.

K: I think what one does change is the dominant model, the ideology. It’s a Maussian idea that, although capitalism pushes an extreme version of impersonality in exchange, this simply disguises or makes less visible the other elements. I also want to go back to Jane Guyer’s book, which I read when it was first submitted. I saw instantly that hers was a vision of ethnography as revealing something that we never saw before, what Raymond Williams calls the realist project to make visible classes that were previously invisible. In my teaching of statistics I have always tried to explain the difference between nominal, ordinal, and continuous variables. She can put them together in complex and manipulative social situations. Readers would see something there that they recognize, but at the same time they understand that they haven’t seen it before.

B: And it’s a brilliant way of showing that money can do rank. Money doesn’t have to be homogenizing and a source of equality for people in the marketplace. They can express through it very fine gradations of social status.

K: This was what Mauss was going on about in that long footnote to The Gift, where he says, in response to Malinowski’s claim that kula valuables are not currency, well, that depends on what you mean by money…

B: Exactly.

K: I got from Mauss the notion that markets and money extend social relations and therefore, the archaic gift is a prototype of pushing out the boundaries of society.

B: There may be a difference between us here, which your emphasis on making world society has got me thinking about. You are interested in how money extends relationships outwards. I’m also interested in how they can get cut off. Jane Guyer uses metaphors like knots. People can also get stuck and it can be productive to focus on how society gets made by drawing distinctions and boundaries. Marilyn Strathern talks about this as well — cutting the network and so on.

K: That’s true. Jane and I have corresponded at length about this. A focus on knots and being stuck reflects a choice of method, which is to see how things cohere at a level nearer the ground. This has to do with some kind of dialectic of freedom and non-freedom. After decades of being locked into a Marxist or social democratic agenda, I have spent most of the last ten years trying to locate my thinking and writing within classical liberalism.

B: I was trained within a political economy framework, and my mentor in graduate school was Jane Collier. She wrote Marriage and Inequality in Classless Societies influenced by Weber and Bourdieu, as well as the structural Marxists. She was asking after other kinds of systems where the Marxist dialectic cannot hold without the modifications made by other feminists, which focused on how difficult it is to force what we call kinship into modes and relations of production. Her work drew me to feminist theory, to thinking about Marilyn’s agenda with the gift, and to feminist political economists like J. K. Gibson Graham.

They have the same kind of concern that Michel Callon has, although they don’t use the same analytical vocabulary — that by describing something as capitalism, we unify phenomena that maybe aren’t as unified as the analytical model would suggest. We give capitalism with a capital C a power to move and act in the world that it didn’t have before our analytical engagement with it. My problem with Marxism has always been that first of all, it stabilizes and solidifies what it sets in motion dialectally; but then second, that there are no surprises.

K: That’s what makes it a kind of secular religion. It’s the sleight of hand on verb tense, which allows scientific socialism to extrapolate from knowledge of history to the future in a reliable way. So the whole point is no surprises. Both of us agree that the greatness of Marxism as a method is that it requires the investigator to place himself in what he’s writing about. Why me, why you? If it is possible for us to do something new, why now?

The Flow of Ethnographic Knowledge

B: In my undergraduate anthropology of money class, I give the students an essay topic, which is basically “Marx equals Aristotle plus Locke. Discuss.” This gets to another interesting theme in both your work and mine. I don’t think there is a similarity or difference here. I just think it’s something that we each grabbed a hold of and it’s something that I really want to try to grab hold of more in the future, and that’s the distinction — you put it nicely in one of the papers — between making it and taking it, between making money and taking hold of money as it exists and doing other things with it. You say somewhere that Viviana Zelizer emphasizes taking it, but you’re interested in making it as well. This has been a puzzle for me. I’m very interested in the taking part. I have a collection of monetary objects that people have modified in various ways. To me this kind of activity speaks to the pragmatics of money, not its dialectics.

K: There is on the one hand a supine passivity in the money system where people don’t “do” anything with money. Then there is what you say they do with money, which I see as embracing Zelizer and Bloch and Parry. I don’t see this as simply taking money. All of us – observers and participants – are possibly reacting against the Marxist dupe theory — that capitalism has all the power and the rest of us can’t do anything.

B: Except what we’re “supposed” to do.

K: And I invented the idea of the informal economy as a way to emphasize that people do in fact do things. Even though they’ve got next to nothing, they are not going to sit there and do nothing.

B: It’s also a reaction against the economists who say that money is just neutral.

K: Yes, they all deny human agency in the economy. Anthropologists and many sociologists are very good at showing that people are active in many ways, making conditions that are not simply given to them. I would not describe this as merely taking passively. It is Mauss’s point also. He was saying that there is much more than you think at stake in what people are doing with other, making society, even in capitalist France in the 1920s. The non-contractual element of the contract.

But I don’t merely want to show that anthropologists know that people do things that the economists and Marxists don’t know about because they are invisible or considered to be secondary. When I first started talking about informal economy, the economists said people were just taking in each other’s washing. The economists have phrases for what’s missing — domestic transfers, charity or whatever. I want to take them on on their ground. I spent two and a half years in a slum in Accra and I wrote my thesis. At the end of it, I really think I understood, possibly better than most of them, how they made the street economy. But what I didn’t know was why the world cocoa price collapsed while I was there, why there was an army coup based on the economic recession that resulted. There were all kinds of things that I knew as little about as the people on the street. So I took up development, going to the West Indies and all those other places because I had to do ethnography at another level of society in order to be able to take on people who operated easily there and who could dismiss what people like me found out. Self-organized activity, whatever form it takes, as anthropologists and sociologists study it, has to be the basis for whatever comes next. It’s not that we’re just going to say, oh, by the way, we’ve got a new recipe for you. We have to build on what’s here. What I’m interested in is how we can extend our influence professionally, as well as politically. That’s why I’m so much involved in this problematic of extension — I’m trying to extend the reach of what anthropologists feel comfortable in talking about.

B: You posed a question by email about the extent to which work that is going on, say, in the anthropology of finance gets out there to the people who are doing finance. Some of what we’ve been doing is the standard anthropological trick of saying that what you think is your rational economy we will show you is mystical religion. So you see some of that resonating here and there in the media or in new approaches to economics, where people are motivated in their economic choices by other things besides rationality and self interest. So perhaps anthropology is being heard to some extent. One thing that always surprises me is how many media inquiries I receive about money. Usually they want some cute anthropological nugget to put in their story. About how economists don’t have all the answers and we don’t know what’s going to happen with the world markets, so maybe we should look again at things like religion — belief, fear, all this other supposedly irrational and emotional stuff. And usually it gets psychologized by people who can’t so easily pick up a cultural or social explanation.

But I also think that we need a little less hubris and more humility. Academics take themselves way too seriously and anthropologists probably are the worst offenders because we think that we really know how things really are because of our position “with the people” or “from below,” and sometimes I think we need to just stop a minute and say, well, what are the people really saying? What are they really doing? Instead of forcing them to say what we think they ought to say.

K: It’s also the case that anthropologists have ended up speaking only to each other, like economists. I mean how did that happen? The anthropologists have devised a discourse that makes no impact on anybody else.

B: I am not sure I agree. It may have an impact we are not aware of all the time. Things can have an impact that we don’t know about. That we can’t know about. Especially in a public university like the University of California, where I teach thousands of undergrads, who knows where a little idea I put in their heads will go? I do have to believe it will go somewhere. When that student becomes an investment banker or whatever they end up doing, it has to go somewhere.

K: I went to the World Bank last year to give a keynote at a conference on informal economy. And I also did a brown bag lunch on Africa for the Africa section of the World Bank. They got a thousand responses to an email message and they ended up closing down the elevators when I had an audience of 200 people. They were from everywhere: State, Pentagon, IMF. I gave an improvised speech and it was one of best speeches I’ve given in my life, because there’s nothing I like better than dealing with people of this kind. In my view they’re all schiz, that is, every one of them is an idealist and a cynic at the same time. On the one hand they still nurture some sense of making a better world, and so on, and so I play into that. And then they go away and run a motorway through a slum in Nairobi, or whatever they do for a living. And what I’ve noticed is that they indulge me as a kind of court jester because I feed the side of them that doesn’t normally get heard, but when it comes to doing real office politics, they just leave me out. After this last event at the World Bank a guy from the Pentagon called me. He said, you want coffee? So I said, yeah, why not? And he says, well, you know, you Europeans have taken the moral high ground from us, and the Chinese have taken the manufacturing, and all we’ve got left is the weapons. And I kept thinking about this afterwards. Why would he tell somebody like me something like that? And then I thought, well, because I’m going to go around the world telling everyone that these guys in the Pentagon are ready to blow us all up because that’s all they’ve got left. And I said, shit! This is Nixon’s mad dog routine, you know, as long as everybody believes that we’ll do it, that’s even better than having to use the stuff.

I wonder about the intellectual strategies we both use to reach other audiences. It seems to me that’s one difference between us. It’s obvious from your choice of examples in your writings that you have in mind the big story of our times, but you don’t find it necessary to tackle it directly.

B: Not yet. I don’t feel qualified to tackle it directly.

K: Well, you never will be. That’s the point. What I’m trying to do is kind of excavate a de-racialized or de-imperialized world history that would allow us to give an added meaning to our ethnographic knowledge.

My essay is about the tension between the impersonal conditions of social life and the persons who inevitably carry it out. This relationship is poorly understood, perhaps never more than now, when the difference between individual citizens and business corporations operating on a scale larger than some countries has become obscured. My starting point is a legendary remark made in a movie by a professional killer to his victim, “Don’t take this personal, it’s just business.” But, according to my favorite American dictionary, a “person” is “a living human being” and what could be more personal than taking his life? Perhaps the hit man is referring to his own attitude, not to the effect. Killing people is a matter of routine for him, a “business”. Why should business be impersonal and, if it is, how can that be reconciled with the person who practices it?

Ideas are impersonal, human life is not. So, at one level, the issue is the relative priority to be accorded to life and ideas. Because the encounter is live and therefore already personal, the hit man has to warn his victim (and perhaps himself) not to take it so. It would seem that the personal and the impersonal are hard to separate in practice. Our language and culture contain the ongoing history of this attempt to separate social life into two distinct spheres. This is the core of capitalism’s moral economy; and gangster movies offer a vicarious opportunity to relive its contradictions.

At the heart of our public culture lies an impenetrable confusion of people, things and ideas. We no longer know how to act or in what context of mutual interdependence. The feminists were right to insist that the personal is political. The political too is often necessarily personal. But, if we relied on persons alone to make society, we would be back to feudalism or its modern equivalent, criminal mafias. There must be impersonal institutions that, at least in principle, work for everyone, regardless of who they are or who they know. We have never been more conscious of ourselves as unique personalities; yet the impersonal engines of society lie far beyond our grasp. What place is there for the humanity of individual persons in the dehumanized social frameworks we live by? This is the hit man’s dilemma and it is ours too.

In exploring the historical relationship between human personality and impersonal society, I focus on the institution of private property. This has somehow evolved in only a few centuries from being a source of personal autonomy in a citizen commonwealth to becoming the means whereby a few huge business corporations seek to dominate world economy. Meanwhile, property has shifted its main point of reference from things to ideas; having once been “real,” it is now crucially “intellectual.” This development is related to the revolution in digital communications. Radical reductions in the cost of transferring information through machines have injected a new dynamic into human relationships. The current crisis over “intellectual property” is closely linked to a transformation that is pulling society towards a global frame of reference. Modern corporations rely on extracting rents from property as much as on profits from direct sales; and, as the saying goes, ‘Information wants to be free’, meaning that there is consistent downward pressure on prices for information-based goods and services. The social effort needed to maintain high prices in a world of increasingly free production and reproduction is what drives the conflict highlighted by this essay.

More and more we buy and sell ideas; and their reproduction is made infinitely easier by digital technologies. This has led to a world war, launched by transnational corporations with the full complicity of some governments, to privatize the cultural commons. Across the board, separate battles are being fought, without any real sense of the common cause they share. These concern: music; the moving image; language, literature and law; the internet; software; GMOs; pharmaceuticals; and academic life. The idea of “intellectual property” lends a spurious conceptual unity to what has been described as “information feudalism.” This “culture war” is one aspect of a broader shift in world production from West to East which will only be accelerated if western governments grant their corporations the rigid controls they seek. The central contradiction of neo-liberalism is that this attempt to establish a new kind of global command economy uses digital technologies that favour a more decentralized networked form of society.

From the 1860s onwards the leading industrial countries adopted a system of national capitalism, the management of accumulation and markets by central bureaucracies. Faced with unruly urban populations, big money made an alliance with the traditional ruling classes to secure unequal contracts between owners and workers, sellers and buyers, lenders and borrowers. The problem then and now is, how do you make people pay up? New legal frameworks were devised granting to corporations both limited liability and the private property rights of individual citizens. In its heyday, national capitalism was able to police this confusing situation in the interests of large-scale bureaucracy. But in the last 25 years, transnational society has seen an escalating conflict between the most powerful bureaucracies in the world and dispersed coalitions of networked activists.

My question is, How is democracy attainable unless each of us can determine our own personal responsibility in a world driven by unknowably remote impersonal forces? We need a new humanism that meets the measure of our common humanity. This humanism must work through the impersonal institutions of money and machines, not against them.

The moral dilemma in politics, law, and business

Morality concerns the principles of good behavior, what we ought to do. Although it is possible to express “the good” abstractly as a rule – “always be kind to children and animals” — morality can only be expected of persons who face the choice to be good or otherwise in complex situations that cannot be reduced to simple rules. What politics, law and business have in common is that they define “the good” in a collective sense. A group must be protected from subversion, disorder or loss and this more general good may require leaders in particular to sacrifice personal morality to that impersonal end. It costs too much if people must always be forced to do what you want. It helps if they can be persuaded to do something because they believe it is right. Often that means believing that a leader is a good person. It is not easy in practice to separate the impersonal ends of society from their personal instruments.

When society is organized through depersonalized rules, as ours has been for a century or more, the normative exclusion of personal judgment as a force for good or evil provokes a permanent moral crisis. It is hard to discuss this crisis using the methods of impersonal social science, although that hasn’t stopped some from trying. Here I draw principally on works of fiction, especially movies, since they are designed to give dramatic expression to this very question. But I will also refer to Max Weber’s historical sociology. I start with Company, an Indian film about organized crime in Mumbai.

The crisis of this movie comes when Mallik, the big boss, tries to limit his reliance on Chandu, a young lieutenant he has plucked from nowhere. He delegates a hit to Chandu, the assassination of a politician, that he decides to abort for operational reasons. Mallik moves swiftly to have Chandu killed; but, thanks to the friendship of their women and the mobile phone, he escapes and civil war breaks out, spreading as far as Nairobi. The resulting mayhem fragments the Company and lends strength to their enemies, including the police. Towards the end, someone says, “whatever’s happening is the fault of the business, not one man.” But, of course, the business can only operate with one big boss or it fragments into impotence, as in this case. Chandu hands himself over to the state and tells Mallik. “I am about to do what I think is right. If you suffer any losses, don’t take it personally.” Don’t take this personal, it’s just business. But actually this is Chandu’s attempt to salvage morality from the mess. The hit man’s dilemma is between morality and politics.

Chandu embodies this contradiction. He is a classic individualist, in a long line of American westerns and gangster comic strips, the loner who doesn’t believe in justice unless he does it himself. He considers official society to be as corrupt as he is, but less honest; and in any case he is excluded from it. Chandu meets his match in the clever and basically decent policeman, Sreenivasan. The latter knows the police can’t be effective if they always stay within the law. The law doesn’t measure up, but it is all we have if we are not to be subject to rule by the mob. Morality is what we ought to do, the law is what we can get away with. The lines between official politics, the law and crime are blurred in practice, but the public prefers to believe that they are separate.

One recurrent jingle chants in Hindi “Yes, it stinks, but it’s business.” Gangster movies allow us to see society from outside the self-protective cocoon of law, bureaucracy and business that the middle classes normally inhabit. Moreover, by evoking normal capitalism, the gangster “firm” offers a metaphor for its dark side. Tony Soprano crosses the thin line between hoodlum and suburbanite many times every day. Impersonal society in its official guise can be just as immoral as criminal enterprise, except that thieves have personal lives and morality of a sort, whereas abstract impersonal norms have no room for morality at all.

Company’s series of human catastrophes hinges on an objective contradiction, the one Max Weber identified with patrimonial bureaucracy. The origins of impersonal government lie in the king’s use of palace organization to assert his independence from the feudal barons. He recruits to his own staff individuals who owe allegiance solely to him. But distant officials are pulled towards asserting their own independence of him by their reliance on local resources. If any of his henchmen get too big, they might try to take his place. Relatively stable forms depend on institutional rules for checking this structural contradiction.

Most of Shakespeare’s history plays and tragedies hinge on this tension between human personality and impersonal institutions. How can a holder of high office reconcile his public role with being just a man? If feudalism was a mess and basically unjust, what is the role for human personality in a more equal and universal social system? Is it possible to move beyond kingship and mob warfare to a genuinely democratic society? His Elizabethan audiences sat on the edge of their seats, knowing that the future of their own Tudor state was at stake in the drama. When Hamlet asks “To be or not to be?”, he is posing the dilemma that forces some people to choose to be human or inhuman, personal or depersonalized, often as a matter of routine. Shakespeare dug deeper into this issue than anyone has since. The world has changed less since then than we sometimes think and the dialectic of personal and impersonal agency is just as strong now as it was then. Stories about gangsters, both medieval and modern, remind us that the moral dilemmas of political life have not gone away.

Impersonal society as a modern project

The twentieth century was built on a universal social experiment. Society was conceived of as an impersonal mechanism defined by international division of labor, national bureaucracy and scientific laws understood only by experts. Not surprisingly, most people feel ignorant and impotent in the face of such a society. Yet, we have never been more conscious of ourselves as unique personalities who make a difference. So we experience society as personal and impersonal at once, despite the huge cultural effort that seeks to separate the two. “Business” lies at the heart of the matter.

The hit man lives in a society where normal business often requires the suspension of ordinary humanity – sacking an employee, calling in a loan, evicting a tenant. We might be tempted to take such losses personally, but the carrier of the message is merely an instrument of economic logic, “the bottom line.” We are taught that the payment of money makes a huge difference to a transaction. Why? Wage labour became the norm in nineteenth century Europe. This led to an attempt to separate the spheres in which paid and unpaid work predominated respectively. The first was objective and impersonal, specialised and calculated; the second was subjective and personal, diffuse, based on long-term interdependence. 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 unknowable, whereas the bounds of domestic life are known only too well. This duality is the moral and practical foundation of capitalist economy.

All the efforts of economists to insist on the autonomy of market logic cannot disguise the fact that businesses relations have a personal and social component, particularly when the commodity being bought and sold is human creativity. Where does the social pressure come from to make business impersonal? Weber had one answer: rational calculation of profit in enterprises depends on the capitalist’s ability to control product and factor markets, especially that for labor. 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. 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 is huge. We, who have submitted to this confusing paradigm of division, often accuse others of backwardness for refusing to acknowledge its force. The word we use is “corruption.” But, as Chandu insisted, the rhetoric that separates formal organization from informal practice might well be less honest than an open acknowledgment of their interdependence.

Private property: a short history

The idea of personal agency in market situations is closely tied to that of private property. Private property is the ability of an individual owner to command exclusive rights over something against the rest of the world. We assume that, once we have bought an item, we can do what we like with it. The state secures the market exchange, but in a remote way that does not ordinarily impinge on our consciousness. Private property law was originally seen as a means of protecting individual citizens from the arbitrary power of rulers. But in the last century and a half national governments and corporations operating on a transnational scale have acquired these same property rights. Far from shoring up liberal democracy, private property in this latter guise favors a totalitarianism that requires personal identity to conform to the needs of impersonal institutions. Where did this state of affairs come from?

If a business owes more money than its assets are worth, the original investors are personally responsible for the debt. In 1580, Queen Elizabeth I granted “limited freedom from liability” to The Golden Hind, a ship owned by Sir Francis Drake in which she was the largest shareholder. This meant that, if the enterprise incurred large debts, investors were limited in their liability only to the amount of their initial investment, leaving creditors to pick up the rest. In fact, the returns on this low-risk investment were 5,000 percent and the queen was well-pleased. This business model underlies the modern corporation. World trade was then dominated by the Dutch; so Queen Elizabeth granted a charter in 1600 to the East India Company, a group of merchants and aristocrats based on the City of London. Over the next two centuries this grew to a considerable size without ever losing its close ties to national government.

By the 1770s, however, the company was on the verge of bankruptcy. Dutch traders and American smugglers were by-passing the company’s monopoly to sell cheaper tea to the small businesses supplying the lucrative American market. The Tea Act of 1773 gave the East India Company exclusive rights to sell tea to the American colonies, exempted it from taxes levied on exports to America and granted a tax refund on 17 million pounds of tea then stored unsold in England. This substantially increased the company’s profitability (the King was a major stockholder) and allowed it to undercut the many small businesses retailing tea in America. The Boston tea party was the result.

Thomas Jefferson saw three main threats to democracy — governing elites, organized religion and commercial monopolists (whom he referred to as “pseudo-aristocrats”). It is hardly surprising that he was keen to include freedom from monopoly in the Bill of Rights. But, mainly thanks to his Federalist opponents, that particular clause slipped through the cracks of the constitution. From then on corporations sought to win the constitutional rights of individual citizens for their businesses. This campaign built up momentum after the Civil War, when the railroads were booming. The Fourteenth Amendment of 1868 sought to guarantee the equal protection of the laws to former slaves, by making illegal discriminatory provision of public services. The railroads began suing states and local authorities for enacting regulations designed specifically to control them, on the grounds that this created “different classes of persons.” The corporations could afford to keep coming back to the courts until they won. And eventually they did, in the 1886 Supreme Court decision concerning Santa Clara County vs. the Southern Pacific Railroad.

The railroad was being sued by the county for back taxes, but its lawyers claimed that the company was a person entitled to human rights under the Fourteenth Amendment. There is some dispute over the authenticity of the record, but this judgment opened the floodgates: in the following quarter-century, of over 300 Fourteenth Amendment cases considered by the Supreme Court, almost all were brought by corporations claiming the rights of natural persons, only 19 involved African Americans. Today, if a town wants to protect its small shopkeepers by denying Walmart the right to open a superstore there, it will risk facing an expensive lawsuit brought to defend the corporation’s constitutional rights as a person.

We still think of private property as belonging to living persons and oppose private and public spheres on that basis. But abstract entities like governments and corporations can also hold exclusive rights in something against the world. At the same time corporations have retained their special legal privileges, such as limited liability for bad debts. We are understandably confused by General Motors having the same rights as any living person, while being exempted from responsibilities imposed on the rest of us. This constitutes a major obstacle not only to the practice of democracy, but also to thinking about it, especially since most intellectuals uncritically reproduce this very confusion.

Not only has private property evolved from individual ownership to corporate forms, but its focus has also shifted from “real” to “intellectual” property, from material objects to ideas. This is partly because the digital revolution has led to the economic preponderance of information services whose reproduction and transmission is often costless. As with corporate personhood there is sleight of hand involved. If I steal your cow, its loss is material, since only one of us can benefit from its milk. But if I copy a CD or DVD, I am denying no-one access to it. Yet corporate lobbyists use this misleading analogy to influence courts and legislators to treat duplication of their “property” as “theft” or even “piracy.” It is ironic that the United States, born in an act of resistance against corporate monopoly, should now be imposing the same thing onto the world through an intellectual property treaty linked to access to the American market.

The Digital Revolution

What matters in this world is money, machines and people, in that order. Our political task is to reverse the order. But most intellectuals know very little about any of them, being preoccupied with their own production of ideas. We need a new humanism appropriate to a world dominated by the impersonal power of money and machines. The hit man’s dilemma comes from experiencing the world as a conflict between his inner subjectivity and the objective conditions of his social role. His sense of himself as a good person inside contrasts with what he does outside. Fiction (novels, movies, plays) normally does a better job of capturing this tension than the writings of professional thinkers. Moreover, the audience enters the plot imaginatively in a way that allows for the free interplay of subjectivity and history in microcosm. We want to integrate the inside and the outside, the personal and the impersonal, but the idea of a moral politics combining them often seems unattainable. How is human communication evolving in the context of the digital revolution and does that favor the integration we seek or the opposite.

We all enter this extraordinary time with a bundle of advantages and drawbacks. I take pride in a facility for writing coherent e-mail messages at a pace somewhere between a letter and a phone-call. Yet I also know that communicating through keyboards will soon be replaced by audio-visual methods, thereby removing one more link between the book and the screen. My academic colleagues are still fighting the war against television, refusing to allow one into a living room designed to show off their books. It’s all relative. Face-to-face exchanges, instead of being displaced by telecommunications, take on an added value when we spend the working day in front of a computer screen. Simple pursuits like reading and conversation, which used to be taken for granted when they monopolized our means of communication, can be approached in a more analytical and creative frame of mind, now that there are so many other ways of acquiring and transmitting ideas. I have a virtual office, my lap top, to accommodate a life of movement; but I was forced to recognize the value of my own memory when it was stolen. Each of us experiences the digital revolution in our own way; yet there are changes taking place that affect us all.

The digital revolution consists of rapid changes in the size, cost and especially speed of machines capable of processing information. The world economy is being transformed once more by radical reductions in the cost of producing a basic commodity, in this case the transfer of information. There was a time when commodities traded internationally were things extracted from the ground and services were performed locally in person. Now the person answering your business call could be located anywhere in the world and a growing number of service jobs are exposed to global competition. Vast profits are to be made in entertainment, education, the media, finance, software and all the other information services. But the digital revolution poses specific problems for accumulation since there is continuous downward pressure on prices in this sector arising from the ease of copying proprietary products.

The cheapening of the cost of information transfers affects long-distance market relations. Money was traditionally impersonal so that it could retain its value when it moved between people who might not even know each other. It was an instrument detached from the persons who use it. Bank credit on the other hand has always been more directly personal, being linked to the trustworthiness of individuals. The idea that transactions involving money are essentially amoral comes from its impersonal form, but until recently, in most societies, the bulk of economic life was carried out by people who knew each other and were able to discriminate between individuals on the basis of experience. The transition to impersonal economic institutions came suddenly. People were used to engaging with shopkeepers personally; and each purchase took place under particular circumstances, involving variable price, quality and credit terms, all of them based on the specific relationship between trader and customer. It was a shock to encounter goods identified by little white cards with non-negotiable prices on them. Fixed prices came just over a century ago from the first department stores, where customers dealt face-to-face with assistants who had no power to negotiate. That power rested with owners and managers who were now removed from the point of sale, unlike the small shopkeeper. The main imperative of management was to control subordinates; and this ethos stretched back to the production lines as well as outwards to an anonymous market of consumers whose tastes were manipulated by public advertising.

The era of mass production and consumption may be ending as a result of cheap information transfers. It is now possible to attach a lot of information about individuals to transactions at distance. For example, amazon.com keeps a record of every book I have bought from them and they make recommendations for new purchases on this basis. This is similar to the small bookseller who reserves a book for a favorite customer, but it all takes place anonymously at distance. Some firms are already moving towards a system known as Customer Retail Maintenance (CRM) based on data banks that know no limit in scope. This enables them to target buyers who generate above average revenues. Nowhere has this process gone further than in the market for personal credit. The number and variety of customized financial instruments now on offer is growing exponentially. It is not quite the same as bespoke tailoring, but the trend is to restore personal identity to what were largely impersonal contracts. For many people, this has introduced new conditions of engagement with the impersonal economy. It will be some tim before its social effects are known, but digitized commerce has already spawned a war for control of the value generated by sales of information-based commodities. The slogan of this war is “intellectual property rights.”

Intellectual property

Our world resembles the old regime of agrarian civilization, with unequal power shared between enforcers and rentiers. We are now witnessing the triumph of that “pseudo-aristocracy” of commercial monopolists that Jefferson once saw as the main danger to liberal democracy. If classical political economy’s slogan of free trade was aimed at dislodging traditional feudalism, we have to get our minds around the current situation in which feudal principles are being applied to “free markets” in the name of spreading liberal democracy around the planet.

The phrase “intellectual property” seems to have been invented by Lysander Spooner. He was an old-fashioned liberal philosopher of the sort that flourished in the mid-nineteenth century. If you haven’t heard of him, it may be because he wanted to restrict use of his words without permission or payment. The American civil war buried that libertarian moment of individual creativity and launched a new phase of corporate capitalism that has come to its full maturity in the neo-liberal world economy today. A drive to privatize access to culture has led to a “second enclosure of the commons”. This latter-day enclosure movement also rests on confusing ordinary individuals with highly centralized corporations.

The rise of intellectual property is recent, but its origin lies in the Berne Convention on international copyright of 1886 (the same year as the corporate personhood decision!). The World Intellectual Property Organization was formed in 1967 and n 1994 the World Trade Organization introduced the Agreement on Trade-Related Aspects of Intellectual Property Rights (known somewhat ironically as TRIPs). The enactment of TRIPs is an unprecedented attempt to make US-style intellectual property law mandatory for all countries participating in global trade.

American publishers routinely ignored British copyright from the beginning and the United States was slow to sign international agreements on the subject. It only joined the Berne Convention in 1989! When the Southeast Asian “tiger” economies began their drive for modern growth in the 1960s, they did not respect international copyright, tacitly sanctioning the cheap reproduction of American textbooks that their people could not afford otherwise. With their educational expansion achieved, these “pirates” joined the Berne Convention in the 1990s. But by then the issue had shifted from books to music, movies and software. The US tried out its new recipe for globalization of intellectual property law when Ronald Reagan introduced the Caribbean Basin Economic Recovery Act in 1983. This initiative established the principle of linking trade rules to intellectual property and in the 1990s the USA entered bilateral treaties with many countries enforcing acceptance of TRIPs through the threat of exclusion from the American market. Many countries also signed bilateral treaties exempting US citizens from future prosecution for war crimes. Here then we have the means of a new American empire – military force, mercantilism and intellectual property

The first sector to feel the full implications of the digital revolution has been recorded music. The feudal barons of the industry may have already lost the war against free peer-to-peer exchange of music files. The movie industry is at a more critical stage. Here the main studios have generated huge revenues from sales of video or DVD copies and the Moving Pictures Association has been leading the drive to fight “piracy.” This campaign is technical as well as legal, with machine modification playing a central role in restricting the options of users. A century ago, film-makers went West to Hollywood to escape Edison’s East Coast monopoly. Pioneers like Walt Disney exemplified the frontier mentality of the industry then, lifting much of his first Mickey Mouse cartoon from a Buster Keaton movie without attribution. Now the Disney Corporation lobbies for the extension of copyright laws and uses litigation to protect its private ownership of images and words that would have been in the public domain until recently.

The market for software is crucial to the struggle over intellectual property. Software consists of disembodied machines, recipes of pure information that achieve their effects through a variety of material forms (hardware). Since reproduction of these recipes is virtually costless, their exclusive ownership as commodities is difficult. Even so, the Microsoft Corporation has built one of the great modern monoplies for its Windows system by licensing software whose source code is kept secret from the public. A movement has arisen to challenge this strategy of commercial command and control, Free/Libre/Open Source Software (FLOSS), which is itself divided between those who oppose selling as such and those who accept money payment as long as users have access to the source code and can modify and reproduce it with acknowledgment. These initiatives accept the need for legal protection though such instruments as the General Public License (GPL) and the Creative Commons license.

FLOSS has one great advantage over the monopolists. It can pool the talents of tens of thousands of software engineers, both amateur and professional, whereas Microsoft relies on its customers to discover problems through trial and error. Moreover, FLOSS licenses are less restrictive and this has made open source software attractive to some of the industry leaders. IBM has now embraced Linux and is helping Lula’s Brazilian government to convert the public sector to open source software. Microsoft’s business methods are notoriously predatory, as in the browser war with Netscape that led to anti-trust law suit. Although America still dominates market share, the digital revolution is diffusing faster than any previous communications technology.

The corporations rely on the laws and policing powers of venal governments to maintain artificially high profits and rents in fields stretching from entertainment to the chemical industry. It is questionable whether the USA can impose its own strategy on the rest of the planet. Just as Edison’s monopoly was once circumvented by Hollywood, the contemporary shift of economic power to Asia exposes the cracks in this American bid for empire. It’s an old story, the dynamism of small entrepreneurs versus monopolies protected by state power. The Americans have been there before and their own ideology fuels resistance to the corporate takeover.

The Crisis of the Intellectuals Revisited

Lindsay Waters, humanities editor for Harvard University Press, has claimed that the current explosion of academic publishing is a bubble as certain to burst as the dot com boom. His essay is a warning to academics, in the face of the corporate takeover of the university,

“….to preserve and protect the independence of their activities, before the market becomes our prison and the value of the book becomes undermined…. The commercialization of higher education has caused innovation in the humanities to come to a standstill.”

Publishing, he says, has become more concerned with quantity than quality and “the drive to mechanize the university has proved lethal over the last three decades.” Waters’ jeremiad for the humanities is based on sound evidence, but his analysis of the reasons for their decline puts the blame on money and machines, so that his call for resistance to university administrations has no practical basis in contemporary social and technical conditions. If we want to promote humanism, we should ask what historical conditions make our initiative possible and why we in particular might succeed.

In 1993 Anna Grimshaw and I published a pamphlet, Anthropology and the crisis of the intellectuals. We placed anthropology’s compromised relationship to academic bureaucracy within the general crisis facing modern intellectuals, as identified by C.L.R. James in American Civilization. For James there was a growing conflict between the concentration of power at the top of society and the aspirations of people everywhere for democracy to be extended into all areas of their lives. The struggle was for individual freedom within new and expanded conceptions of social life (democracy) or a fragmented and repressed subjectivity stifled by coercive bureaucracies (totalitarianism). The intellectuals were caught between the expansion of bureaucracy and the growing presence of people as a force in world society. Unable to recognize that people’s lives mattered more than their own ideas, they oscillated between an introspective individualism (psychoanalysis) and service to the ruling powers, whether of the right (fascism) or left (Stalinism). As a result, the traditional role of the intellectual as an independent witness standing for truth had been compromised. The absorption of the bulk of intellectuals into bureaucracy as wage slaves and pensioners not only removed their independence, but separated their specialized activities from social life.

The solution to our dilemmas requires new patterns of social engagement extending beyond the universities to the widest reaches of world society. This in turn depends first on acknowledging how people everywhere are pushing back the boundaries of the old society and second on being open to a universality that has been driven underground by national capitalism and would be buried forever if the current drive to privatize the cultural commons is allowed to succeed.

Waters was right to call for a humanist revival. But this should be through the medium of money, markets and machines, not despite them. In my recent book on money, my first idea was that the cheapening of information transfers as a result of the digital revolution might allow the impersonal economy of the twentieth century to be “repersonalized,” by attaching more information to individual transactions and potentially granting individuals greater control over work, consumption and credit. But I soon realized that a personal economy would return us all to the world of gangsters, both medieval and modern. We need new impersonal norms capable of standardizing social interactions where the nation-state can no longer reach – law, money, education, technology and so on. Our task is not to replace impersonal society with personal life, but to discover new ways of combining them.

The hit man’s dilemma is to be human or inhuman. It is a dilemma shared by kings, generals, presidents and CEOs, when they contemplate the human cost of an action undertaken on behalf of some collective interest. Our ability to curb the high-handed behavior of the powerful has been deeply undermined by a legal culture granting business corporations the rights of living persons. The liberal revolution against the old regime sought to grant free citizens equal (and therefore impersonal) rights in society. This hinged on the difference between individual persons and impersonal institutions. Such a separation was intrinsic to the rise of modern capitalism, as we have seen. But capitalism took a bureaucratic turn in the late nineteenth century, when the legal distinction between real and artificial persons was collapsed. Subsequently the forces moving society became so impersonal that most people lost any sense of their own responsibility for common affairs. This gave some intellectuals an excuse to promote anti-liberal ideologies, drawing on the same confusion of people, ideas and things that was now normal in economic law.

Today the stronger states and transnational corporations ride roughshod over human rights and international law itself in the name of the “free market.” The struggle to subvert this creeping “information feudalism” must take place at many different levels. We might, for example, re-examine the metaphysics of personal agency and the impersonal conditions of its expression. Such an enquiry should be explicitly historical. For indifference to history allows the heirs of America’s anti-colonial revolution to reinvent the corporate monopolies of absolutist monarchy in the name of liberal democracy. If the Europeans can’t see through this, perhaps the Chinese, Indians or Brazilians will.

In John Locke’s terms, we must deal with the semantic criminals who pollute our public discourse with their dissembling words. These are the hired spokesmen of the economic criminals who aim to hijack the machine revolution for their own immoral ends. As for the notion that there is a difference between the operational standards of legal and illegal businesses, well, nobody believes that any more, do they? Yet we also accept the claim that plutocracy is in the general interest. Perhaps it takes a Watergate to explode this doublethink and reveal the dishonest premises of contemporary society.

Conclusions

The formal conclusions of this essay are consistent with late Durkheim. Every human being is a unique person who lives in society. We are therefore all individual and social at the same time and the two are inseparable in our experience. Society is both inside and outside us; and a lot rides on our ability to tell the difference as well as to make a meaningful connection between them. Society is personal when it is lived by each of us in particular; it is impersonal when it takes the form of collective ideas. It is therefore just as damaging to insist on a radical separation of individuals and society (or of life and ideas) as it is to collapse the difference between them. Modern capitalism rests on a division between personal and impersonal spheres of social life. The institution of private property initially drove a conceptual wedge between our individuality and an active sense of belonging to society. Indeed the latter was made invisible or at least unreachable for most of us. But then private property assumed the form of public ownership by large business corporations and even governments. It then became convenient to collapse the difference between personal and impersonal spheres in law, leaving a general confusion between the rights of individual citizens and those of abstract social entities wielding far more power than any human being. The consequences for democracy are disastrous.

Max Weber, writing a century ago in the full spate of a bureaucratic revolution powered by machine industry, saw no social force capable of resisting a highly centralized version of impersonal society. For us, looking back at the twentieth century, bureaucratic capitalism has evolved to a highly mobile form operating on a global scale; while national bureaucracy and its industrial base seem to be an endangered species. Before public bureaucracy is killed off, we need to ask how the hopes it once embodied might be preserved, if only as an institutional alternative to the transnational corporations now dominating world economy. For all my criticisms of corporate monopolists, I believe that some economic functions can only be performed by corporations at this time and that capitalism’s historical mission to bring cheap commodities to the human masses is still far from complete. So progressive capitalist firms can take a leading part in dismantling the resuscitated old regime that calls itself “neo-liberalism”.

The digital revolution has speeded up human connection at the world level. Society now takes a number of forms – global, regional, national and local. We need new impersonal norms to guide our social interactions in such a world, as long as the significance of individual personalities is recognized. The stage is set for a new humanism capable of uniting these poles of our existence. The word “humanity” contains within itself the elements of our predicament and their potential synthesis. It is a collective noun, a moral quality and a historical project for our species. We are still primitives; but eventually we, the people, will make society on our own terms, if we master the means of its development, machines and money. In the course of doing so, we will encounter immense social forces bent on denying the drive for a genuine democracy. My essay has aimed to clarify who the sides and what the stakes are in this struggle for world society.

But there is more to it than class war. Somehow, in the last decade or two, the idea of government has been replaced by public talk of “governance” in acknowledgment that responsibility for maintaining social order has shifted from the nation-state’s monopoly. Even more recently, this talk has taken a distinctly ethical shift to a focus on “good governance”. This means moral behavior on the part of persons holding office and it constitutes a revival of Durkheim’s agenda as a solution to Weber’s gloomy prognosis for the legal rationality of bureaucratic domination. It speaks to a genuine desire to fill the gap between politics and morality left by impersonal society. The remarkable strength of religious feeling in America and its Islamic antithesis is not an anomalous hangover from the past, but rather evidence of the need for meaningful connection when the secular state’s grip on society has been weakened. It was never strong in the USA to start with. If science is the commitment to know the world objectively and art the means of expressing oneself subjectively, religion was and is a bridge between subject and object, a way of making meaningful connection between something inside oneself and the world outside. For a time it seemed that science had driven religion from the governance of modern societies, but the search is on now for new forms of religion capable of reconciling scientific laws with personal experience. Kant’s cosmopolitan moral politics offer one vision of the course such a religious revival might take. It turns out that the hit man’s dilemma contains the seeds of a general human crisis.

A summary of Keith Hart The Hit Man’s Dilemma: or business, personal and impersonal (Prickly Paradigm, Chicago, 2005)

The MetaCurrency Project from alan rosenblith on Vimeo.

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AND NOW: the video!! Click on Read more for a 12-part lecture and discussion lasting about an hour and a half.

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I approach the anthropology of money through four themes:

Money as memory, a meaningful link between persons and communities
Money as idea and object, the rise of virtual economy
Money as ‘heads & tails’, the impersonal expression of states and markets
Money as what people use it for, the potential for economic democracy

Following Marx, I conceive of ‘commoditization’ as a historical dialectic of social abstraction that is closely linked to the rise of money as a universal social principle. If we do things for each other in society, these services have to be separated from what we do for ourselves. This process draws us into ever-widening circles of interdependence based on calculated exchange. The money circuit is becoming detached from production, trade and politics. I ask if the euro is something new or a throwback to older forms. In future people everywhere will issue their own money instruments. Meanwhile, the euro’s movement in history offers a glimpse of where world society is heading. Money is a suitable strategic focus for anthropological study of that society.

Money and method

My first attempt to approach money as an object of anthropological enquiry was a lecture given two decades ago (Hart, 1986). Malinowski (1961 [1922]) set a trend for anthropologists to dispute economic universals in polarised terms, juxtaposing exotic facts and western folk theories, without acknowledging the influence of contemporary history on their own ideas. My lecture had three parts which, taken together, constituted a method.

“First, we should be more explicitly aware of the concrete conditions which stimulate our interest in some abstract problems rather than others. This means asking what it is in the world as we experience it that informs our researches, whether directly or indirectly. Second, it is no good taking potshots at vulgar reductions of economic ideas, when the intellectual history of western economic thought is itself extremely plural, even contradictory. A constructive reading of that intellectual history might have served Malinowski’s ethnographic analysis better than the straw man he chose to attack. Finally, when historical awareness and a more sophisticated intellectual apparatus are combined with our discipline’s standby of ethnographic fieldwork, the resulting anthropological analysis offers a more secure foundation for critical understanding of the world in which we live.” (Hart, 1986 : 637).

So I first located the problem of money in contemporary economic history, arguing that state control of money was being undermined in the leading capitalist societies. Then I traced two strands of western monetary theory explaining money as a token of authority issued by states or as a commodity made by markets. These strands came together in the writings of Keynes (1930). But, rather than acknowledge the interdependence of top-down and bottom-up social organization (“heads and tails”), economic policy has swung wildly between the two extremes (“heads or tails?”). Last I showed that the token/commodity pair could inform a reanalysis of Malinowski’s ethnography.

“Anthropologists have to be capable of comparing their exotica with a more profound picture of ideas and realities in the industrial world that sustains us. Conventional economic reasoning fails to enlighten us because it is so unremittingly one-dimensional. The coin has two sides for a good reason – both are indispensable. Money is at the same time an aspect of relations between persons and a thing detached from persons….Today’s effort is an act of bricolage rather than brokerage, formed from a vision of the anthropologist as a handyman who can help repair the damage done by professionals.” (Ibid : 638-9).

Some anthropologists (e.g. Parry and Bloch, 1989; Foster, 1999; Guyer, 2004) have drawn on this framework for the purposes of a dynamic ethnographic analysis, without embracing world history or the theories of economists. In other words, the academic division of labour still reigns supreme and most anthropologists prefer to stay on familiar ground rather than risk being exposed as naïve interlopers on territory made familiar through common journalism or already colonized by experts.

In Closed Systems and Open Minds (Gluckman, 1964), an anthropologist and an economist explored “the limits of naivety” in social anthropology. They argued that anthropologists, given their pretension to address humanity as a whole, are obliged to open themselves up to the full complexity of social reality. At some stage they must seek analytical closure in order to draw simple patterns from these open-ended inquiries; and these abstractions may often seem to be naïve from the perspective of other disciplines. Gluckman had in mind the rich texture of ethnographic encounters, whereas I was suggesting that conjectural history, overthrown by fieldwork-based ethnography, should be rehabilitated, even if specialists can easily show the naivety of anthropologist’s accounts. Specialization can be an obstacle to the growth of knowledge; for specialists become prisoners of their expertise (Popper, 1997). Anthropologists have long enjoyed a certain intellectual freedom that can be invigorating for the more conventional sciences. We just have to be more explicit about how this comes about.

Foucault (1973 [1966]) ended his “archaeology of the human sciences” with some reflections on why psychoanalysis and social anthropology (ethnologie) “…occupy a privileged position in our knowledge”:

“…because, on the confines of all the branches of knowledge investigating man, they form a treasure-hoard of experiences and concepts, and above all a perpetual principle of dissatisfaction, of calling into question…what may seem, in other respects, to be established.” (1973 : 373) “[They] are not so much two human sciences among others, but they span the entire domain of those sciences, they animate its whole surface…[They] are ‘counter-sciences’; which does not mean that they are less ‘rational’ or ‘objective’ than the others, but that they flow in the opposite direction, that they lead them back to their epistemological basis, and that they ceaselessly ‘unmake’ that very man who is creating and re-creating his positivity in the human sciences. (Ibid:379)

Foucault attributed anthropology’s originality to its being both “traditionally the knowledge we have of the peoples without histories” and “situated in the dimension of historicity”, by which he meant “within the historical sovereignty of European thought and the relation that can bring it face to face with all other cultures as well as with itself” (ibid : 376-7). He was sure the human sciences had reached their limit and this was doubly true of a discipline whose premises were being undermined by the collapse of European empire. Given the disappearance of the traditional object of anthropology, we have to find not only a new one, but also a theory and method appropriate to it. This means identifying the historicity of our own moment, as well as complementing ethnographic fieldwork with world history and humanist philosophy (Hart, 2003).

I propose that the object of anthropology should be the making of world society or the human universal. One name for this is “humanity”, at once a collective noun, a moral quality and a historical project for our species. Another is “the people”, whom contemporary ethnographers have studied assiduously in all their differences, but without much sense of what makes them the same. Anthropology’s object in the nineteenth century was world history, but this became discredited by its evolutionary racism. Before that, the liberal philosophers found speculation about humanity as a whole indispensable to the making of democracy. Kant (2006 [1798]) established “anthropology” as the scholarly name for this project. How might these older traditions be reconciled with the fragmented cultural relativism of twentieth-century ethnography? We should not repudiate the revolutionary principle of joining the people where they live in order to find out what they think and do. Contemporary anthropologists have justly celebrated cultural variety in the here and now; but they have neglected longer term perspectives on human history and have privileged collective norms over the personal experience of individuals.

In addition to drawing on the historical sequence of paradigms for anthropology, I would add the existentialist or romantic quest for understanding how individuals make sense of their relationship to the human predicament in general (Hart, 2003). Humanity is after all facing a highly uncertain future affecting all life on this planet; and we are increasingly aware that each of us is a unique personality with the chance to make a difference. Such a focus could be labeled “self in the world” or “subjects in history”; and it should lead anthropologists to take a greater interest than before in biography, autobiography and fiction.

Each of us embarks on a journey outward into the world and inward into the self. We are, as Durkheim (1965 [1912]) said, at once collective and individual. Society is mysterious to us because we have lived in it and it now dwells inside us at a level that is not ordinarily visible from the perspective of everyday life. Writing is one way we try to bring the two into some mutual understanding that we can share with others. Ethnographic fieldwork, requiring us to participate in local society as we observe it, adds to our range of social experience and brings lived society into our sources of introspection. One method for understanding world society would then be to make an ongoing practice of trying to synthesize these varied experiences. This is to some extent what I attempted in The Memory Bank (Hart, 2000).

I asked there what future generations would consider distinctive of our times and came up with the digital revolution in communications, manifested as the rise of the internet in the 1990s. The half-century begun by the anti-colonial revolution had seen the formation of world society as a single interactive network. How was the digital revolution affecting the forms of money and exchange? I concluded that the impersonal conditions of personal economic agency were shifting in profound ways (see also Hart, 2005).

I had previously written a draft of a text-book showing how anthropologists can and do address the economic institutions of modern society. But I rejected this effort because it was too impersonal. I could not identify myself in it. I based the successor volume on personal memory – on my own teaching and research over three decades and especially on my own encounters with the economy as a gambler, journalist, consultant, publisher and academic entrepreneur. The idea of a memory bank comes from computing; but banks are also where money is kept. I came to see that the two great memory banks, language and money, were converging as information in the internet; and of course the book itself was my memory bank. Soon afterwards I developed this website for the diffusion of my writings under the same name.

There are as many worlds as there are individuals and their journeys. This could be our starting point; but it will not do for the study of world society. For this anthropologists need to enter the objective world of money, markets, digital communications, ecology, cities, population statistics, trading blocs, nation-states, corporations, networks and war, all the while risking exposure of our professional naivety. Making a better society also means using the imagination for purposes of fiction, the construction of possible worlds out of actual experience. Thinking about the macrocosm is made easier through contemplation of microcosms. Novels and movies compress the world into a narrow format that we enter subjectively on our own terms, allowing us to make a meaningful connection with history. In the past, human universals have sought to extinguish or dominate the cultural particulars through which human beings live. The principle of the new universal is, I believe, already revealed to us in great literature. It is that human universals must not just tolerate cultural particulars, but can only be realized through them. Thus, the most creative writers reach general truths by digging deeply into particular places and personalities. This has always been the great strength of ethnography.

The success of British social anthropology in the interwar period derived from the unity of its object, theory and method (Hart, 2004). The object was “primitive societies”, far-flung peoples of the empire encountered in the here and now. The theory was “functionalism”, the idea that customary practices, however bizarre, make sense and fit together, since daily life would be impossible otherwise. And the method, as their successors repeat in an unchanging mantra, was “fieldwork-based ethnography”, joining people where they live to find out what they do and think, then writing it up in universities back home. Even if I consider that anthropology has one ultimate object (to study and help create world society), I have been compelled to make a virtue of being methodologically and theoretically eclectic. Like many of my contemporaries, I have been drawn into the long struggle to reinvent our discipline in the face of post-colonial realities. Studying money has become for me the object and means of this re-invention.

The anthropology of money: some themes

(a) The meaning of money

The word money comes from Moneta, whose temple in Rome was their mint. 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 one’s recollection”. For the Romans, money was an instrument of collective memory that needed divine protection, like the arts. It was both a memento of the past and a sign of the future.

Money’s prime function could thus be said to help us keep track of those exchanges we wish to calculate. But a lot more circulates by means of money than what it buys. Money conveys meanings and these tell us a lot about the way human beings make communities. Money expresses both individual desires and the way we belong to each other. In this it resembles language, the other great means of communication (Hart, 2007b). How do meanings come to be shared and memory to transcend the minutiae of personal experience? Memory was central to Locke’s philosophy of money (Caffentzis, 1989 : 53). For him property belonged to a person who made it his own by performing labour on what nature gave humanity in common. But for a claim on property to endure, that person has to remain the same; and this depends on memory. So money helps us to stabilize personal identity by holding something that embodies the desires and wealth of all.

Communities exist by virtue of their members’ ability to exchange meanings that are substantially shared between them. People must understand each other for practical purposes. And that is why communities operate through culture (meanings held in common). Money is an important vehicle for this collective sharing as well as for the differentiation of individuals by wealth and status.

Communities operate through implicit rules (customs) rather than state-made laws. In the nineteenth century, few believed that the state, an archaic institution of agrarian civilization, could govern the restless energies of urban commercial society. Accordingly, “primitive” communities were studied to throw light on the task of building modern societies along democratic lines. After the First World War, the modern state was seen as inevitable and small-scale alternatives became irrelevant. But now large states are in disarray. The word is out for devolution to less rigidly organized “communities”. Market networks seem to offer more direct access to the world at large. Cheap information allows relations at distance to be made more personal. So we have to rethink how societies can best be organized for their development.

The meaning of money is that each of us makes it, separately and together (Hart, 2006). It is a symbol of our individual relationship to the community. This relationship may be conceived of much as in existing states — 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, allowing each of us to generate personal credit linking us to multiple forms of association. But few people are ready to accept that society rests on nothing more solid than our transient exchanges.

(b) Money as idea and object

Keynes (1930) held, against the myth that traces money to the barter of commodities by savages, that states invented money. He distinguished how purchasing power is expressed (“money-of-account”) from the currency that is actually held (“money-proper”, what Dodd (2005) calls “the monetary medium”). These are money’s insubstantial and substantial forms, respectively. It was thus always both an idea and an object; we might say, virtual and real. The convenience of using money for exchange on the spot seemed to Keynes less important than the emergence of a money standard named by law. Moreover, the acknowledgment of private debts (“bank money”) has long been used to settle transactions expressed through the money of account.

Modern state money is currency of little or no worth offered to a people by their government in payment for real goods and services, with the obligation to pay taxes on all transactions using the sole legal means of exchange within the territory. Central banks jealously guard the national monopoly, policing the banks who actually issue most of the money. Most currencies today are a hybrid between commodity-money (based on gold for example) and fiat-money (paper money). From the beginning, states and markets were symbiotic. Rulers needed the revenues from taxation of trade and some imported commodities as symbols of power; merchants needed the protection of law and the establishment of a public standard. Each excluded the possibility of society being conceived of as persons belonging to particular communities.

(c) Heads or tails?

The coin has two sides (Hart, 1986). One contains a symbol of political authority (heads); the other tells us its quantitative value in exchange for other commodities (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.

Victorian civilization based its market economy on money as a commodity, gold. For much of the twentieth century, under Keynes’s influence, political management of money was normal. Now there is talk again of “the markets” reigning supreme and of states losing control over national currencies in a process of globalization. Yet the evidence of our coinage is that states and markets are or were each indispensable to money. What states and markets share is a commitment to founding the economy on impersonal money. If you drop a coin and someone else picks it up, they can do exactly the same with it. This absence of personal information from the currency is what recommends cash to people who prefer their transactions to be invisible. But economic democracy requires people to participate in exchange as themselves, not just as the anonymous bearers of cash.

What if money came from the people instead (Hart, 2006)? The German romantic, Adam Müller (1931 [1816]) thought money expressed the accumulated customs of a nation (Volk); while Simmel (1978 [1900]) and Mauss (1990 [1925]) conceived of money as an expression of trust within civil society, locating value in personal management of credit and debt. In the age of digital communications, other possibilities present themselves. If money is a measure of transactions, it might even become more meaningful than it has been of late.

(d) People’s money

The bureaucratic power of states rests on coercion. Revenue collection, both public and private, depends on the authorities being able 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 large corporations and national governments. Will borderless trade at the speed of light permit governments and corporations still to compel payment of their dues? Contemporary conflicts over intellectual property hinge on this question (Hart, 2005).

How might public economies be organized without effective means of coercing payment? Some Swiss cantons have recently released their stock exchanges from government supervision, because the threat to punish offenders was idle. Exchanges were asked to draw up their own rules with the sole sanction being to exclude transgressors. With the erosion of territorial power, people will have to turn to more informal means of regulation within their own forms of association. The forms of money and exchange are likely to be no exception.

Modern bureaucracy, as embodied in law, markets and science, has undermined the meaningful attachment of persons to the social order. So, 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 this point. Mauss (1990 [1925]) was far-sighted when he traced the origin of the modern economy to the gift, rather than to barter.

Mauss’s emphasis 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. Our need to keep track of proliferating connections with others is mediated by money as a means of collective memory. People will increasingly enter circuits of exchange based on special currencies. At the other extreme, we participate as individuals in global markets of infinite scope, using international moneys of account (such as the euro), electronic payment systems of various sorts or even direct barter via the internet.

It is a world whose plurality of association 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 shift to ever more intangible versions of currency — from metals to paper to bits — has exposed the limitations of central bank monopolies. In response, people have already started generating their own money in the form of a variety of community currencies often using sophisticated electronic payment systems (Hart, 2006).

Even when they don’t issue their own money instruments, people do make their own social uses of it. Zelizer (1994; 2005) argues that monetary flows are best approached through understanding the social practices of ordinary people. This too is the dominant perspective of Parry and Bloch’s collection, Money and the Morality of Exchange (1989). The anthropology of money must build on this perspective, since economic democracy has its origin in such practices. But I have been concerned mainly with the prospects for people to make money rather than take it for their own ends.

Commoditization: the dialectics of social abstraction

One common strand informing these several lines of inquiry into money has been Marx’s analysis of the historical relationship between people, machines and money in Capital. People ought to control machines and through them money, to be distributed in the general interest; but it is the other way round — money controls the machines and the people, with unequal and often socially disastrous results. Our political task is to reverse this situation. His book was a means to that end and he began it with the famous chapter on “commodities” which deserves our close attention, especially the opening section : “The two factors of a commodity: use-value and value (the substance of value and the magnitude of value)” (Marx 1970 [1867] : 35-41).

Marx defines the commodity as a useful product of labour which, by means of social abstraction, is endowed with value in exchange. In an earlier article (Hart, 1982), I sought to improve on this definition, first by making the historical dialectic more explicit and then by taking up developments since Marx’s time. I recast the commodity as a process, “commoditization”, defined as “the progressive abstraction of social labour”. When we do things for each other in society, these services have to be detached from what we do for ourselves. This process of abstraction draws us into ever-widening circles of interdependence, the most inclusive of which are exchanges using money.

The commodity is progressively (but not necessarily in a historical sequence):

Some useful thing external to the producer;
Made social by becoming available to outsiders;
Specialization extends exchange to an inter-community level;
Sometimes persons circulate, not things (e.g. marriage exchange);
Products of socially divided labour are circulated by means of gift-exchange, barter or payments of rent;
This may be elaborated as markets, exchange at negotiated rates, not the gift;
Then special- and general-purpose monies enter into the circuit of exchange;
Money is the commodity crystallized as pure exchange value (Marx);
Now money can take the form of capital to make profit;
Eventually “industrial capital” employs human labour, as opposed to finance and merchant capital;
Passing beyond Marx’s time, services come to outweigh goods in the world market (things are replaced by what people do for each other);
Now commodities are often ideas and work for society is recognized through wholly abstract ciphers; money is information flying around cyberspace as bits;
The world market for money is dominated by derivatives – secondary contracts that gamble on the future prices of commodities actually bought and sold;
But people still do many things for themselves; make gifts; use old-fashioned cash; join computerized barter networks etc.

This is, of course, a bourgeois just-so story; and it has been thrown into question again by the recent collapse of the utopian attempt to separate finance from the real economy and politics. But it is based on Marx’s and it does illuminate a basic trend that he predicted, the apotheosis of capital as money exchanged for money in a pure form detached from what people do. It is consistent with Mauss’s (1990 [1925]) argument that gift-exchange and market contracts rest on a shared logic of reciprocity; but not with the opposition between “gift economies” and “commodity economies” that animates so much anthropological discussion today (Gregory, 1982; 1997 : chapter 2; Hart, 2007a).

In his introduction to Grundrisse (1973 [1859]:100-108), Marx states that we must start from the concrete conditions of our moment in history and then draw some analytical abstractions from them. Some are content just to achieve abstract ideas; but for Marx the point is to insert these simplified abstractions back into their concrete starting-point. Yet he opens Capital with this abstract discourse on “commodities” and the three volumes never get to where he was aiming for in Grundrisse, “the world market and its crises”.

Both Marx (1970 [1867]) and Simmel (1978 [1900] : chapter 6) noticed that social abstraction through capitalist markets seemed to go along with intellectual abstraction as philosophy and science in ancient Athens, Renaissance Florence, England in the seventeenth century and, we might say, the USA in the twentieth. But we should not lose sight of the dialectics involved. The commodity remains something useful and in that use lies its concrete realization. The reality is the mutual determination of the abstract and the concrete and our method has somehow to reproduce that.

We rely on the products of abstraction to engage with others in highly concrete ways; and information-based trade in commodities and money allows us to interact with increasing specificity at great distances. Thus I once had a service contract for my website with a firm in Bangalore, India. I could talk to the webmaster there by internet telephone, while he showed me various design possibilities through our browsers– all in real time and at no cost. This is getting close to what we could do to if we were in the same room together. Working with a PC will be a lot less lonely in future.

The digital revolution in communications is as radical as any in human history, comparable to the invention of agriculture (Hart, 2000, 2005). The internet went public less than two decades ago and its basic technologies were invented in the context of the second world war. We are like the first digging-stick operators who stumbled into a revolution whose culmination thousands of years later in Chinese agrarian civilization was unimaginable to them.

A case study: the euro

The euro is, with the US dollar, an example of the “homogenization” of money in recent times, the tendency for currencies to become more alike and for national currencies to take shelter with a global one (Dodd, 2005). As a very recent experiment, it lost 20% of its value against the dollar when it was only virtual (money of account), regaining more than that after its launch as notes and coins (monetary medium), only to slide back in 2005 and recover in 2006, since when its strength against a weakening dollar may have jeopardized its manufacturing exports. With the dollar’s role as world currency coming under pressure, the euro offers one of the few alternative refuges for the free flow of capital worldwide.

The European Union is the most dynamic political experiment in the world, with its rapid enlargement giving rise to intense debate over economic policy. The French and Dutch rejection of the new constitution revealed a popular concern that European governance is too remote, elitist and bureaucratic. I see the European project as an antidote to reactionary nationalism; but it could surely do with being more flexible and accountable. The “no” votes highlighted the issue of Europe’s “social model”, specifically of its ability to withstand the neo-liberal world economy. The monetary union agreed at Maastricht is too rigid and the Dutch in particular found they had imported inflation with the euro, partly because the governments of larger countries overspent their limits to shore up depressed economies. Some Italians, faced with Asian competition for their manufactures, now express nostalgia for lira devaluation.

As European and American foreign policy have diverged since the end of the Cold War, this has led to growing public discussion of their respective economic models. Market liberals see only decadence in Europe and a euro that was a dead duck before it even got started. Some American radicals, on the other hand, claim that Bush invaded Iraq because Saddam was switching his oil money into euros. In the meantime, no-one knows how long Japan and China will finance the USA’s trade and budget deficits nor what will happen to the world economy if they sell off their dollars. The rise of the so-called BRIC countries (Brazil, Russia, India and China) as producers of agriculture, minerals, manufactures and information services is the biggest shift in global capitalism since the USA and Germany challenged Britain’s commercial ascendancy a century ago. A focus on the euro is a way of simplifying this complex situation. That is after all one of money’s principal functions. So is the euro a new form of money and what difference has it made so far?

An editorial in Libération, of 1^st January 2002, celebrated the euro as a revival of the spirit of the Roman Empire under the heading “Rubicon”:

La marche de César sur Rome fut l’acte fondateur d’une Pax romana qui étendit son empire plusieurs siècles durant d’un bout à l’autre de l’Europe, garantissant au continent prospérité et civilisation. Les Européens n’ont jamais tout à fait perdu le souvenir de cet âge d’or….L’euro, véritable icône de l’Union européenne, est une nouvelle réincarnation de l’éternel projet d’unité d’un vieux continent hanté par sa longue histoire de conflits sanglants… (p. 3)

Moneta returns to claim her cultural legacy and a newspaper of the left temporarily abandons its republicanism to invoke the idea of empire. If money is memory, then the euro provokes very long memories indeed, as well as a degree of amnesia. 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 EU is a community, not a state; and its founding principle of “subsidiarity” ensures that there is room for many levels of community underneath. Ironically, by suppressing their own national currencies, some countries may encourage the formation of parallel exchange circuits, employing virtual deutschmarks or francs as community currencies. There is scope for less inclusive monetary instruments to complement the euro. After all, the identity of the French is hardly erased by a currency that crosses borders.

Has the euro made any difference to the personal memory of individual Europeans? Their travels between member countries have been simplified, but not much else has changed. In most respects the system of banking remains the same and this reflects the conservatism of Maastricht and of the European central bank it eventually created.

The technical form of money is becoming ever more insubstantial — from precious metals and ledger entries to paper notes and electronic digits. In the process money is revealed as pure information and its function as an accounting device (money of account) takes precedence over its form as circulating objects (the monetary medium). The euro began life in a wholly virtual form, without an objective existence as currency. Since money futures markets were invented in 1975, international exchanges of money no longer mainly pay for traded goods and services, but rather consist of money being exchanged for money in another form. In this way the money circuit (known as “the markets”) has become almost wholly detached from real production, trade and political management.

In this world of runaway intangibles, the arrival of the euro notes and coins in January 2000 had a tangible objectivity. The banks of course still create over 90% of all euros in the form of paper loans (or more often as bits in cyberspace), but the actual currency was seen to be a symbol of a new political era. Almost all suppliers took advantage of the switch to round prices upwards. Otherwise, since the participating national currencies had been linked together within EMU for a decade, the euro has made little difference to people’s experience of money either as an idea or as an object.

What about “heads or tails”? 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 dollar, and the participating countries represent in effect 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 its management is likely to be even less democratically accountable to the public than its national precursors. The euro is in principle a throwback to the Bretton Woods era of fixed parity exchange rates; and it does not take much imagination to figure out that some parts of the European economy will suffer from its rigidity. The plight of countries like Ireland, Spain and Austria after the “credit crunch”, specifically their inability to devalue with th efreedom enjoyed by Britain, Sweden and Switzerland, confrms this hypothesis. At least the euro coins have generally dispensed with the heads of rulers.

The economic destiny of 300 million Europeans is now tied to the fortunes of a single currency whose management cannot possibly meet their varied needs and interests and whose political form is unwieldy enough to retard effective action in a crisis. If government of modern societies from a fixed central point has always been anomalous, this is even more true of Europe as I write now. Its constituent states will come under pressure from their own people for more flexible instruments of economic management. The euro cannot do the job all by itself. National monopolies of money have in any case only been around since the 1850s. Now would be a good time to recognize the need for a variety of monetary instruments, for as many in fact as our communities.

Is the euro a step towards money that better reflects the interests of people in general? The technical forms of currency are relatively insignificant — notes, coins, cheques, ledgers, plastic, digits — and the euro embraces them all. The form of the money of account is more important and, after several thousand years of state money linked to markets for scarce commodities (Keynes, 1930), it will take some effort to embrace another form, people’s money. Territorial states are an anachronism today. Digitization encourages a growing separation between society and landed power. 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. The national governments of Euroland are likely to be more constrained in their ability to raise taxes beyond the norm for the region. And of course, travellers throughout Europe will be less subject than before to usurious exchange rates. But against this, the management of the European economy from a single fixed point will impose costs on regions ill-suited by the common monetary policy. And it is still the case that people will finance governments and the banks through the imposition of a monopoly currency as sole legal tender.

There are other democratic possibilities. We can make our own money rather than pay for the privilege of receiving it from our rulers (Hart, 2006). Already social experiments involving 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 new approaches addressing the parts that the euro alone cannot reach. But the euro itself will probably be with us, well, for as long as European people think of themselves as a community for some purposes. This project has been severely strained by the financial (subsequently general economic) crisis of 2008-9 which has brutally exposed not only the gap between East and West Europe, but also the vulnerability of countries like Spain and Ireland to dependence on the European Central Bank’s management of a single currency, a role that increasingly looks to reflect Germany’s interests as the dominant member. Meanwhile the euro’s movement through our turbulent world offers us a glimpse of where human society is heading – perhaps to a totalitarian and fragmented future, even to world war, but just possibly also towards greater economic democracy and human unity.

Conclusion: money and the making of world society

The euro is the most tangible symbol of the European Union, but not co-extensive with it. For the last century or more, member states had supplied their citizens with a monopoly currency that served both as the reification of the national economy and as their principle link to the world market. The move towards political and monetary union in Europe is the most striking example of a general trend. Everywhere nation-states are coming together into regional trading blocs as one kind of response to globalization: NAFTA, Mercosul, ASEAN, ECOWAS etc. At the same time, many states have hitched their waggon to the sinking dollar. In the meantime, the sheer size and volatility of global money markets and internet commerce undermine the credibility of existing national polities as an effective bridge to world society. The international settlement after 1945 looks increasingly inadequate. Before long, calls for a world currency will become louder than at present (Frankman, 2004).

Money is a universal measure of value, but its specific form is not yet as universal as the method humanity has devised to measure time all round the world. It is a store of memory linking individuals to their various communities, a kind of memory bank and thus a source of identity (Hart, 2000). 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 finality to your choice. Money thus links us imaginatively and practically to the widest reaches of society, while lending precision to the fulfillment of our most concrete desires and obligations. 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.

If the object of anthropology is to become the making of world society, the substantial intellectual gains made by ethnography in the twentieth century must be married somehow to humanistic, historical and philosophical inquiries adequate to the task. The study of money offers one strategic focus for this, since money, more than most institutions, links each of us directly with the humanity’s potential to make universal society.

References

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First published in E. Baumann, L. Bazin, P. Ould-Ahmed, P. Phélinas, M. Selim, R. Sobel (éds)
Argent des anthropologues, monnaie des economistes (Harmattan, Paris, 2007)

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.

In 1996 I gave a not dissimilar lecture in the same place: Clarkson, Cambridge and the international movement for human rights.

See also Between slavery and emancipation in West Africa.

Lecture:              Part 1,     Part 2,     Part 3,     Part 4,     Part 5.

Discussion:         Part 6,    Part 7,     Part 8,     Part 9

Dear Brian, I like your piece on financial speculation very much. The Goldberg example (an Australian artist who performed publicly as a speculator on Rupert Murdoch’s News Corporation) reminded me of the UBS trading floor in Chicago, the largest of its kind, buried at the centre of a black skyscraper on Wacker Drive. The trading floor has no outside windows; there is a lot of security stopping you getting near there. No-one can see in, but the traders see out through scores of TV screens on the walls carrying everything from weather reports to newscasts to flickering banks of money numbers. It is a concealed panopticon on the world economy. I felt the power of it all then and wrote about it in ‘Notes on the counter-revolution’.

Here is what I think about the central question you pose concerning what speculation means. I start from Max Weber’s analysis of capitalism in Part IV of the General Economic History. He defines it as ‘rational enterprise’, meaning the attempt to place an economic project with an uncertain future on a basis of means-end calculation. Capitalism is driven by two impulses: speculation (the desire to win money for nothing) and calculation (the desire to eliminate risk wherever possible). It succeeded because the second principle became dominant, at a terrible cost to those who were forced to shoulder the risks that capitalists passed on. Frank Knight in Risk, Uncertainty and Profit offered a narrower but sharper lens for looking at all this when he distinguished between risks you can calculate and those you can’t (uncertainty). Casinos can predict their profits on turnover with amazing accuracy. Insurance and banking traditionally kept within stringent actuarial limits.

This Faustian bargain with the future has universal qualities, according to my reading of Mauss. Everywhere economic relations have to be pushed beyond the boundaries of local society because none is materially self-sufficient. Money and markets in a wide variety of forms supply this function of social extension. Risk and uncertainty are always thereby increased, but the dangers are moderated by a series of institutions, both personal and impersonal. The locus classicus is the Trobriand canoe expedition where kula valuables exchanged between partners offer a measure of protection in foreign places.

What we saw in the last three decades, and especially since 1990, was a massive extension of economic relations on a world scale (globalization) with the development of new financial instruments seeking to take advantage of the opportunities of deregulated finance and at the same time trying to figure out ways of containing the increased risk. Arbitrage attempts to take advantage of small price discrepancies between markets that are separate. If these actions are successful, market compartments are broken down and one market replaces several. As you describe here, derivatives seemed to offer ways of making the shift to a single market more precise as well as highly profitable to pioneers.

These profits became so great in the later stages of Greenspan’s credit bubble that, in order to remain competitive and keep their jobs, CEOs embraced the riskier options. In the process banking became a species of betting in which the line between risk and uncertainty moved inexorably towards the latter pole. Many people saw the dangers of the asset bubble that developed as a result. But there was always the other story to counteract the doomsayers: capitalism had entered a new stage where what was once radical uncertainty had become calculable risk. According to this interpretation, the financial institutions who had pioneered this new stage (Wall St and the City of London) were leaving the rest of the world behind, stuck in conservative and unprofitable practices.

Where do you draw the line between speculation and calculation, between risk and uncertainty? My favourite definition of religion is Durkheim’s, that it is the attempt to build meaningful bridges between the known and the unknown, between everyday life and the disasters that lie in wait for all of us, especially death. Money takes on some of the qualities of religion in capitalist societies by mediating between the the finite desires and obligations of each of us and our human potential for universal society.

Like many people, I was caught up in the making of world society as a single market for communications. The end of the Cold War, the rise of the internet and the emergence of China and India as economic powers all pointed to a massive extension of commercial relations on a global scale. All the classical founders of social theory recognized that, for all its contradictions, capitalism’s historical role is to bring cheap commodities to the masses and to break down the insularity of traditional communities through commerce. These developments brought echoes of the classical liberal revolutions to the late twentieth century world: a massive movement of people with horizons less fettered by local political restrictions than before.

Whenever I visit a new country and extract local currency from a hole in the wall, I offer a mental toast to Harold Wilson, the British Prime Minister who stopped us from taking more than 300 quid a year out of the country in the 1970s. Angolan women jump on planes to Rio, Paris, London and Dubai to stock up on goods they can sell in the streets of Luanda. I know, it’s unsustainable; but the freedom of it, compared with any conditions they knew before, is something I cherish.

So the bubble has burst and state power is everywhere on the rise. The state’s role as lender of last resort appears to be our only hope as we stare into the abyss. I doubt if the same politicians who supervised the boom will have the wit to get us out of the bust. In any case, where is the state these days? Is it the US acting alone, federations like the EU, surely not nation-states as in the 1930s? What price will we be expected to pay now for greater security, if indeed it can be bought? After all the looting that went on and still does, I can’t bring myself to denigrate money and markets without acknowledging some of the social benefits of that great commercial expansion.

Rather than rely on the central banks and their political masters to get us out of the mess, I envisage people in general taking advantage of the economic breakdown to assert their solidarity in new ways. The digital revolution in communications has been taking remarkable strides in the last five years, manifested as the rapid development of more personal ways of making society through networking sites, social bookmarking and much else. The failure of the institutions developed after 1945 (and not just neoliberalism) represents a huge opportunity for an economic revolution that would reinstate democracy as the guiding principle of our socieities. Maybe money in its speculative guise would be largely irrelevant to a society, but we are unlikely to be able to manage without relying on money in some other form.

I haven’t addressed your thesis on money and art directly and I would like to at some stage. My starting point would be Lawrence Weschler’s book on Boggs: a comedy of value. I read an interview with Charles Saatchi the other day where he was asked if he thought his role as a buyer of modern art distracted from the real value of the art and he replied, “The money is the message”. I couldn’t resist your use of the tulips story too since Anne Goldgar’s book Tulipmania tries to argue that most of what we think we know about it is bunk. But these are bits and pieces. I wanted to start by laying out some of the metaphysical foundations of my understanding of money’s potential in society.

As ever, Keith

A preoccupation with Africa’s post-colonial failure to ‘develop’ – or to ‘take-off’ — has obscured what really happened there in the twentieth century. The rise of cities has been accompanied by the formation of weak and venal states, locked into dependency on foreign powers and leaving the urban masses largely to their own devices. The latter have generated spontaneous markets to meet their own needs and these have come to be understood as an ‘informal economy’. Whatever its value in bringing to light hitherto invisible economic activities, this concept is largely negative, focusing on whatever is not regulated by state bureaucracy and law. It tells us nothing about the social organization of these practices. In order to understand Africa’s twentieth-century experience – the extraordinary compression of contradictory social developments within a short period — we must first take a long view of the region’s divergence from the general historical trajectory of the Eurasian land mass.

Africa’s traditional societies and agrarian civilization
I distinguish between three broad types of social formation: ‘egalitarian societies’ based on kinship; ‘agrarian civilization’ in which urban elites control the mass of rural labour by means of the state and class power; and ‘national capitalism’, where markets and capital accumulation are regulated by central bureaucracies in the national interest. Although Africa south of the Sahara has a more complex history than can be captured neatly by this typology, its dominant institutions before the modern period may best be understood in terms of the classless type based on kinship institutions. The second type, agrarian civilization, covered most of Europe, Asia, the Middle East and North Africa for the last few millennia. National capitalism within Africa has only taken root so far in South Africa, until recently for the benefit of whites only. For a time after independence, Kenya was touted as coming capitalist power (Leys, Kitchin etc). This was never realised, but the country has remained a centre for commercial innovation. Middle Africa, particularly after independence, made a belated transition to the Old Regime of agrarian civilization, while Europe and North America, followed by much of Asia, embraced national capitalism. This brought North and Middle Africa closer together as pre-industrial class societies, while South Africa has drawn closer to the rest of Africa since the coming of majority rule.

Jack Goody (1976) has tried to explain how and why African societies diverged before the modern period from their counterparts in Europe and Asia. He concluded that all the agrarian civilizations of Eurasia shared a common origin in the ‘urban revolution’ of Mesopotamia 5,000 years ago (Childe 1954). This pattern also extended to Egypt and the Mediterranean littoral long ago. By the eleventh century, Cairo was the hub of a mercantile civilization stretching from Spain to India. The rise of cities was accompanied by the formation of states whose function was to supervise a new kind of class society, in which a narrow urban elite extracted agricultural surpluses from an increasingly servile rural labour force. Goody showed how forms of kinship and marriage reflected property relations that were themselves made possible by more intensive technologies, such as the plough and irrigation. Sub-Saharan Africa, he held, had largely missed out on this urban revolution along with its agricultural technology, higher population density and unequal property relations. This accounts for why traditional African forms of kinship and marriage are so distinctive and their societies were, relatively speaking, classless. Even where a measure of stratification existed, redistribution through kinship institutions prevented the emergence of classes based on different styles of consumption.

The contrast between egalitarian societies built on kinship and unequal societies based on state power and class division goes back to L. H. Morgan (1877) and before him to Jean-Jacques Rousseau (1754). It cannot be applied unambiguously to Africa and Eurasia before the modern age, even if we try to isolate Black Africa from its Northern and Southern extremities. The Atlantic and Indian Ocean slave trades generated coastal urban enclaves in both West and East Africa. The medieval civilization of the West African Sahel was a significant part of the Islamic world. Of the Yoruba agro-cities that emerged as a result of nineteenth-century warfare, Ibadan’s population had reached 200,000 by the onset of colonial rule. These examples of pre-colonial urbanization (Freund 2007) were rightly emphasized when the anti-colonial revolution delivered independence to most African countries from the 1950s.

Even so, large swathes of Middle Africa entered the modern era with a minimal urban population and the dominant institutions of their societies owed a lot more to kinship than to class differences. Indigenous states were commonplace in the early modern period, many of them emerging in response to the political, economic and demographic upheavals provoked by European imperial expansion. But, in a dozen volumes, Goody documents how most African societies south of the Sahara diverged from the pattern of agrarian civilization typical of pre-industrial Eurasia. This institutional pattern included territorial states, embattled cities, landed property, warfare, racism, bureaucratic administration, literacy, impersonal money, long-distance trade, work as a virtue, world religion and the nuclear family; and its grip on modern world society is still strong (Hart 2002), since national capitalism everywhere incorporated elements of the Old Regime.

Of course, if traditional African societies appeared to be more equal than their European counterparts, it does not mean that inequality was wholly absent there. Friedrich Engels (1884) made much of the progressive subordination of women, first in tribal societies of farmers and herders, later in pre-industrial states and finally in capitalist societies. A body of more recent Marxist and feminist scholarship (e.g. Meillassoux 1981) extended this analysis to the conflict between African males of different age, with polygamous elders commanding young men’s labour through control of access to marriageable women who were in their turn condemned to do most of the work without effective political representation. Gender and generation differences accordingly take on huge salience in African societies.

Africa’s urban revolution
In 1900, Africa probably had less than 2% of its inhabitants living in cities, under the global average before the industrial revolution. By 2000, a sustained population explosion has seen the urban share rise to almost half, compressing into one century what took twice as long elsewhere and from a much more rural base. Since Africa’s population is still growing much faster than other regions at 2.5% per annum, so too is its relative size in the world, if not yet its purchasing power (around 2% of the world economy). In short, Africa experienced in the twentieth century its own version of an urban revolution that it had largely avoided before. This means not just the unprecedented proliferation of cities, but also that the whole package of pre-industrial class society was installed there more or less for the first time: states, new urban elites, intensification of agriculture and a political economy based on the extraction of rural surpluses. Any strategy for African development now must build on the social conditions that came into being when nominally independent nation-states were built on an economic foundation of pre-industrial agriculture (Hart 1982).

The anti-colonial revolution unleashed extravagant hopes for the transformation of an unequal world. These have not yet been realized for most Africans who are still waiting for political forms that will guarantee their full participation as equals in world society. By most accounts African economies have not fared well since independence. But the model of development they were expected to adopt was ‘national capitalism’, the attempt to manage markets and accumulation through central bureaucracies with the general interest of citizens in mind. Development in this sense never had a chance to take root in Africa. For the first half century, African peoples were shackled by colonial empire and in the second, their new nations struggled to keep afloat in a world economy organized by and for the major powers, then engaged in the Cold War.

The assumption was that a change in ownership of the state would deliver economic development to African peoples, regardless of conditions in the world at large. Frantz Fanon took a different view. In The Wretched of the Earth, written from the depths of Algeria’s own anti-colonial struggle, he spoke prophetically of the “pitfalls of national consciousness” which would undermine Africa’s post-colonial states and especially of the weakness of the new middle class who led them:

From the beginning the national bourgeoisie directs its efforts towards (economic) activities of the intermediary type. The basis of its strength is found in its aptitude for trade and small business enterprises, and for securing commissions. It is not its money that works, but its business acumen. It does not go in for investments and it cannot achieve that accumulation of capital necessary to the birth and blossoming of an authentic bourgeoisie (Fanon [1959] 1970:144)

In other words, Africa’s new leaders thought they were generating modern economies, with ambitions for public expenditure to match, but in reality they were erecting fragile states whose economic base was the same backward agriculture as before. As Fanon predicted, this weakness inexorably led them to exchange the democratic legitimacy of the independence struggle for dependence on foreign powers. These ruling elites first relied on revenues from agricultural exports, then on loans contracted under dubious circumstances, finally on the financial monopoly that came from being licensed to supervise their country’s relations with global capitalism. But this bonanza was switched off in the 1980s, when foreign capital felt that it could dispense with the mediation of local state powers and concentrated on collecting debts from them. Many governments were made bankrupt and some simply collapsed into civil war.

It is hardly surprising that hopes for African democracy soon flew out of the window, to be replaced by a norm of dictatorship, whether civil or military. Concentration of political power at the centre led to primate urbanization, as economic demand became synonymous with the expenditures of a presidential kleptocracy. Political scientists have long written of the patrimonial norm for African states without pushing the analysis far or deep enough [ref]. The growth of cities should normally lead to an expanded level of rural-urban exchange, as farmers supply food to city-dwellers and in turn buy the latter’s manufactures and services with the proceeds (Steuart 1767). But this progressive division of labour was stifled at birth in post-colonial Africa by the dumping of cheap subsidized food from North America and Europe and of cheap manufactures from Asia. For “structural adjustment” meant that African national economies had no protection from the strong winds of world trade. The result was that a peasantry subjected to political extraction and violence was forced to choose between stagnation at home and migration to the main cities or abroad. Somehow the cities survived on the basis of markets that emerged spontaneously to recycle the money concentrated at the top and to meet the population’s needs for food, shelter, clothing and transport. As Fanon pointed out, there is no shortage of business acumen, just of capital. These markets are the key to understanding the economic potential of Africa’s urban revolution.

Urban commerce and the informal economy

The idea of an informal economy came out of the lives of poor African city-dwellers. After the modernization boom of the 1960s, the notion that poor countries could become rich by emulating “us” gave way to gloomier scenarios, fed by zero-sum theories of underdevelopment, dependency and “the world system” (Wallerstein 1974). In development policy-making circles, this trend manifested itself as fear of “Third World urban unemployment.” It was noted that cities there were growing rapidly, but without comparable growth in jobs, conceived of as regular employment by government and the corporations. At this time, it was universally believed that only the state could lead an economy towards development and growth. There were a few liberal economists around, but their influence on policy was minimal. The question was therefore: how are “we” (the bureaucracy and its academic advisors) going to provide the people with the jobs, health, housing etc that they need? And what will happen if we don’t? The spectre of urban riots and even revolution raised its head. Anyone who visited these sprawling cities, however, would see a rather different picture. Their streets were teeming with life, a constantly shifting crowd of hawkers, porters, taxi-drivers, beggars, pimps, pickpockets, hustlers – all of them getting by without the benefit of a “real job.”

There was no shortage of names for this kind of early-modern street economy. Terms like “underground,” “unregulated,” “hidden,” “black” and “second” economies abounded. Clifford Geertz’ (1963) analysis of entrepreneurship in Indonesia was exemplary. The majority of a town’s inhabitants were occupied in a street economy that he labelled “bazaar-type.” In contrast, the “firm-type” economy consisted largely of western corporations who benefited from the protection of state law. These had form in Weber’s (1981) sense of “rational enterprise,” substituting calculation for speculation and above all minimizing risk. National bureaucracy lent these firms a measure of protection from competition, thereby allowing the systematic accumulation of capital. The bazaar on the other hand was individualistic and competitive, so that accumulation was well-nigh impossible. According to Geertz, some Reform Muslim entrepreneurs were rational and calculating enough; but they were denied the institutional protection of state bureaucracy granted to the existing corporations. He pointed out the irony of a neoclassical economics that studies the decisions of individuals in competitive markets like the bazaar, while treating as anomalous the dominant monopolies protected by state bureaucracy. The discipline found this model in the late nineteenth century, when a bureaucratic revolution was transforming mass production and distribution along corporate lines. At the same time the more powerful states awarded new privileges to big corporations and society took its modern form as national capitalism.

My paper, “Informal income opportunities and urban employment in Ghana,” was written for a 1971 conference (Hart 1973). Before it was published, an International Labour Office report (ILO 1972) launched the idea of an “informal sector” in Kenya. I argued that Accra’s poor were not “unemployed.” They worked, often casually, for erratic and generally low returns; but they were definitely working. What distinguished these self-employed earnings from wage employment was the degree of rationalization of working conditions (Weber 1978). An ability to stabilize economic returns within a bureaucratic form made them more calculable and regular for the workers as well as for their bosses. That stability was in turn guaranteed by the state’s laws, which only extended so far into the depths of Ghana’s economy. “Formal” incomes came from regulated economic activities and “informal” incomes, both legal and illegal, lay beyond regulation. I did not identify the informal economy with a place or a class or even whole persons. Everyone in Accra, but especially in the slums, tried to combine the two sources of income. Informal opportunities ranged from market gardening and brewing through every kind of trade to gambling, theft and political corruption. My focus was on what people generated out of the circumstances of their everyday lives. The laws and offices of state bureaucracy only made their search for self-preservation and improvement more difficult.

The ILO Kenya report suggested that self-employed or informal incomes might reduce the gap between those with and without jobs and so could contribute to a more equitable income distribution than was apparent from official statistics. Following a shift in World Bank policy, they advocated “growth with redistribution,” that is, helping the poor out of the proceeds of economic expansion. By now the multilateral institutions were worried about potential social explosions. A vogue for promoting the informal sector as a source of employment creation — in the most optimistic scenario capable of lifting a poor economy by the bootstraps — took off in the 70s. The dominant paradigm of development was still Keynesian and it was still assumed to be the state’s responsibility.

My aim was to insert a concrete description of irregular economic activity into the ongoing debates of professionals in the development industry. The ILO Kenya report, however, did set out to coin a concept, ‘the informal sector’, and it subsequently became a keyword organizing a new segment of the academic and policy-making bureaucracy. So the idea of an informal economy could be said to have had a double provenance that reflected its two sides: bureaucracy (the ILO report) and the people (an urban ethnography). Its association with the sprawling slums of Third World cities was strong at this time. Less attention was paid then to my observation that the commanding heights of the informal economy lay at the centres of political power, in the corrupt fortunes of public office-holders who often owned the taxis or the housing operated by the small fry.

The informal economy in development discourse
The “informal economy” is the antithesis of “national capitalism” or rather of its intellectual arm, “macroeconomics”. Beginning as a way of conceptualizing the unregulated activities of the marginal poor in Third World cities, the informal sector became recognized as a universal feature of the modern economy. Independence from the state’s rules unites practices as diverse as home improvement, street trade, squatter settlements, open source software, illegal drugs trafficking, political corruption, and offshore banking. Most economists have approached the informal economy in quantitative terms as a sector of small-scale, low-productivity, low-income activities without benefit of advanced machines, whereas I stress the reliability of income streams and the presence or absence of bureaucratic form.

The 1980s saw a major shift in world economy following the lead of Reagan and Thatcher. The state was no longer seen as the great provider. Rather “the market”, freed from as many encumbrances as possible, was the only engine of growth. The informal economy was reinvented as a zone of free commerce, competitive because unregulated. This coincided with the imposition of structural adjustment policies aiming to reduce public expenditures and throwing responsibility onto the invisible self-help schemes of the people themselves. By now, the rhetoric and reality of development had been effectively abandoned as the poor countries suffered the largest income drain in their history, through repayment of debts incurred during the wild banking boom of the 1970s.

What happened next could never have been anticipated around 1970: in the name of the free market, deregulation of national capitalism led to the radical informalization of world economy. Money went offshore and banking was increasingly unsupervised; corporations outsourced and downsized, in the process making work more casual and precarious; public functions were privatized; the drugs and illicit arms trades took off; the global war over intellectual property became the main site of capitalist struggle; and whole countries, such as Mobutu’s Zaire, abandoned any pretence of formality in their economic affairs. Today, illegal drugs are the most valuable commodity traded internationally. Finance, until recently, slipped out of its political shackles. The armaments industry became the corrupt core of western governments. Grey markets for goods imitating well-known brands and unlicensed reproductions were labelled “piracy”. The irrational borders of nation-states are riddled with smuggling.

The informal economy is now considered to be a feature of the industrial countries too, ranging from domestic do-it-yourself to the criminal economy of disaffected youth. Even before the Soviet Union’s collapse, it was clear that the command economy had spawned a flourishing black market, antecedent of the criminal mafias and oligarchs who now dominate the Russian economy. In Europe, the dissident left has long had a slogan: “Think red, work black, vote green.” Meanwhile, the collapse of the state in many Third World countries has led to the whole economy becoming informal. In many parts of Africa soldiers loot at will, while politicians fill foreign bank accounts. Or take Jamaica, which in the 1970s was a model “middle-income” developing economy. At one point the value of illegal marijuana sales was higher than the country’s three leading legitimate industries (tourism, bauxite and garments) taken together. No wonder politics was carried out by armed gangsters and youths left school early to learn hustling on the street.

Meanwhile, the attitude of international agencies towards informality changed. There is now substantial inward investment in some poor countries and foreign businesses feel the lack of an effective regulatory environment. This means boosting national bureaucracies which were deliberately undermined by structural adjustment. Now the call is for regulation and standardization. This is partly to secure a measure of economic order within particular countries; but transnational corporations and the international agencies also have a need for standardization between countries, so that they don’t have to adapt procedures to local circumstances every time. Clearly national and local institutions are now becoming globalized.  Informality is often seen as a threat to private sector development. Business corporations are undercut by informal operators who pay no taxes, evade costly regulations and take advantage of numerous devices, legal and illegal, to reduce their prices. Accordingly, whereas the informal economy was once seen as a positive factor in development, it is now more likely to be represented as an obstacle. Today the model of success for the world’s ruling elites is still the highly bureaucratic type of economy achieved by Western countries only in the second half of the twentieth century (De Soto 2000).

The dialectics of form
How might African governments encourage the evolution of the ‘informal economy’ towards more dynamic forms of urban commerce? ‘Form’ is the rule, an idea of what ought to be universal in social life; and for most of the twentieth century the dominant forms were those of bureaucracy, particularly national bureaucracy. The idea of an ‘informal economy’ is entailed in the institutional effort to organize society along formal lines. The twentieth century saw a general experiment in impersonal society that anchored bureaucracy in state-made laws carrying the threat of punishment. The dominant bureaucratic forms were conventionally divided according to ownership into public and private sectors. This uneasy alliance of governments and corporations is now sometimes classified as “the formal sector.” Ostensibly, they share conformity to the rule of law.

The formal and informal economies appear to be separate entities because of the use of the term “sector”. This gives the impression that the two are located in different places, like agriculture and manufacturing, whereas both the bureaucracy and its antithesis contain the formal/informal dialectic within as well as between them. There is a widespread perception of a class war between the bureaucracy and the people. It was not supposed to be like this. Modern bureaucracy was invented as part of a democratic political project to give citizens equal access to what was theirs as a right. It still has the ability to coordinate public services on a scale that is beyond the reach of individuals and most groups. And that is good enough reason to explore ways of linking the two more effectively. Many economic practices appear to be informal because their forms are largely invisible to the bureaucratic gaze. How then might non-conformist economic activities relate to the formal order? In four ways: as division, content, negation and residue.

The moral economy of capitalist societies is based on the attempt to keep impersonal and personal spheres of social life separate (Hart 2005). The establishment of a formal public sphere entailed creating another one based on domestic privacy. The two constitute complementary halves of a single whole. Most people divide themselves every day between production and consumption, paid and unpaid work, submission to impersonal rules in the office and the free play of personality at home. Money links the two sides; their interaction is an endless process of separation and integration, division. The division of the sexes into male and female is the master metaphor for this dialectic of complementary unity.

For any rule to be translated into human action, something else must be brought into play, such as personal judgment. Informality is built into bureaucratic forms as unspecified content. Viable solutions to administrative problems always contain processes invisible to the formal order. For example, workers sometimes engage in a “work-to-rule”. They follow their job descriptions to the letter without any of the informal practices that allow these abstractions to function. Everything grinds to a halt. Or take a chain of commodities from production by a transnational corporation to final consumption in Africa. At several points, from the factories to the docks to the supermarkets and on the street, invisible actors fill gaps the bureaucracy cannot handle directly. Informal processes are indispensable to the trade.

Of course, some activities break the law, through a breach of health and safety regulations, tax evasion, smuggling, the use of child labour, selling without a license and so on. The third way that informal activities relate to formal organization is as its negation. Rule-breaking takes place both within bureaucracy and outside it; and so the informal is often illegal. This compromises attempts to promote the informal sector as a legitimate economic sphere, since it is hard to draw a line between colourful women selling oranges on the street and the gangsters (not to mention policemen!) who exact tribute from them. When the rule of law is weak, the forms that emerge in its place are often criminal in character.

The fourth category is not so obviously related to the formal order as the rest. Some informal activities exist in parallel, as residue. They are separate from bureaucracy. It would be stretching the logic of the formal/informal pair to include peasant economy, housework and so on within the rubric of “informality”. Yet the social forms endemic to these often shape informal economic practices and vice versa. Is society just one thing – one state with its rule of law – or can it tolerate legal pluralism, leaving some institutions to their own devices? European empires, faced with scarce administrative resources, once turned to “indirect rule” as a way of incorporating subject peoples into their systems of government on a semi-autonomous basis (Mamdani 1996). Supervision of indigenous customary forms was delegated to appointed chiefs and headmen, reserving the key levers of power to the colonial regime. Anthropologists played their part in this (Asad 1973). Any serious attempt to link formal and informal economies today would require a similar openness to plural forms.

On the usefulness of informality
Africa cannot afford a development model based only on the West’s bureaucratic societies and the ‘informal economy’ is a bureaucratic concept. I have often wondered if it has advanced or retarded our understanding of development. The first criticism of the concept is that it is insufficiently dynamic. This might be because in the Cold War we lived under the threat of a nuclear holocaust (Hart 1992). No-one wanted the two sides to move, since all life on the planet might then be placed in jeopardy. In any case, the sides did move – at several levels. So another criticism is that the label “informal” says what these activities are not, but not what they are. For a development policy involving both sides, it will not do to lump everything together in a catchall phrase whose chief virtue is that it allows bureaucrats to claim they understand what they never could. We need rather to expose the positive principles organizing the informal economy and to place them within a suitably broad historical framework.  This is not to deny that there are political and analytical uses for the idea, particularly within international bureaucracies, such as lobbying for women’s rights and conditions of work (WIEGO), as well as intellectual uses that continue to generate important empirical work in Africa, India and elsewhere.

It has never been resolved whether the informal economy refers to casual labour in formal enterprises or not. This has become more pressing in the context of widespread deregulation, as outlined above. Neoliberal economic policies since the1980s fostered massive informalization of national and global economies, by reducing state controls and promoting the gigantic flows of credit and debt known as “the markets.” Extension of the scope of informality to embrace rich and poor countries, government and business, casual labor and the self-employed, corruption and crime, when taken with the wholesale devolution of central bureaucracies compared with forty years ago, leaves a question-mark over its continuing usefulness today.

The label “informal” may be popular because it is both positive and negative. To act informally is to be free and flexible; but it also refers to what people are not doing – not wearing conventional dress, not being regulated by the state. The informal economy allows academics and bureaucrats to incorporate the teeming street life of exotic cities into their abstract models without having to know what people are really doing. The idea lends the appearance of conceptual unity to whatever goes on outside the bureaucracy. Fearing its own isolation in a “planet of slums” (Davis 2006), the bureaucracy oscillates between offering partnership to the informals and hounding them off the streets. We need to know how formal bureaucracy works in practice and, even more important, what social forms have emerged to organize the informal economy. It is now time to examine the institutional particulars sustaining whatever takes place beyond the law.

This brings me back to the categories of relations between formal and informal economies. Division: The idea of interdependent, but separate halves of a social whole – in this case, the formal-informal dualism — is intrinsic to much development discourse. It is at best a way of launching discourse and soon limits critical enquiry. Content: If informality is often the unspecified content of abstract forms, this favours accepting the legitimacy of many informal practices and leaving more to people’s imagination. Negation: When the state is weak, the informal is often also illegal. The obvious response is to crack down on rule-breakers; but in general such initiatives are unsystematic and merely cosmetic. The biggest offenders escape and the law is made an ass. The number of legal offences could profitably be reduced, if existing regulation is ineffective. Residue: Governments might fruitfully adopt a hands-off approach towards semi-autonomous communities within their jurisdiction. But administrative decentralization poses a threat to weak states. These considerations, taken together, provide an abstract framework for thinking about how bureaucracy and the people might enter a new partnership for development. Nowhere is this issue more pressing than in Africa, where the question is largely one of organizing the urban informal economy as a launching pad for sustained economic growth in the coming decades.

The future of African urban commerce
Africa’s urban informal economy everywhere supplies food, housing and transport; education, health and other basic services; mining, manufactures and engineering; and trade at every level, including transnational commerce and foreign exchange. But its scope varies between the continent’s regions. In West/Central Africa, where white settlement was minimal, the cities were substantially an indigenous creation and their markets were always unregulated. Foreign middlemen like the Lebanese minority flourished largely outside colonial administrative controls. The great ports of the Atlantic seaboard enjoy a degree of mercantile freedom that ensures they will play an important part in Africa’s commercial growth. Today Angolan women jump on planes heading for London, Paris, Dubai and Rio, where they stock up on luxury goods for resale in the streets of Luanda. In Southern Africa, and to a lesser extent the East and North, cities were built by a white settler class who often imposed strict controls on the movement and activities of the indigenous population. The informal economy in South Africa today is distinctive in being hedged in by rules designed to promote modern industry. Elsewhere, in Zimbabwe, Mozambique and even in Kenya, the state has long played a more controlling role than would be considered normal today in Lagos, Cotonou or Dakar.

The state’s relationship to economy has been transformed since independence. African nation-states have learned the hard way that they are not free to choose their own forms of political economy. When the world was divided between the Rooseveltian consensus and the Soviet bloc in the first three decades after 1945 (what the French call les trente glorieuses), state ownership of production and control of distribution seemed to offer the best chance of defending the national interest against colonial and neo-colonial predators. After the 70s, the mania for privatization led to ownership being ceded to individual corporations, often with a colonial past. Structural adjustment forced governments to abandon public service provision, to lay off many workers and to allow the free circulation of commodities and money. In the Congo, Angola, Somalia, Liberia and Sierra Leone, failed states and civil wars encouraged informal mining and trade, concentrating wealth and power in the hands of warlords and their followers. The restoration of peace in some areas usually came with the return of limited bureaucratic controls over distribution. The situation is highly dynamic and variable.

Tax collection in Africa never attained the regularity it has long achieved in Europe and Asia. Cathérine Coquéry-Vidrovitch once claimed that an ‘African mode of production’ was based on seizing revenues from long-distance trade rather than producing for local consumption. But this could be said of most pre-industrial states; and it is a measure of Africa’s failure to adopt the model of ‘national capitalism’ that governments still rely on whatever resources they can extract from the import-export trade. The new urban classes that have arisen to control and live off these revenues, usually under a patrimonial regime propped up by foreign powers, constitute an Old Regime ripe for liberal revolution.

The use of a term like ‘patrimonialism’ reminds us that the new states and class structures of Africa’s urban revolution are entangled in kinship systems that remain indispensable to any understanding of how the informal economy works as social organization. The recruitment of dependents from ‘home’ allows the new urban middle classes to pass off exploitation of cheap labour as an egalitarian model of African kinship. Formal bureaucracy, on the other hand, is hostile to kinship, since the institution originated in the early modern drive to escape from a society based on personal relations. In that public context kinship is normally viewed as corruption. On the other hand, ‘family business’ has never lost favour and child labour is still acceptable there, if not when employed by transnational corporations. In the absence of a welfare state, Africans must rely on kinship to see them through the life cycle of birth, marriage, childrearing, old age and death; and this reinforces the traditional power of elders in the face of rural-urban migration on the part of youth and women.

To speak of economic growth in the future begs the question of what Africa’s new urban populations could produce. So far, African countries have relied on exporting raw materials, when they could. Minerals clearly have a promising future owing to scarce supplies and rising demand; but the world market for food and other agricultural products is skewed by western farm subsidies and prices are further depressed by the large number of poor farmers seeking entry. Conventionally, African governments have aspired to manufacturing exports as an alternative, but here they face intense competition from Asia. But the world market for services is booming and perhaps greater opportunities for supplying national, regional and global markets exist there.

There was a time when most services were performed personally on the spot; but today, as a result of the digital revolution in communications, they increasingly link producers and consumers at distance. The fastest-growing sector of world trade is the production of culture: entertainment, education, media, software and a wide range of information services. The future of the human economy lies in the infinite scope for us to do things for each other — like singing songs or telling stories — that need not take a tangible form. The largest global television audiences are for sporting events like the World Cup or the Olympic Games. The United States’ three leading exports are now films, music and software. Any move to enter this market will be confronted by transnational corporations and the governments who support them. Nevertheless, there is a lot more to play for here and the terrain is not as rigidly mapped out as in agriculture and manufactures. Africans are also exceptionally well-placed to compete here because of global audiences’ proven preference of for their music and plastic arts.

Why do you think Hollywood is where it is? A century ago, film-makers on the East Coast struggled under Thomas Edison’s monopolies of electrical products; so some of them escaped to the Far West and kicked off the movie industry there with as little regulation as possible. For his first Mickey Mouse cartoon, Walt Disney ripped off a Buster Keaton movie, ‘Steamboat Willie’ (not to mention Aesop’s fables). Now the Disney Corporation sues Chinese cartoonists for illegal appropriation of the Mickey Mouse logo. The world’s third largest producer of movies (some would say the second) is now Lagos in Nigeria (‘Nollywood’). Most of their movies cost no more than $5,000, a pattern reminiscent of Hollywood when W.G. Griffith was king. American popular culture is still that country’s most successful export. There is no reason why it couldn’t be for Africans too, if they can solve problems of transnational payment that have hitherto eluded them.

Africa must escape soon from varieties of Old Regime that owe a lot to the legacy of slavery, colonialism and apartheid; but conditions there can no longer be attributed solely to these ancient causes. The example of earlier commercial revolutions, reinforced by endogenous developments in economy, technology, religion and the arts, could offer fresh solutions for African underdevelopment. It has long been acknowledged that the rise of capitalism in Europe drew heavily on religion as one of its motors. Max Weber (1981) insisted that an economic revolution of this scope could only take root through a much broader cultural revolution. If Africa’s informal economy has the potential to evolve into a more dynamic engine of urban commerce, what might be the cultural grounds for such a development? The basis for Africa’s future economic growth must be the cultural production of its cities. This in turn rests on:

1. The energy of youth and women

2. The religious revival

3. The explosion of the modern arts

4. The communications revolution

5. The new African diaspora linked to sub-national identities

1. African societies, traditional and modern, have been dominated by older men. Women have benefited less from their opportunities and are less tied to their burdens. In many cases they have been quicker to exploit the commercial freedoms of the neoliberal international economy. Even when men and boys have plunged whole countries into civil war, thereby removing state guarantees from economic life, an informal economy resting on women’s trade has often kept open basic supply lines. The social reality of Africa’s cities is a young population without enough to do and a growing generation gap. The energies of youth must be harnessed more effectively and the chances of doing so are greater if the focus of economic development is on something that interests them, like popular culture.

2. The religious revival in Africa — Christian, Muslim and traditional — has immense significance for economic development. This is often founded on young people’s rejection of the social models and political options offered by their parents’ generation. Fundamentalist and less extreme varieties of religion make a different kind of connection to world society than that offered by the nation-state, based on the assumption of American dominance or of its opposite. They help to fill the moral void of contemporary politics and often offer well-tried recipes for creative economic organization. Christian churches are usually organized and supported by women, even if their leadership is often male.

3. In all the talk of poverty, war and AIDS, the western media rarely report the extraordinary vitality of the modern arts in post-colonial Africa: novels, films, music, theatre, painting, sculpture, dance and their application in commercial design. There has been an artistic explosion in the last half-century, drawing on traditional sources, but also responding to the complexity of the contemporary world. One recent example is the ‘Africa Remix’ exhibition that toured Europe and Japan, a hundred installations from Johannesburg to Cairo, showing the modernity of contemporary African art. The African novel, along with comparable regions like India, leads the world. I have already mentioned the creativity of the film industry.

4. Africa largely missed the first two phases of the machine revolution, based on the steam engine and electric grids; but the third phase, the digital revolution in communications whose most tangible product is the internet, offers Africans very different conditions of participation that they are already taking up avidly. In origin a means of communication for scientists and the military, the internet is now primarily a global marketplace with very unusual characteristics. Like the informal economy, it goes largely unregulated; but this market freedom is harnessed to the most advanced technologies of our era. The internet has also generated new conditions for managing networks spanning home and abroad by radically shortening the time taken by communication and exchange at distance. The extraordinarily rapid adoption of mobile phones has made Africa a worldwide crucible for innovation, such as the first multi-national network in East Africa and the use of phones there for purposes of banking, dealing and circulating price information. Nor should we neglect the role of television as a transnational means of widening perceptions of community.

5. In the last half-century a new African diaspora has emerged, based on economic migration to America, Europe and nowadays Asia. These migrants are usually known away from home by their national identity, but many of them by-pass the national level when maintaining close relationships with their specific regions of origin. They are often highly educated, with experience of the corporate business world, while retaining links to relatives living in the informal economy at home. One consequence of neoliberal reforms has been that transnational exchange is now much easier, drawing at once on indigenous knowledge of local conditions and the expertise acquired by migrants and their families in the West. Remittances from abroad are of immense importance and are bound to play a major role in Africa’s economic future.

How might these separate factors generate sustainable forms of enterprise capable of raising African economies to new levels? Economic success is always a contingent synthesis of existing and new conditions. There is no one model of successful enterprise, just many stories of economic innovation waiting to be discovered by those who will look. Thus the Mourides, a Sufist order founded almost a century ago, constitute an informal state with the state of Senegal (Cruise O’Brien). Their international trading operations are capable of influencing national economies, as when they recently shifted shoe supplies to the USA from Italy to China. A similar network of North African Muslims has been running cars and car parts illegally from Europe to Africa through Marseille on such a scale that the French car industry moved some of its production South to meet the demand. Pioneering communications enterprises in Kenya and Ghana are beginning to be noticed for their exciting ability to tailor modern technologies to local demand. The Nollywood phenomenon offers morality plays to global audiences at an affordable price. We might do well by trying to understand this development.

Conclusion: a key moment in economic history
It is a truism that the global economic crisis of 2008-9 has brought with it another swing in the balance between state and market comparable to that which took place in the watershed of the 1970s. An erstwhile spokesman for neo-liberal markets like South Africa’s Trevor Manuel can now announce a revival of public planning within strong state institutions. The prospects of a new deal enabling some sort of transition from what has been called Africa’s urban informal economy to sustained commercial growth is thus highly moot. Just as structural adjustment in the 80s opened up space for small traders at the expense of the ‘bureaucratic bourgeoisie’, it would be surprising if the present moment did not entail a crackdown on ‘informality’, with a renewed emphasis on tax collection and the funding of public enterprises. There are precedents, however, for a more friendly approach on the part of governments. Thus President Chiluba of Zambia established a street vendors’ desk in his office and removed some of the bureaucratic obstacles affecting at least this sector. At the other extreme, South Africa’s attempt to produce ‘world-class’ cities for the 2010 soccer World Cup has unleashed a bureaucratic war against informal traders and transport operators, exacerbated in some cases by the targeting of foreigners in so-called xenophobic riots. Informal operators have often been quicker to use mobile phones and other information technologies for purposes of transnational trade than bureaucratic firms. It would be a pity if this spin-off from neo-liberalism were stifled by a new dirigisme. I do not offer here predictions of likely scenarios in the coming decades. Rather I have sought to illuminate the development possibilities thrown up in Africa during the second half of the twentieth century by the historical pattern of rapid urbanization, informal market growth and the formation of states resembling Europe’s Old Regime.