The Memory Bank A New Commonwealth — Ver 5.0 Fri, 05 Dec 2014 09:32:51 +0000 en-US hourly 1 Informality: problem or solution? Wed, 03 Dec 2014 21:17:45 +0000 Presentation at the World Bank PSD Forum 2006, Washington DC, April 4-6

Bureaucratic form and informality
Most people attending this Forum live substantially inside what we may call the formal economy. This is a world of salaries or fees paid on time, regular mortgage payments, clean credit ratings, fear of the tax authorities, regular meals, moderate use of stimulants, good health cover, pension contributions, school fees, driving the car to the commuter station, summer holidays by the sea. Of course households suffer economic crises from time to time and some people feel permanently vulnerable. But what makes this lifestyle ‘formal’ is the regularity of its order, a predictable rhythm and sense of control that we often take for granted. I only discovered how much of this had become natural to me when I went to live in a West African city slum forty years ago.

I would ask questions that just didn’t make sense to my informants, for example concerning household budgets. How much do you spend on food a week? Households were in any case often unbounded and transient. Assuming that someone had a regular wage (which many didn’t), it was pitifully small; the wage-earner might live it up for a day or two and then was broke, relying on credit and help from family and friends or not eating at all. A married man might use his wage to buy a sack of rice and pay the rent, knowing that he would have to hustle outside work until the next paycheck. In the street economy people were moving everything from marijuana to refrigerators in deals marked more by flux than stable income. After completing a doctorate, I went to work in a development studies institute. There I saw my main task as trying to get this ethnographic experience across to development economists. My use of the conceptual pair formal/informal came out of those conversations.
The idea of an ‘informal economy’ is entailed by the institutional effort to organize society along formal lines. ‘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 have been those of bureaucracy, particularly of national bureaucracy, since society has become identified to a large extent with nation-states. This identity may now be weakening in the face of the neo-liberal world economy and a digital revolution in communications (Hart 2001). Any initiatives addressing informal practices from the perspective of public bureaucracy need to be put in this historical context. As I understand it, one issue we are asked to consider here concerns unfair competition between firms that accept the constraints and benefits of public regulation and those that don’t. The latter don’t pay taxes, settle disputes their own way, feel free to ignore health and safety measures and so on. Surely it should be government policy to formalize more informal operations. In answer to this question, I would first point out that it is possible to exaggerate the gap between the two sides.
Formal and informal organizations 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 themselves as well as between them. There is a widespread perception that the formal/informal split is the product 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 (Weber 1978). It still has the ability to co-ordinate public services on a scale that is beyond the reach of individuals and most groups. So it is disheartening that bureaucracy (‘the power of public office’) should normally be seen now as the negation of democracy (‘the power of the people’) rather than as its natural ally.
Forms are necessarily abstract and a lot of social life is left out as a result. This can lead to an attempt to reduce the gap by creating new abstractions that incorporate the informal practices of people into the formal model. Naming these practices as an ‘informal sector’ is one such devise. They appear to be informal because their social forms are largely invisible to the bureaucratic gaze. Mobilizing the informal economy will require a pluralistic approach based on at least acknowledgement of those forms. Equally, the formal sphere of society is not just abstract, but consists also of the people who staff bureaucracies and their informal practices.

A very short history of the informal economy
In Peddlers and Princes (1963), Clifford Geertz addressed the contrasting face of Indonesian entrepreneurship. He identified two economic ideal-types in a Javanese town. The majority were occupied in a street economy that he labeled ‘bazaar-type’. Opposed to this was the ‘firm-type’ economy consisting largely of western corporations who benefited from the protection of state law. These had form in Weber’s (1981) sense of ‘rational enterprise’ based on calculation and the avoidance of 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. Geertz considered what it would take for a group of Reform Moslem entrepreneurs to join the modern ‘firm’ economy. They were rational and calculating enough; but they were denied the institutional protection of state bureaucracy which was largely the preserve of the existing corporations.
Here and in his later work on the Moroccan suq (Geertz, Geertz and Rosen 1979), Geertz pointed out the irony of an economics that takes the bazaar as its model for studying the decisions of individuals in competitive markets, while treating as anomalous the monopolies preferred by capitalist firms and state bureaucracy. Even more curious, the modern discipline made this discovery in the late 19th century, just when a bureaucratic revolution was transforming mass production and consumption along corporate lines. This was when the more powerful states awarded new privileges to capitalist corporations and society took its centralized form as national bureaucracy (cf. Hart 2005). Perhaps because he was poking fun at the economists, Geertz’ analytical vocabulary was not taken up by them.
The antithesis of the state-made modern economy had not yet found its academic name. This came about through a paper I presented at a Sussex conference on ‘Urban unemployment in Africa’ in 1971. My main message (Hart 1973) was 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. Following Weber (1981), I argued that the ability to stabilize economic activity within a bureaucratic form made returns more calculable and regular for the workers as well as 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. The ‘formal sector’ consisted of regulated economic activities and the ‘informal sector’ of all those, both legal and illegal, lying beyond the scope of regulation. I did not identify the informal economy with a place, a class, a type of business or even whole persons. Everyone in Accra, but especially the inhabitants of slums like Nima where I lived, 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 analysis had its roots in what people generate 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.
I hoped to interest economists by presenting my ethnography in a language they were familiar with (I call it ‘economese’, how to sound like an economist without any formal training). The idea of an ‘informal sector’ was quickly taken up as a concept by some of them, so quickly indeed that a report by the International Labor Office (ILO 1972) applying the concept to Kenya came out before my own article had been published. The ILO 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. Following the ‘growth or bust’ policies of the 1960s, they advocated ‘growth with redistribution’, that is, helping the poor out of the proceeds of economic expansion. This reflected a shift in World Bank policy announced by its president, Robert McNamara, in Nairobi a year later. By now the Bretton Woods institutions were worried about potential social explosions; and they felt that more attention should be paid to peasants and the urban poor. A vogue for promoting the ‘informal sector’ as a device for employment creation fitted in with this shift.
Most economists saw it in quantitative terms as a sector of small-scale, low-productivity, low-income activities without benefit of advanced machines; whereas I stressed the reliability of income streams, the presence or absence of bureaucratic form. When the bureaucracy tried to promote the informal sector – by providing credit, government buildings or new technologies, for example – it killed off the informality of the enterprises concerned and not coincidentally exposed participants to taxation. The association of the idea with the sprawling slums of Third World cities was strong; but the ‘commanding heights’ of the informal economy lay at the centers of political power itself, in the corrupt fortunes of public office-holders who often owned the taxis or the rented accommodation operated by the small fry. The Marxists argued that the argument put a positive gloss on exploitation, whereas they believed that the poor subsidized capital accumulation with their cheap goods and services (Bromley and Gery 1979).
That was the 1970s. The following decade saw another major shift in world economy following the lead of Reagan and Thatcher. Now the state was no longer seen as the great provider; rather ‘the market’, freed of as many encumbrances as possible, was the only engine of growth. This coincided with the imposition of ‘structural adjustment’ policies whose main effect, if not explicit aim, was to open up developing economies to the free flow of western capital. This involved dismantling the protectionism that had hitherto allowed states to operate semi-independently in a Keynesian fashion. The result was the collapse of state expenditure, privatization of public services and a shift in provision towards foreign NGOs thought to be more efficient than corrupt government officials. The informal economy took on a new lease of life as a zone of free commerce, competitive because unregulated. In the absence of public resources, responsibility was thrown onto the invisible self-help schemes of the people themselves. The World Bank played its part in all this, but the chief instigator was the IMF. By now, the rhetoric and reality of development had been effectively abandoned. The Third World suffered the largest income drain in its history, in the form of repayment of debts incurred during the wild banking boom of the 1970s (George 1990).
Two decades and a whole lot of globalization later, the problem is different. There is now substantial inward investment and foreign businesses are feeling the lack of an effective regulatory environment. To some extent this means boosting national bureaucracy, which is rather contrary when the legitimacy of states was deliberately undermined in the first place so that money could get in and out freely. Now the call is out 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. The ubiquity of this problem is reflected in my having been approached to take part in three separate standardization exercises recently. One was organized by the ILO and had to do with modifying labour law in the light of informal practices; another concerned norms for international trade in organic foods (the International Federation of Organic Agriculture Movements); and a third, which hasn’t yet got off the ground, was the initiative of a Brazilian NGO to grade rural municipalities worldwide as potential recipients of aid from the multilateral donors. Clearly we have reached a stage where national and local institutions are themselves becoming globalized.

Combining the formal and informal sectors
‘Form’ is an idea whose origin lies in the mind. Form is the rule, the invariant in the variable. It is predictable and easily recognized. For example, how do we go about compiling a birdwatcher’s guide? It would not do to illustrate each species with a photograph of a particular bird. It might be looking the wrong way or be missing a leg… So instead we offer a caricature showing the distinctive beak, the wing markings and so on. That is why idealist philosophers from Plato onwards thought the general idea of something was more real than the thing itself. Words are forms, of course. In his Science of Logic, Hegel shows the error of taking the idea for reality (James 1980). We all know the word ‘house’ and I might think there is nothing more to owning one than saying ‘my house’. But before long the roof will leak, the paint will peel and I will be forced to acknowledge that my house is a material thing, a process that requires my attention. The ‘formal sector’ is likewise an idea, a collection of people, things and activities that share an idea; but we should not mistake the idea for the reality that it partially identifies.
What makes something ‘formal’ is its conformity with such an idea or rule. Thus formal dress in some societies means that the men will come dressed like penguins, but the women are free to wear something extravagant that suits them personally – they come as variegated butterflies. The men are supposed to look the same and so they adopt a ‘uniform’ that cancels out their individuality. Formality endows a class of people with universal qualities, with being the same and equal. What makes dress ‘informal’ is therefore the absence of such a shared code. But informality is relative to the eye of the beholder. Any observer of an informally dressed crowd will notice that the clothing styles are not random. We might ask what these informal forms are and how to account for them. The world’s ruling elite can be identified as ‘the men in suits’, because they choose to wear a style invented in the 1920s as an informal alternative to formal evening dress.
There is a hierarchy of forms and this hierarchy is not fixed for ever. The twentieth century saw a general experiment in impersonal society whose forms were anchored in national bureaucracy, in centralized states and laws carrying the threat of punishment. The dominant economic forms were also bureaucratic and closely linked to the state as the source of universal law. Conventionally these were divided according to principles of ownership into ‘public’ and ‘private’ sectors. This uneasy alliance of governments and corporations is now sometimes classified as ‘the formal sector’. What they share, at least on the surface, is conformity to the rule of law at the national and increasingly international levels. How then might non-conformist economic activities, ‘the informal economy’, relate to this formal order? They may be related in any of four ways: as division, as content, as negation and as residue. The first two imply a positive relationship of interdependence, the third is antagonistic and the last relatively autonomous.
The moral economy of capitalist societies is based on an attempt to keep separate impersonal and personal spheres of social life (Hart 2005). The establishment of a formal public sphere entailed another based on domestic privacy (Elias 1982). Even if one side came first historically, the other was subsequently built up to constitute with the first complementary halves of a single whole. Most people, traditionally men more than women, 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 is the means whereby the two sides are brought together, so that their interaction is an endless process of separation and integration that I call ‘division’. The division of the sexes into male and female (vive la différence!) is the master metaphor for this dialectic of complementary unity. In Hegel’s terms (James 1980), any blurring or confusion of the paired categories is a phase of ‘negative dialectic’, preliminary to the formation of a new idea. Identifying informal practices, even criminal behavior, within the bureaucracy constitutes such a blurring: but to deny this would be to cling to a utopian ideal.
For any rule to be translated into human action, something else must be brought into play, such as personal judgment. So informality is built into bureaucratic forms as unspecified ‘content’. This is no trivial matter. Workable solutions to problems of administration invariably contain processes that are invisible to the formal order. For example, when workers cannot or will not go on strike, they sometimes ‘work-to-rule’ (Scott 1998). This consists of following their job descriptions to the letter (the formal abstraction of what they actually do) without any of the informal practices that actually make these abstractions function. Everything grinds to a halt as a result. Or take a chain of commodities from their production by a transnational corporation to their final consumption in a Third World city. At several points invisible actors appear filling the gaps that the bureaucracy cannot handle directly, from the factories to the docks to the supermarkets and street traders who supply the cigarettes to smokers. Informal processes are indispensable to the trade, as variable content to the universal form.
Of course, some of these activities may break the law, through a breach of health and safety regulations, tax evasion, smuggling, the use of child labor, selling without a license etc. The third way that informal activities relate to formal organization is thus as its ‘negation’. Rule-breaking takes place both within bureaucracy and outside it; and so the informal is often illegal. It is hard to draw a line between smiling women with babies who sell oranges on the street and the gangsters who exact tribute from them. When the rule of law is weak or absent, the forms that emerge in its place, at all levels of society, are often criminal in character. The informalization of the world economy is to a large extent criminal and this includes white collar crime. A good part of the problem lies in the inadequacy of national regulation at this level. And it has to be said that the western governments have not exactly been upholding the rule of law themselves of late. One has only to think of John Perkins’ book Confessions of an Economic Hit Man (2004) to realize that large organizations also break the rules. Modern society rests on protecting the public image of bureaucratic processes from a reality that mixes formal order with corruption and criminality in unacceptable ways.
The fourth category is not so obviously related to the formal order as the rest. Some ‘informal’ activities exist parallel to it, as ‘residue’. They are just separate from the bureaucracy. It would be stretching the logic of the formal/informal pair to include peasant economy, traditional institutions and much else besides within the rubric of the ‘informal’. Yet the social forms endemic to these often shape informal economic practices. What is at stake here is whether society is presumptively just one thing – one state with its rule of law – or is able to tolerate a measure of legal pluralism, leaving some institutions to their own devices. The ubiquitous term ‘community’ addresses this problem.
Communities exist to the extent that their members understand each other for practical purposes; and so they operate through culture (meanings held in common). They do so by means of implicit rules (customs) rather than state-made laws. They usually regulate their members informally, relying on the sanction of exclusion rather than punishment. Social anthropology in its prime focused on the study of small-scale societies ruled by custom, people who exchanged meanings specific to themselves (Evans-Pritchard 1951). European empires, faced with a shortage of resources, turned to ‘indirect rule’ as a way of incorporating subject peoples into their systems of government on a semi-autonomous basis. This legal pluralism delegated supervision of indigenous customary forms to appointed chiefs and headmen, reserving the key levers of power to the colonial regime (Asad 1973). Any serious attempt to link the formal and the informal today requires a similar openness to plurality of form.

What is to be done?
In The Other Path (1989), Hernando De Soto argued that Peru was a mercantilist state whose over-regulated and impenetrable national bureaucracy served the economic interests of a narrow clique and excluded the vast majority from effective participation in development. The latter were an entrepreneurial peasantry flocking in ever-larger numbers to the main cities. They were forced to operate informally, that is outside the law, in sectors such as housing, trade and transport. Peru’s tradition was inherited from the Spanish empire period and the term ‘mercantilism’ has been used to describe European political economy from the 16th to 18th centuries. In was succeeded, principally on the initiative of Britain, by a free-trade regime more conducive to industrial capitalism. Peru’s development in the 20th century was parallel to the West’s earlier. Massive migration to the towns led in both cases to legal exclusion of the poor by mercantilist bureaucracy; but in the West the ‘informals’ won in the end by cheapening production, making the regulations irrelevant and from time to time erupting in violence. Peru was thus headed for a revolution along French or Russian lines unless the national bureaucracy simplified, decentralized and deregulated itself.
In The Mystery of Capital (2000), De Soto portrays Peru and other poor countries as being trapped in a world economy dominated by the first industrial nations. Red tape is mainly an effect of a global regime that forces marginal states to adopt inappropriate institutional practices. The result is the same: migrants pile up in the cities and are forced to work outside the law. De Soto claims that there is no shortage of wealth in the non-western world. What is missing is a property regime that would enable the masses to realize their wealth as investment capital. The banking sector is dominated by foreign firms and it runs along lines now standard in the rich countries. Informal property rights cannot be converted into collateral for loans. This is particularly unfair since countries like the USA, which dominates this global financial bureaucracy and the institutions that supervise world trade and investment, made the transition to modern capitalism by giving flexible informal practices and decentralized violence full rein in their own development. It follows that similar flexibility has to be shown today if the poor urban masses are to have a chance of joining global development on less unequal terms. The alternative is more recruits to terrorist networks and large social explosions before long. I would substantially agree with this analysis.
So where does the call to formalize the informal economy come from? Whose interests does it serve? To recapitulate Geertz, it is the bazaar whose competitive individualism most embodies the spirit of the market, not bureaucracy. And economics in its official guise serves mainly to confuse us on this point. I have just written a short book (Hart 2005) about the main conflict of our time – ‘intellectual property rights’ versus ‘piracy’ — which identifies similar forces lined up against each other. If the Bretton Woods institutions see their role as shoring up a new international bureaucratic order suitable for private sector development, can this be presented as an extension of legitimate rule on a global scale? I should make it clear that I am generally in favour of bureaucracy and the rule of law as, in principle, means towards greater democracy and emancipation from poverty. I don’t want to live in a world run by gangsters, whatever labels they trade under. So there is some point to asking how the formal and informal aspects of economic organization might be more effectively coordinated.
The ‘informal economy’ has had a brilliant success over more than three decades. It lends the appearance of conceptual unity to whatever goes on outside the bureaucracy. Now, perhaps fearing its own isolation in a ‘planet of slums’ (Davis 2004), the bureaucracy is offering partnership to the ‘informals’. The formal-informal dialectic is intrinsic to both the bureaucracy and the informal economy, as well as between them. We need to know how formal bureaucracy works in practice and, even more important, what social forms have emerged to organize the informal economy. If I once sought to translate my own ethnographic experience into ‘economese’, it is now time to reverse the process and examine the institutional particulars sustaining whatever takes place beyond the law.
The historians of comparative jurisprudence (Maine 1906, Maitland 1957) emphasized the concrete particularity of the customary legal institutions they studied in medieval England or Victorian India. For all their imperialist vision, they refused to sacrifice detail for the sake of generalization. Modern ethnographers have likewise documented in immense detail the kinship institutions and religious practices of local groups in Africa and the Pacific. This is no longer fashionable: anthropologists today are funded to study ethnicity, gender, AIDS and, of course, the informal economy. In my own research I focused on specific individuals and was obliged to study the contractual forms of their enterprises, their kinship ties and family organization, their friendship networks and voluntary associations, their religious affiliations, their relationship to criminal gangs and corrupt officials, their patronage systems and political ties (Hart 1988). Only later did I join the rush to generalize about the population explosion of Third World cities. The issue of criminal organization inside and outside the formal bureaucracy cannot be wished away. Formalizing the informal economy requires us to confront the cultural specificity of economic activities that cross the great divide.
To sum up, using the fourfold categorization I developed above. Division: Any attempt to divide an economy into complementary halves requires a massive cultural effort of both separation and integration. This idea of interdependent, but separate halves of a social whole is a powerful undercurrent in development discourse and should be subjected to revision. Content: The idea of informality as the unspecified content of abstract forms favours leaving more to people’s imagination and accepting the legitimacy of most informal practices. Negation: When the informal is illegal, the obvious response is to crack down on rule-breakers; but such moves are often merely cosmetic — the biggest offenders escape and the law is made to appear an ass. The number of legal offences could often profitably be reduced. Residue: Finally, governments might adopt a genuinely hands-off approach towards semi-autonomous communities within their jurisdiction. If all of these modes of formal/informal linkage were considered, there might be some prospect of bureaucracy and the people entering a new partnership for development.
What is striking in all this is the international agencies’ short-sightedness and lack of institutional memory. The World Bank in particular, over the last half-century or so, has pursued contradictory strategies, often within a decade of each other. I have been involved with the concept of the informal economy now for forty years, if you count the research I did in Ghana on which the term is based. I have come to see the issue as a long struggle to redefine the relationship between bureaucracy and the people in the context of the evolution of market economy. Seen in the light of the whole period since 1945, it is hard to avoid the conclusion that international and national institutions have lost considerable legitimacy in the current decade.
A lot depends on whose perspective you take on these issues. I started off as a young ethnographer four decades ago asking how little people survived in the cracks of the state-made economy; but the informal economy has flourished since as a result of market liberalization. To some extent, bureaucratic institutions need to be more flexible in their treatment of informal practices, so that more people can take shelter under the rule of law. Informality is a problem, for sure, but it must surely be part of any long-term solution.

Postscript: on real and artificial persons

Corporations and living people differ in the purpose for which they were created, in the strength which they possess and in the restraints under which they act. Man is the handiwork of God and was placed about earth to carry out a Divine purpose; the corporation is the handiwork of man and created to carry out a money-making policy. There is comparatively little difference in the strength of men; a corporation may be one hundred, one thousand or even one million times stronger than the average man. Man acts under the restraints of conscience, and is influenced also by a belief in a future life. A corporation has no soul and cares nothing for the hereafter…
(William Jennings Bryan)

General Forms have their vitality in Particulars, and every Particular is a Man.
(William Blake)

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Varieties of community currency Mon, 17 Nov 2014 12:17:47 +0000 LETS and ‘open money’
The late twentieth century saw a revival of self-organized credit money, paradoxically in the leading centres of western capitalism. LETS, meaning ‘Let’s do it’, but later elaborated as Local Exchange Trading Systems, began in British Columbia in 1982-83 at the initiative of Michael Linton. This was in response to a temporary downturn in the local economy because of reduced demand for the defence industry and provincial government finances. Since then the LETSystem design has spread through the English-speaking countries and beyond, to France, Germany, Japan and Argentina. Many thousands of people have joined LETS systems which until now have generally been independent of each other. Most communities and even nation-states depend heavily on imports and exports and their internal economy has a weakly developed structure. Community currencies, on the other hand, sustain self-regulating economic networks allowing members to issue and manage their own money supply within a bounded system. As such, they may be conceived of as a way of closing off local communities from the market economy; but Linton has subsequently emphasized the need to integrate these circuits into existing commerce.

In LETS, people, businesses and organizations open accounts in one or several systems, with the unit of account, often named distinctively for local cultural resonance, made equivalent to the national currency for ease of calculation. Member accounts start at a zero balance with no deposit of normal money nor any requirement to buy before selling. No interest is paid or charged on balances. There is a register of members (which would normally include businesses as well as individuals and organizations), sometimes listing the services they offer. Payment for goods and services may be in some combination of local and national currency, with only the former being registered in the circuit. Transfers and balances are recorded by a registry which is a virtual bank with no ‘real’ money. Minimal administrative expenses are recovered from member accounts in community currency on a ‘cost of service’ basis. There is never any obligation to trade; and, if desired, members may know the balance and turnover of other members. In the latest stage of the technology, these transactions are recorded off-line on smart cards capable of registering a plurality of currencies and then communicated card-to-card via the internet. Any existing bank could perform this function for a large number of such networks, but they do not.

Each individual member listed on the common register issues the currency whenever the balance of their exchanges drops below zero. In doing so, they make a promise to honour their commitment, acknowledging the gift of goods or services made in return. At any moment, the totality of exchanges sums to zero. These multiple-issuer currencies are more robust than the conventional, single-issuer variety in that the ability of members to trade is not diminished by the disappearance — by default, migration, death or whatever — of accounts with substantial negative balances. Even so, trade can dry up if some members accumulate significant positive balances and find little to buy within the circuit. Most of all such a system offers a means of economic empowerment to individuals as members of communities brought together in a practical way through a circuit of exchange with its own medium of communication. This in turn is an education in citizenship of a new kind, where society may take the form of many levels of association, not just those depending on the economic monopoly of the nation-state.

A proper currency service provider would enable users to create their own systems in the space available and give them access to other similar systems. A stand-alone community currency is like a radio or TV that can only tune to one station, a computer with just one programme. Supporting trade between people who keep their accounts in different currencies requires that the registries can communicate with each other through a cross-clearing network. This would be operated primarily through the internet, using its own money domain naming system (MDNS). The MDNS proposed by Linton would start with national top-level domains responsible for the registration of regional sub-domains, which would be in turn responsible for local registration. This facility would be further enhanced by ‘multi-cc’ smart-card systems. The cards can currently carry up to 15 different currencies at a time, off-line and anonymous, and are designed to make community money systems easily adopted in the retail sector. The card system enables every participating business also to have a loyalty loop specific to their own business, if they choose. The combination of the cross-registry clearing and smart card systems would create a platform for virtually any form of open money. When the LETSystem software achieves a kernel of cross-platform protocols capable of defining the integrated platform of any application, it will become open source software, open money in the fullest sense. Of course, co-ordination in this area is difficult when there is no one body concerned with establishing standards.

A powerful ‘free (libre) and open source software’ movement (FLOSS) has emerged in recent years, building on the achievements of the Free Software Foundation’s Richard Stallman and the founder of Linux, Linus Torvalds (Hart 2005). The latter is a free operating system that has gained phenomenal popularity in recent times because it allows users to modify software to suit their own needs. Linux is a collaborative effort of thousands of programmers interacting over the internet and is therefore not owned or controlled by any one company. By exposing software source code to peer review by a community of users quickly and often on the internet, it has posed a strong challenge to the closed business model of seeking to derive monopolistic rents from secret intellectual property. The robustness of the open source model lies in its being able to draw on a much larger pool of potential developers than could ever be employed by a single firm. In similar fashion, the spread of community currencies would benefit from sharing software developments and other forms of innovation within a community of associations using open money. Already community currency design, code and other relevant information has been made freely available for others to use and to contribute to its development. Moreover, like open source, these developments take place through an egalitarian (‘flat’) network rather than through hierarchical institutions. There are other parallels between the two cases. Open source appears to be a driven by a logic of giving and sharing, more than financial reward; and in circuits organized through community currencies concern with money prices is often secondary to the individual and collective purposes of exchange.

There is a paradox in my use of the terms open and closed in this context. For the majority of community currencies such as LETS the definitive principle is that the exchange circuits they sustain are closed. In contrast, the markets sustained by conventional money are open-ended networks of limitless extent, so that money seems to drain away to unseen centres of power that are invariably located elsewhere, leaving us powerless to prevent its passing. The whole point of LETS is that the purchasing power generated by trade comes round again to nourish the participating community; and it promotes internal production rather than the import/export pattern that predominates in mainstream markets. This becomes more obvious when the circuits are small, as they usually are, and when the community supporting a currency is a well-defined local area. But open money circuits may be scaled up to a much larger membership that could easily be dispersed around the internet. There are trade-offs between these poles of association, small- and large-scale, local and virtual, closed and open. Some may choose the intimacy of relations with those they know well, whereas others may prefer looser connection with a large pool of strangers. If they are to succeed, community currencies must embrace both poles. Thus, the greater control afforded by closed circuit networks needs to be offset by an open source approach to the software needed to operate community money. This dialectic of local community and global network, reflected in the combination of closed circuits of exchange and open distribution methods, has been a constant feature of LETS’ evolution over the past two decades.

The variety and limitations of community currencies
The general aim of community currencies is to enable trading and exchange, when purchasing power in the conventional market economy is especially defective. But clearly the form lends itself to a wide variety of social and ecological purposes whose rationale may not be narrowly economic in that sense. LETS and similar systems are differentiated in a number of ways. Of these the most important is the degree of integration in the national economy, but others include: the monetary measure (based on the national currency or on hours of work, for example); the organizers’ reliance on free or salaried labour or government grants; digital or material records of payment; involvement of businesses or exchange of services between individuals only; local or virtual association; forms of leadership and participation; and so on. Many LETS associations are reluctant to band together in case their autonomy is compromised. They still bear the hallmarks of Victorian philanthropy, aiming only at the poor, forming boards and committees, protecting their insular and clubby nature against all-comers. Such institutions are usually time-consuming and dogmatic, with a bias against business and for public grants. Their main motive appears to be to get away from the conventional economy into a separate world of their own, however small.

At another extreme, community currencies may, in their desire for economic integration, mimic national money so closely as to resemble it more than the family of currencies associated with the LETS movement. The Limehouse Townhall in London’s East End has been occupied since 2001 by a miscellaneous network of artists and activists. In October 2005 they launched a series of events known as the World Summit for Free Information Infrastructure ( As part of their engagement in the local economy, they also launched their own currency, known as the lime. This is a bright green paper scrip similar in appearance to supermarket discount tokens. Denominations are 1, 2 and 5 units upwards and have purchasing power equal to the pound sterling. The lime circulates in the local community, where it is accepted by some shops and restaurants. These in turn may redeem the tokens for national currency whenever they choose; some of them offer a discount of ten percent to the issuing authority (not to the customers). Although it is intended as a permanent feature of local life, the lime is mainly used now as an event currency, with many goods and services available internally only in exchange for the community currency.

The organizers of the lime have discovered the joys of central banking: the sole issuer of the currency has the power to create money that did not exist before, to the extent that tokens are not immediately redeemed for normal cash. The scheme also has the merit of being easily understood by participants, some of whom may be just passing through the community; and it adds flexibility to local markets. Its drawbacks are those of conventional currency. The lime is impersonal, undemocratic in origin (single-issuer as opposed to multiple issuers), easily counterfeited and unconnected to the new information technologies. As such, it is a long way from LETS; but what it loses by mimicking the pound sterling, it gains in terms of cultural acceptance.

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Keith Hart Interview in Porto Alegre Sat, 16 Aug 2014 06:41:48 +0000

Transcription of a video interview with Ruben Oliven and Arlei Damo held at UFRGS postgraduate programme in Social Anthropology, Porto Alegre, Brazil on 27 May 2011. To be published in Portuguese in Horizontes Antropologicos 45, January 2015.

Q: This is an interview with Professor Keith Hart who has already been here several years ago. The first question, Keith, is how did you become an anthropologist?

KH: I was a professional student. I never imagined another life than to be an academic. When I was at school the high prestige subjects were Classics (Latin and Greek) and Maths. So I chose them; but when I got to Cambridge, where I was a classicist, mostly translation, I found there were several things about a career in classics that didn’t appeal to me. One was that the research possibilities were very narrow: the idea was to build up the textual tradition and most of the great authors had been dealt with long ago; so if I did any research, it would be on fragments of an obscure 4th century satirist or something like that. The second thing was that Classics was in decline: there were lots of bright boys like me and not many jobs.

This was a time in Britain, the early 60s, when the social sciences were booming. Sociology had not existed before as a proper subject, but suddenly it was taking off. I was an opportunist career academic more than anything. I loved the Classics, but it wasn’t offering me much chance, so I decided to change to social science, probably sociology, but sociology was part of the Economics faculty and, curiously in view of my later interest, economics was a turn off for me. Then I heard that social anthropology was sociology with travel thrown in and I thought that sounded good. But there were two decisive events. I had a rowing coach called Claudio Vita-Finzi who was a geographer from the Turin Jewish aristocracy. He used to spend the winters studying desert erosion in the Mediterranean basin, so he disappeared during the bad weather and went to Lebanon or Sicily to see how the goats were doing it; and then he would come back in the spring to take part in the rowing and all the rest. I thought that was good and maybe social anthropology could give me something like that.

The second thing is that Jack Goody was in my college and we each spent some time together in the college bar. One day he told me he was organizing a seminar on clientship. It was a hot topic that year – Maquet had just published his book on Ruanda. I was only an undergraduate, but I offered to give a paper on Roman clientship. Then I forgot. One day – it was Monday – he said you know you are on this Wednesday. Oh my God! If I was going to write an essay for my classics tutor, I would have to read all the original sources on clientship (Caesar, Cicero, Tacitus etc) and build my argument exclusively from references to these texts. But I didn’t have the time for that; so I went to the library and mugged up on some secondary sources in English like the Cambridge Ancient History. If I had presented an essay based on these sources to my classics tutor, he would have thrown me out. So I was afraid and anxious when I went to this anthropology seminar and gave my talk. People were all over me: they said how wonderful, how erudite, how sophisticated. And I thought these people have no intellectual standards. I now realised I could ask any question I liked in anthropology and go away and do it.

Q: Why did you turn to economic anthropology and what was Goody’s influence?

KH: My main interest as an undergraduate was in religion. I took a particular interest in millenarian movements, cargo cults and that sort of thing. I recall reading in great detail Raymond Firth’s Primitive Polynesian Economy which I found impressive; but my favourite ethnography was by the great Viennese anthropologist, S.F. Nadel, who joined Malinowski and wrote a book on a Nigerian kingdom called A Black Byzantium which was published during the Second World War and I still think it’s the best account of political economy by an anthropologist that I have ever seen. The main influence on me as an undergraduate was Audrey Richards who was Director of the African Studies Centre. She gave a seminar on urbanization and migration in Africa and this shaped my choice of PhD topic.

It’s hard to remember, but in the 1960s the anti-colonial revolution had a major effect on young people in the West. Our heroes were Ho Chi Minh. Fidel Castro, Mao Tse Tung, Kwame Nkrumah. When we burnt American flags outside their embassy, these were the people who inspired us. There was a very real sense that African independence, which had only just occurred, had significance for the whole world, including the politics of the so-called advanced countries. So my research project was conceived of as being in politics. I wanted to see how these rapidly growing cities absorbed migrants and how they incorporated them into the political project of the new nation through voluntary associations, political parties and so on.

But when I got to Ghana to do my research, I found that it was a police state and nobody wanted to talk about politics, least of all to me. So I was in trouble. I couldn’t pursue what I wanted to do. I went to live in a slum area because I wanted to study people from Northern Ghana whom Jack Goody and Meyer Fortes had studied; and I noticed that the street economy was very lively; so I thought I could study that. I could do research on people buying and selling stuff and forget about politics. So I switched. In the process I discovered that I come from Manchester and that Manchester was the home of liberal economics; I saw that I had absorbed an enormous amount of practical wisdom about market economy just by growing up there. I realised that I had a lot of cultural knowledge about economy that I had not been aware of; and this gave me an advantage over these people who had to learn it from scratch. They came to me for money, for jobs and for all kinds of advice. I found myself being drawn into their economy, not just as someone studying it, but as a player in a way. I also had a problem.

There were six secret policemen attached to me because I was quite visible, the only white man in this whole slum area and they were trying to find out what kind of espionage I was involved in. The place was a criminal bad lands that the police could not enter routinely, but every now and then they would invade with trucks, dogs and guns and catch somebody. Afterwards there would be a local enquiry: how did they know? who pointed the finger? And guess who was the prime candidate for police spy. Me. At some point it all began to get too much for me. I was worried that I might be expelled from the country. I went to see the head of the sociology department at the University of Ghana and told him that the police thought I was a CIA agent and could he write me a letter saying that I am not. And he said, How do I know you are not? This is the guy who met me at the airport when I arrived as Jack Goody’s student. He later told me that he had seen my name on a list for deportation…

I decided that I couldn’t live in this place unless I really crossed the line to join the people I lived with on their side of the law. Maybe I have a criminal nature anyway. I was already a professional gambler and had been a member of the Cambridge underworld. This underworld when I was a student was based on food, with corrupt kitchen managers who stole the food from the colleges and sold it to Cypriot restaurateurs; they then made sure that college dinners were so bad that the students, even though they has paid in advance, would prefer to eat in the Cypriot restaurants. There was also an incipient Italian cement and construction mafia, jockeys and tipsters from Newmarket, the main horseracing establishment, and police of course – you always find police in an underworld. I already had all that, so maybe I was pre-adapted to this life as a criminal. So the best field notes I had were from criminal enterprises that I was part of. That was how I became a specialist in economy, through the street economy of Accra which I later turned into the idea of an informal economy. After I returned to England and finished my PhD, I worked for The Economist part-time for three years as a journalist and learned a lot from that.

As for Jack Goody, he was my only teacher as an undergraduate and a graduate. At the time I thought he didn’t teach me anything. In the 60s we all thought we were orphans; we believed that we owed our parents and teachers nothing, even though we were the beneficiaries of their having fought and defeated fascism, they built the welfare state that gave us the education, improved health and all the rest that we were living off, that sustained the prosperity that we took advantage of. And yet we still believed we owed our parents nothing and our teachers even less. I very rarely went to lectures. I didn’t believe these people had anything to teach me and I was sure that Jack Goody had nothing to teach me. I don’t think he ever read anything that I wrote. Audrey Richards was a great gossip and she told me once that Jack had asked her what I was writing my thesis about. He was my thesis supervisor. She told him something and he said I am sure he will do OK. He was too busy writing all his books.

In 1976 he started writing this long list of books about the difference between Africa and Eurasia; the first book was called Production and Reproduction. In it he has a one and a half page Preface in which he says something about his life – how he was in the war and went to North Africa, he was in an Italian prisoner of war camp, escaped into the mountains and was caught, he got interested in anthropology through reading Frazer’s Golden Bough. Then he lays out the three main principles that guide his approach to anthropology. A lot of what he writes about his life and times is somewhat partisan. But there is something different about this Preface, it is very honest; and when I read these three points – I have forgotten for now what they were – I found that I agreed entirely with them, that they were in fact my guiding principles too. It just wasn’t possible that I had invented these three points independently – he must have given them to me! In other words, he taught me, but I wasn’t aware of it.

There is no question, I am pursuing a line that Jack Goody defined, but I was so arrogant and ignorant when he was teaching me that I didn’t acknowledge it and it is only now that I can see it. In fact, next week I am giving the first annual Jack Goody lecture at the Max Planck Institute for social anthropology in Halle, Germany and my title is “Jack Goody’s vision of world history and African development today”. It is a short version of a book I am writing whose theme is that African development should, at least initially, be understood in terms of Jack Goody’s way of approaching Africa’s distinctiveness. He did not address what Africa became in the 20th century, so I see my book as taking Jack Goody’s framework – which is essentially Childe’s notion of the urban revolution that produced all agrarian civilizations except in Subsaharan Africa – to argue that the urban revolution took over Africa in the last century. Now in my old age I write review essays in which I try to acknowledge my master, Jack. But when I was young and callow, I wasn’t willing to do that.

Q: As a result of your research in Ghana, you developed the term, informal sector, which had a life of its own and practically became universal in the social sciences. So how useful do you think this term still is and do you think we can speak of an informal sector as opposed to a formal sector or are they so intertwined that it is difficult to use them separately? Can you say how the informal economy is related to the street economy that you have talked about?

KH: For me, street economy is a casual descriptive term, not a concept. The successor concept for me is the human economy. The informal economy is what people do for themselves and I have now taken that idea as something more inclusive that might help us to think about humanity. Nowadays it is more usual for people to talk of informality than of the informal sector or economy. Informality still has a value, but it is limited. The notion of a sector is deeply misleading. We speak of the agricultural or manufacturing sectors and these tend to be in different places, so to talk of an informal sector implies that is taking place over there.

When I wrote my original article on the topic, I was in a development outfit at the University of East Anglia around 1970, a time when the Americans began to lose the Vietnam War, undermining the international monetary system, and then in 1971 the dollar went off gold. This was when the confident American idea that poor countries could get rich by becoming modern like them was clearly in ruins. People were flooding into Third World cities, but it wasn’t obvious what there was for them to do there – jobs conceived of as formal employment accounted for very few people. The other side in the Cold War was beginning to win the argument with left-wing and revolutionary ideologies coming out of Latin America and the Middle East – dependency theory, underdevelopment, world systems theory etc. So it was a time of great uncertainty, especially in the West’s development machine.

The question they asked was what are all these people up to and they feared revolution. Remember this was still the post-war Keynesian consensus when ruling elites believed that they could absorb discontent by providing citizens with jobs, housing, health and transport as public services – that was the model. It was a top down approach that relied on state dominance of the economy. So if ‘we’ can’t deliver the jobs to all these people, what will they do to us? Throughout history, it has been known that peasants can be more easily controlled than urban mobs, because they are scattered. They can be beaten up by a few guys with horses and guns or even sticks. But what happens when the city mob decides to take its destiny in its own hands? Some even came up with a policy of forced repatriation of urban migrants back to the countryside.

The general opinion was that city-dwellers were suffering from mass unemployment. The image of the unemployment problem that they had in their head came from the 1930s, with broken men thrown out of factory work, standing huddled on street corners and saying buddy will you spare me a dime. The same fear of revolution that led to the New Deal then was present now, but it was global and concentrated in Third World cities. I absorbed all this and I knew it was wrong, but I didn’t know why. But I had spent two and a half years in Accra and eventually I realised why it was wrong: the people were not unemployed, they were working – often in an irregular way and not for very much, but working nevertheless. The problem was that development could only be launched from the top by the state. I held that people were doing all sorts of things that were not recognized or regulated by the state. So we have to find out what they are doing and introduce these facts into the argument about policy.

This was the source for my contribution and I came up with the idea of a distinction between formal and informal income opportunities. The most remarkable thing about informality is that it is not regular. When I first came into the slums, I used to ask people how much do you spend on meat a week? I had this idea that everybody has a budget, but they would say What? My pay is pathetic, I spend it in the first few days and then I bum off my friends and family or I go without food. I realised that my own expectation was that people control their economic lives in a very regular way and this wasn’t how these people were living. They wanted regularity, a staple income they could rely on, but they knew that such sources were not enough and they had to go out and find the rest in a more irregular way. I just wanted to point to a contrast between rationalised regular economy controlled to some extent and the rest. Everyone combined formal and informal elements in their economic activities.

The idea was stolen by some people from the conference at Sussex in 1971 where I delivered my paper. The conference organizers were leading international development economists and they went off to Kenya to work with the International Labour Office the next year and produced a book in which they announced that the problem of development was going to be solved by the informal sector. They introduced the notion of an informal sector. They were saying broadly what I had said, that people are doing more than you think, they are not just unemployed and things are not as bad as you imagine because people have extra money. They thought that if we can encourage the informal sector, maybe there won’t be a revolution in the Third World. At the same time they announced they were cancelling the book of the conference that my paper would have been published in.

This caused a scandal. A lot of people had been at the conference, they knew that it was my idea and these others made no reference to me in their book. So people started to write papers saying that Keith Hart invented the informal sector. Perhaps if I hadn’t been plagiarised, my authorship would have disappeared from history. But the fact that these people ripped me off established a cultural model in which anyone writing about this stuff had to include in the first paragraph the line that Keith Hart invented the informal economy.

To answer your question about what I think about it now, it did serve a purpose – it pointed to activities that were not being taken into account; it played a part in the long shift from state-dominated approaches to market-driven policies, looking more at what people were doing in informal commerce and less at state-organized economy. But the last 30 years of neoliberal deregulation have meant that the informal economy has become something else – it has taken over the world economy. The neoliberal agenda is to take the state out of the economy. So if I was dealing with a few people operating in the cracks of a heavily regulated economy, deregulation has meant that the banks and the big corporations are now acting in openly criminal ways, finance has moved offshore, the trade in armaments, drugs and pirated cultural commodities is huge and people who used to have secure jobs with pensions and holidays have been casualised, turned into contract workers with no rights.

So the informal economy, in the sense of activities that avoid state regulation, has expanded tremendously. It includes phenomena that are really quite different. People now say that African national economies are 70-90% informal. If almost the whole economy informal, I don’t think “informal” is a good word for it. In recent years I have come to feel that we need to put more effort into looking at the positive social forces that are organizing activities in what we call the informal economy. These principles are kinship, religion, ethnicity, criminal organization, locality and they are quite easy to see. If the state is absent, some other power has to move in to fill the gap. There are only limited forms of that power – families, gangs, churches, neighbourhoods and so on. The informal economy had a point once, but faced with what the world economy has become, it is too vague and inclusive to be helpful any more.

Q: Among your many professional activities as an anthropologist, professor, journalist and development expert, you also claim to be a professional gambler. What is the world of gambling for you and why should an anthropologist study it?

KH: I don’t think any anthropologist has an obligation to study anything. If some anthropologists want to study gambling, good for them – I’m not going to tell to do so. I study gambling because I am a gambler. I am an economic anthropologist because I want to protect my family in a world that could ruin us all. At the moment I am an FX trader because the value of money is being destroyed everywhere — except in Brazil (ironic in the context of later currency developments). Gold hasn’t increased in value since the Second World War; it has maintained exactly the same real value over 70 years or so, but the actual currencies have been devalued drastically. So I manipulate the small income and assets that I have in order to try to prevent the erosion of my family’s economic base. I have never wanted to make money, but I don’t want to lose it.

When I was 12 years old, I took stock of my situation. My dad used to come home from work every day and complain to his wife, our mother that he knew his job better than his bosses, but his bosses told him what to do, against his better judgment. So things didn’t work properly and he was overlooked for promotion in favour of others who kissed up to the bosses. We got it every day and I thought I don’t want anything like that, I don’t want to be a proletarian working for a big bureaucracy, I want to have some control over my life. I was already embarked on one path – passing examinations in order to enter the free professions, of which the only one I knew personally was school, so I wanted to continue school indefinitely. I imagined – although this is no longer the case — that as an academic I would have some control over my working life, but they have managed to take that away in the last forty years.

The point of passing exams was to get to Cambridge which was a remote and very frightening prospect. But what would happen if I don’t pass the exams? What was I going to do? I might have to end up in a job like my dad’s and I didn’t want that. So I had to find a way of making money without working for it. The only thing I could think of was betting on the horses. So I got hold of my grandmother’s Daily Express which had some famous tipsters in it and I kept a little book where I recorded paper bets for three years, because I didn’t have any money. I learned a lot about horse-racing and betting and by the end I was making a regular profit on paper. By 15 I had some money from delivering newspapers and embezzling my school expenses, dodging bus fares and not buying a proper lunch. So now I could bet with cash and when I was 17 I started working in factories during the school holidays.

But what turned it round was when I went to Cambridge University and I got my grant in advance, so suddenly I had capital. Now I could bet in a different way with a fund and I began to experiment with statistical methods of gambling. By now I had six years of continuous knowledge about the horses in my head. By the time I had perfected my statistical method, I could predict making 8-8.5% on turnover. I never took any money from my parents, I never had a wage job as an undergraduate, I took holidays for two months in the Aegean. I would guess that betting roughly doubled my income.

Q: One of your concerns has to do with how money should be approached in a less alienated society. What is your take on money and society? I know it is a broad question…

KH: We could start from the fact that academics don’t like money because they don’t have enough of it. And they resent the fact that people who do have money exercise more influence over the world than they do. So, following in the tradition of priestly castes in many civilizations, modern intellectuals tend to subscribe to the view that money is the root of all evil. I know that in our world money is used to exploit people, that people who don’t deserve it get rich and that all sorts of bad things get done using money. But I also believe that money has some redemptive qualities that we ought to be paying more attention to. There are things we can do with money that are not just for personal enrichment and could be put to the work of economic improvement more generally.

I was very much influenced by my grandmother, the person I have loved most in my life. My father’s mother lived across the street from us; she was a kind of emancipated serf, her family had worked for generations on the estates of landlords South of Manchester. For her money was a way of escaping from feudalism into the slums of Manchester. She was extremely suspicious of the gift. She knew that they had worked for almost nothing on these estates and then the landlord would come around at Christmas and give them a chicken and that was supposed to make it alright. She refused to have spectacles on the National Health Service because it was a gift; and she would not use the free library. She used to say, If you can’t pay, don’t go. She was a working class conservative who hated socialism because she believed it reintroduced feudalism by creating new classes of donors and recipients which replicated in some way the old landlord-peasant relationship. Money is an equaliser. Another of her expressions was my money is as good as anyone else’s.

My family never talks about the depression years: my grandfather was gassed in the First World War, he had a good trade as an upholsterer, but he never worked between the wars and they had four kids. Who knows how they got through, but she must have been taking in washing or something. Her unmarried sister no doubt gave her some of her wages. My dad had to get work in a factory at the age of 14. It must have been very hard. So my grandmother was not worshipping money as they would in the United Church of the Kingdom of God. She was saying that being in the money economy of working class Manchester with some opportunity to generate your own income and spend it was a hell of a lot better than any economy she had known before.

All of this is to say that in a deep way I absorbed from my upbringing the idea that markets and money are liberating when compared with the Old Regime, unequal society. It’s something that’s a deep part of Manchester’s history and of people’s experience of emancipation from traditional inequality through industry and commerce. Although I was a child of the post-war British welfare state and I was always a socialist or social democrat and ultimately a Marxist, I believe like Marx that any more just society of the future has to be built on what money has made possible in this world. Marx argued vigorously, against the Social Ricardians, Robert Owen, Proudhon and a lot of other lefties at the time that a complex society depends on money; and we should not try to build a society against it or without it.

I have spent a long time studying money, especially in the last 25 years, and I have been posing the question what it is that it does for us, as opposed to the more conventional question of what it does to us that we don’t like, because we don’t have enough of it or some other people have too much of it. I believe that money is a medium that allows us to span a very wide range from things that we know very well in our everyday lives to larger, invisible and remote processes to which we are subject, but know very little about and would like to influence them. If you have some money, you can do almost anything with it. In our experience of money, it is to some extent universal and infinite in its range of use. At the same time, if you use money to buy something, it becomes something that closes off possibility and makes it finite. If I have some money that can be used for anything and I decide to buy a pair of trousers with some of it, the payment of the money is what makes that transaction final – and of course the money goes. Yet as long as there is some money, the possibility remains that I could do anything with it.

So the first thing about money is that it schools us in moving between this range of infinite and finite possibility. I also believe that money is one of the principal ways that we communicate and remember. It is a means of communication and memory like language. The two most important things we can count are money and time. We must use the infrastructures of calculation and organization that both of these carry in themselves. We take it for granted that time has been made more universal in its application and organization in our world than money; but money has that same capacity also; and money and time are, in a deep and complicated way, connected. I cannot imagine a civilization that would not depend on money and time taken to a high level of sophistication in order to meet people’s needs. It’s just that the system of money that we have and the way we organize our time through work and leisure is deeply unsatisfying for many people. My only point as an anthropologist is that I would like to play a part in making these things work for us instead of against us. So I say that there are socially redemptive features of money that as anthropologists we could help to make more explicit.

Q: You have mentioned the human economy. Could you tell us some more about that, about the possibilities for changing the world through cooperative networks, for example?

KH: Yes, economia solidaria and things like that. I think that science is a reactionary project because it takes the world as it is and builds its generalisations and practice on the notion that the way the world is doesn’t change in significant ways. I also believe that democracy and science are the twin pillars of modern civilization. We need societies in which people have more control over the things that matter to them and we need to know more about the world in order to make them work. So science and democracy are the inspirations for my work, but I also know that certain versions of science are very conservative in that they aim only to reflect the world as it is and not to change it fundamentally.

I have said that I entered anthropology at a time when African societies had just won their independence from colonial empire; so that when I went to Ghana in the 1960s, no-one imagined that the job of a social scientist was to observe how things were and leave it at that. Everybody was part of a project that conceived of the possibility of making a better world in which the people who had suffered the most from a very unequal imperialist system would find their own relationship to a more just world society. I find it really hard to get this message across now. I don’t know about Brazil, but what I call the pomo generation resists this message. I get young anthropologists arguing seriously that our job as ethnographers is to show what people are doing, to report the natives’ point of view and that’s it. When I ask them isn’t there something that makes you angry about this world? Isn’t there anything you would like to change? they look at me with some distaste, as if this stuff is so…old, as if they wanted to say do you think you are still living in the 60s?

To me it is unbearable to imagine that the world will remain the way it is. I can’t live without hope of playing some part in helping it become a better place. My methodological inspiration is Jean-Jacques Rousseau and indeed the philosophers of the liberal enlightenment who again in our world get a bad press. They are supposed to be racist, reactionary, western male intellectuals. In my view, they approached their world, the Old Regime, as something unsustainable and unjustifiable and they had to find the intellectual and practical means of a democratic revolution. Their job was to inform it and help make it happen. Everything that Rousseau touched assumed that there was no point in just discovering how existing society works because you want to change it. It might be of some interest to know how it got to be that way and how we might then make it something else. So all his work is concerned with the actual world in which we live and the possible world that we might make. This idea of making new possibilities out of the actual circumstances in which we live is becoming more and more remote from contemporary intellectual life. Just to remind you, in the 1760s, with The Social Contract, Emile, New Heloise and his Confessions, Rousseau revolutionised the way we think about politics, education, sexuality and the self. For each of his books he developed a different genre of writing, somewhere between factual reporting and imaginative fiction – a novel, a political tract about how to build a democratic society, an allegory, autobiography as it had never been practised before.

In my own work, I want to explore the relationship between the possible and the actual and I am willing to try different genres of writing as ways of approaching these questions. Although I believe that anthropology’s contribution in the last century has without any doubt been founded on fieldwork-based ethnography, I also believe that excessive reliance on this method is deeply reactionary and presents us from addressing these questions about how the world is changing and how anthropology might inform improvements in it.

That’s the general issue. The other question you raised was about the human economy and its relationship to progressive economic initiatives like cooperatives. Humanity is facing enormous danger because we developed quite effective ways of increasing our presence on the planet. In the last 200 years our population has increased from 1 bn to 7 bn people; the proportion living in cities has gone from 1 in 40 to a half in that time and the amount of energy we produce and consume has been growing at the rate of 3% a year. In order to cope with this extraordinary leap from the countryside to the city and towards an increasingly integrated world society, we had to develop social forms to manage this transition – cities, nation-states, corporations, empires, whatever. The nation-state form has been incredibly powerful and durable, even if it is historically recent. Our times are marked by a situation in which the world economy, money and markets, have escaped from national controls, but thinking and politics haven’t. I am not saying that national society will disappear, but it is the case that nation-states can’t deal adequately with some of the problems that humanity as a whole faces and we haven’t yet developed social means of dealing with these global questions.

Anthropology, of all the social disciplines, has built into its history the widest aspiration to understand the human predicament as a whole. But the ethnographic revolution and the cultural relativism of the 20th century have undermined our capacity to engage at that level. I look to 18th and 19th century precedents for anthropological writing – more 18th than 19th – for ways of building on the ethnographic revolution, which I endorse. We have to go and live with people wherever they are and find out what they are thinking and doing and make sure that this enters into what is said for them or done to them. But we also have to tackle the problems that humanity is facing, so for me the human economy idea is similar to the informal economy: we focus not on intellectual abstractions, models, charts and equations, but on what people are really doing – that is the starting point. But we also have to expand our intellectual and political reach beyond the local, national or regional levels with which we as anthropologists are more comfortable.

There are social movements out there, coming out of organizations like the World Social Forum that began here in Porto Alegre in 2001, which at first were anti-global, but more recently the term alter-globalization has taken hold, based on the idea that we have to face the world and its problems, but not in the way that the established powers do. I am now a fellow-traveller of this movement. There is a big intellectual and political divide within it between those who believe that we should be organizing a radical alternative to the dominant capitalist form and those who want to build piecemeal on initiatives that people have already started, which need not be capitalist in organization or principle. I tend to follow the second line.

So the human economy is a focus on what people are doing in their own interests that might help us to conceive of and realise a more just and plural economy; but also at some level it has to involve humanity as a whole. That is the most difficult thing, because we lack good intellectual prescriptions for how to think about the world as a whole or what to do about it. The greens, the environmentalists almost have the field to themselves, but they scare people with stories about climate change, seas rising and running out of food, water and energy. If the human predicament is talked about at all today, it is in green terms. I don’t mind that, but I believe that the real problems are social and political. An anthropological programme of work that addresses how we can make society more inclusive while retaining our local and national roots – that’s the kind of anthropology I want to make a contribution to. The idea of a human economy fits into that.

I also believe that we need to know a lot more about what people have been doing to help themselves at the local and regional level, community currencies, solidarity economy, cooperatives and notions like the popular economy which was developed in Latin America. It attempts to cut across some of the received categories by creating alliances of small farmers, urban informal workers, unions and progressive governments. The book I have just co-edited, The Human Economy: A Citizen’s Guide (2010), is an attempt to bring together thinking about and practical evidence of a wide range of initiatives that people have introduced. Many anthropologists prefer local and low-level approaches to speculation about world-historical processes. It is still possible to do progressive work in this way, by simply showing what people are capable of and how they do it. But it is even better if it is allied to and shaped by a more inclusive vision.

Q: What are currently working on?

KH: I am producing a lot of essays on money – finance in the global economic crisis, the euro, our times as a moment in the history of money, the end of national monopoly currencies and the absence of viable replacements as yet. I am working on a book called Africa: the coming revolution which in a way summarises the 40 years I have had to think about my own original fieldwork in Ghana. It’s about what happened to Africa in the 20th century, given the extraordinary explosion of population and cities compared with what Africa was before. It looks forward to the coming decades and lays out a vision of African economic development. I actually believe that Africa will be a major player in the world economy during this century. Almost 40% of the world’s population are forecast to be living in Africa by 2100, roughly the same as Asia which currently outnumbers Africa by 4 to 1. People have not yet come to terms with what that means, including most Africans.

When I was growing up, my mother used to say eat your greens because the starving Chinese peasants have nothing to eat. Between the wars, the most poverty-stricken, violent and disorganized place in the world was China and 80 years later it is being touted as the likely successor to the United States as global leader. Things change faster than we think. Africa has every chance of becoming a major power just by virtue of the size of its population and fast-growing economy. And also its minerals – but what I am interested in is what all these people who live in Africa’s cities will do for the world economy, now that they are there. Taking things out of the ground and selling them as raw materials to the rest of the world is not enough.

The fastest growing and most significant market in the world economy today is for cultural commodities – entertainment, sports, education, media, information services. The US’s three principal exports are movies, music and software, which is why they are so keen on intellectual property. We are moving from an industrial economy, which was concerned with extracting, processing and circulating things, to an economy that will revert to what it was originally in which the bulk of it consists of what people do for each other, services. Telling stories and singing songs and people performing to the best of their ability as a spectacle are the future of the economy, as well as our insatiable desire to improve our knowledge of the world in order to cope with it better. So if you ask what these new African urban populations are going to sell to the world, it is obviously their culture.

It is already the case. Nollywood, Nigeria’s film industry, is the second largest in the world after Hollywood, more than Bollywood. It is like Hollywood was in the first decades of the 20th century, when W G Griffith made five movies a week. These guys are making films for $5,000 and sell them on CDs for $1 or $2. It’s in the middle of an impenetrable Lagos slum, so that nobody can get in to regulate it. Do you know why Hollywood is where it is? Because the American film industry was in New Jersey and Thomas Edison’s patents were restricting their development, so they went as far as they could away from there, to LA, and started building a new movie industry with no rules. So when Walt Disney produced his first Mickey Mouse cartoon, he ripped off a Buster Keaton movie without acknowledgment. 100 years later the Disney Corporation is suing a Chinese cartoonist for unlicensed use of their logo. In other words, Hollywood has now become the Edison of the world movie industry and what Hollywood originally was in now in Lagos.

I am not saying that entering a world market for cultural commodities dominated by big corporations and the governments that sing their tune is all that easy; but there has been a huge African diaspora since the Second World War who have wide education and business experience. We know that the world likes African music; African plastic arts have played a creative role in the development of western art in the modernist period. There has been an artistic explosion in Africa – in dance, theatre, literature, film, all the arts. Kinshasa is an incredible place: when you think of the Congo, it is of women being raped and children getting killed in the countryside, but partly because of the war, Kinshasa has become a huge metropolis whose music and film industries are extraordinary and have been for half a century. Johannesburg is the main centre for graphic design in Africa. Cairo is an immense hub for publishing, film-making and education. You simply don’t read about the cultural dynamism of these huge cities. All you read about is misery — famine, war, AIDs and poverty.

I don’t want to write a feel good book – how could I? But I do want to say that there is stuff going on there that has enormous potential. The Asian manufacturers already know that; it’s the West who still want to believe that Africa is a backward and primitive place going nowhere. Their media and intellectuals make no effort to break with this paradigm. But the people who have things to sell know that the fastest growing market in the world is Africa and they had better be in there. The West only talks about China in Africa as if all they want to do is grab ‘our’ minerals, but the main economic dynamic is that they are using cheap African labour to assemble manufactures like cars in Africa, which is the first stage towards the development of local industry. It’s the African market that matters and increasingly Africans will supply their own markets. It is important to ask what the Africans have that the rest of the world might want: agriculture and manufactures are already stitched up, so what are they going to make? It is a very antiquated notion that the economy consists primarily in producing and selling things. The future of the economy is what people want to do with each other at distance. Africans bring to such an economy some really remarkable assets. I want to write about that.

Q: I would like to know about the MAUSS movement in France and the discussion between Florence Weber and Jacques Godbout concerning the gift paradigm. What is your opinion?

KH: I have lived in Paris now for 14 years and there has been a wonderful renaissance in economic sociology there. There is a new collection edited by Philippe Steiner and Francois Vatin called Traité de sociologie économique and it is wonderful. I have no institutional position in France; I have never been asked to hold down a job there. It took me a long time, but I have formed some important alliances with people in this French economic sociology network. The main one of these is Jean-Louis Laville who works at CNAM and is Director of the Polanyi Institute; he has written a lot of books about économie solidaire, associationisme and the third sector. He was my collaborator in this edited book, The Human Economy. I also got to know Alain Caillé and from an early stage we agreed to organize a conference on Mauss together which took place in Cerisy in 2009. It was a large international conference with about 45 people – Ruben was there. It was called Mauss vivant, an attempt to show the continuing relevance of Mauss. I have already indicated that I am quite eclectic in my intellectual inspirations – Marx, Rousseau and so on – but I have become more focused by living in France on Durkheim and Mauss. Out of the classical works of the founders of modern social theory, Durkheim’s last book, The Elementary Forms of the Religious Life, is the one I find to have the most revolutionary potential now. That book has not yet been absorbed in the way that it should and I believe that I can take it somewhere through my study of money. For me the most creative thing is to look at money as a form of religious life.

Q: So you see the gift much more as a part of Durkheim’s project?

KH: Yes, I believe that Mauss’s essay on the gift is an extension of Durkheim’s first book, The Division of Labour in Society. It was written against the English utilitarian tradition and for me the most important concept in that book is the idea that contractual relations between individuals are supported by what he calls “the non-contractual element in the contract”. This is largely invisible to view and it consists of shared history, institutions, laws and customs. As you know, Durkheim’s aim was to make this invisible support for the market economy visible. I believe that was more or less what Mauss was trying to do too. I don’t think that Mauss conceived of the gift as a principle; he saw it as one form of exchange like market contracts, but for him archaic gift-exchange was a way of making visible aspects of capitalist market economies that would otherwise be invisible. It is not just prestations in the form of Christmas presents and weddings, but key contracts like wages and rent and especially credit and debt relations contain elements that cannot be understood if your only idea of exchange is a spot contract, an immediate exchange for cash. For Mauss the gift is the non-contractual element in the contract and the study of the archaic gift is a way of revealing the potential of markets to be humane and generous, to be based on solidarity. His own political project was to take syndicalism, mutual insurance and cooperatives as a practical means to that end.

This was reflected in his idea of a total social fact – of the interdependence of aesthetic, legal, economic and political dimensions of social life. He wanted an economic movement from below that already existed to be given more prominence and focusing on the sort of relations and principles revealed by the archaic gift was a way of illuminating the possibilities already existing within French capitalist society. I believe he wrote the essay to debunk the idea that there is a gift principle opposed to the market principle. That is bourgeois ideology, that there are on the one hand the constraints imposed by contracts and on the other hand the free gift. Everything in the book is about why this contrast doesn’t work. There is no such thing as a free gift or an altruistic economic form. The gift itself is often coercive, certainly unequal, but it also contains more generous elements.

Given all of this, to return to Florence Weber and her long introduction to the new French edition of Mauss’s essay, I think it can be said that the MAUSS group in insisting on the gift as a political principle have taken it in a direction that is not in the spirit that Mauss himself wrote the book. They do, I think, reify this principle as something separate from the market, whereas Mauss himself wanted to bring out the non-market elements in market relations, along with the interested elements in the gift, to show that together they reveal a generous and inclusive vision of human possibility. To some extent, the MAUSS group could be said to have missed that in favour of articulating a third way between market and state. Some say they are a small sect who keep up a sense of their own importance by ignoring the rest of the world. I thought the point of our conference was dialogue, but it didn’t seem to me that the MAUSS group were up for dialogue at all. I am grateful to Alain, a very significant figure who has contributed a great deal, as indeed has Jacques Godbout, but I think that the politics of the group are too narrow and inwardly focused. They claim Mauss as legitimation for a global minimum wage, but I asked who are you and how are you going to persuade the Americans to accept it? Equally, in her introduction, Florence Weber overstates the point. She was stimulated by the closed politics of the MAUSS group to make a radically oppositional statement, probably at too great length; but if I had to choose between the sides, I would probably go with her.

Q: It’s a bit odd because the book of Caillé and Godbout was translated…

KH: It’s a very good book!

Q: …and many sociologists use it as an anti-utilitarian source for solidarity economy.

KH: Yes, but I don’t think that the gift paradigm is Mauss. He didn’t have a gift paradigm. Solidarity economy can mean a number of things, but for many people it is an alternative way of practising the economy. I have worked for a long time with alternative money, community currencies; and people who enter this field often bring very contrasting ideas and aims to it. Some people want to move as far away as possible from the national capitalist economy; they want to create a closed circuit based on radically opposed principles. But others want their social money to be integrated into normal commercial circuits. The two sides are quite strongly at each other’s throats. I am not suggesting that one is right and the other is wrong, but we do face a choice over how far we organize our economic politics on oppositional principles as against trying to insert ourselves into existing commerce in new ways.

In Anglophone anthropology for the last 30 years, certainly since Chris Gregory wrote Gifts and Commodities (1982), it has become commonplace for people to say that there is a gift economy opposed to the market economy and the market is us, the West, while the gift economy is them, the Melanesians or the Amazonians. Or again you have German internet activists who say they are going to build an online world around the gift. I have heard people in Berlin say that they will not allow any suspicion of exchange to enter into relations that have to be based exclusively on the gift. I know a Korean graduate student in Seoul who lives in a commune founded on the principle that all labour is a gift, where there must be no payment or even a suspicion that you are doing this because you want something from me. Reciprocity is a bad word under these circumstances. These are very extremist views.

Chris Gregory was an economist who worked in Papua New Guinea and he was amazed by the fluency with which local people combined elements of the modern economy with traditional gift-exchange. They would be doing kula while sticking bank notes up their noses and for him what was truly impressive was the ease with which they combined the two economic systems in the present. But then he wrote a book which identified the gift principle with Mauss and the market principle with Marx and people took the conceptual opposition that he presented and ran with that, at the expense of the long ethnographic section of the book which showed that all this stuff was being mixed up. In his next book, Savage Money, he had to include a chapter saying that the conceptual pair in the first book was not intended to be an ethnographic contrast between ways of life and even whole societies.

There are many intermediate positions, but in the end I think that opposing gift and market as principles is misleading. It doesn’t surprise me that many sociologists find it appealing since indoctrination by bourgeois ideology is hard to shift. Let me put it this way, my own intellectual and political development has been based on rejecting it, so I read Mauss as not saying that at all. I am certainly capable of learning from and admiring Caillé and Godbout’s work on the same subject, since it really is a great contribution. Alain and I worked together quite happily for several years and we never fell out. So these distinctions can’t be that important.

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Waiting for emancipation: the prospects for liberal revolution in Africa Sun, 15 Jun 2014 19:49:28 +0000 MP3 of the Audrey Richards lecture in African Studies at Cambridge University, 22nd May 2014

This was an improvised talk lasting 49 minutes. It contains several verbal mistakes:

Kreisler for Kreutzer (violin sonata)

George for Peter Peckard (echoes of George Peppard?)

The city of Nantes was part of Brittany in the 1790s and La Vendee is a district South of the Loire; but Nantes stood out for the Republic after the revolution when the whole district around it lanched a counter-revolutionary revolt known as the “War in the Vendee”.

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Globalization from below: The world’s other economy (New Preface) Sun, 01 Jun 2014 08:03:11 +0000 1. The great transformation
2. Globalization from above
3. Globalization from below (and above)
4. The informal economy has taken over the world
5. The digital revolution and intellectual property
6. Anthropology and economics

The great transformation

We are forming a world society and call it “globalization”. There is nothing inevitable about this. Globalization on a similar scale occurred before 1914 and was then reversed by an age of war and revolution. Emergent world society is the new human universal – not an idea, like the catholic or bourgeois versions that preceded it, but the fact of 7 billion people living together on this planet. We urgently need to find new principles of association that will make our world habitable. In approaching such a task, I imagine modern world history as a sequence of three centuries, 1800-2100, each profoundly different from the others. Indeed, if the 21st century repeats the pattern of the 19th or the 20th, there will not be a 22nd.

In 1800 the world’s population was roughly one billion. At that time only 3% lived in cities. The rest lived mainly by extracting a livelihood from the land. Animals and plants were responsible for almost all the energy produced and consumed by human beings. A bit more than two centuries later, world population has reached seven billions. The proportion living in cities is about a half. Inanimate sources converted by machines now account for the bulk of energy production and consumption. For most of the intervening period the human population has been growing at an average annual rate of 1.5%; cities at 2% a year; and energy production at around 3% a year. This last figure is double the rate of population increase, a powerful index of the economic expansion of the last 200 years. In consequence, many people live longer, work less and spend more than they did before. But a third of humanity still works in the fields with their hands; and the distribution of all this extra energy has been grossly unequal. Americans each consume 400 times more energy than the average Ugandan.

This hectic dash from the village to the city is widely assumed to be driven by an engine of economic growth and inequality known as “capitalism”. But several social forms have emerged to organize the process on a large scale: empires, nation-states, cities, corporations, regional federations, international organizations, capitalist markets, machine industry, global finance and telecommunications networks. There is a pressing need for more effective social coordination at the global level and the drive towards local self-organization is strong everywhere. Special-interest associations of every kind proliferate. Those who resist this unequal society often denigrate the dominant bureaucratic institutions — “the state” and “capitalism” being favourites – in favour of promoting small-scale self-organized groups and networks. Yet it is inconceivable that any future society of this century could dispense with the principal social forms that have brought us to this point. So we must work out how states, cities, big money and the rest might be selectively combined with citizens’ initiatives to promote a more democratic world society. A first step would be to emancipate ourselves from viewing the economy exclusively in national terms.

The period 1800-2100 may be thought of as a political drama in three acts driven by huge demographic shifts. In 1900 Europe (including Russia) had a population of 400 million, three times Africa’s and a quarter of the world total or 36% including lands of new European settlement. Europeans then controlled four-fifths of the inhabited land area. By 2100 Asia is projected to have 43% of the world’s population (down from 60% today), Africa 39% and the New World, Europe and Oceania altogether only 18%. Europe’s share will have shrunk from 25% to 6% in 200 years. This is because, while most regional populations are ageing, Europe’s is ageing fastest and only Africans are posting rates of increase comparable to Europeans in the 19th century. The Asian manufacturers, especially China, have recognized Africa’s centrality to the growth of world demand in the coming century, but the Europeans and Americans still cling to a model of world society in which their own dominance is taken for granted.

Europeans made modern world society in the nineteenth century by forcing the rest of humanity to join their empires. This was principally thanks to a machine revolution that gave them overwhelming superiority in transport, communications and armaments, as well as manufactures more generally. At the same time, a population explosion fuelled their migration to all corners of the planet. The most powerful political entity to emerge from all this was the Anglo-Indian super-state. The other European powers were forced to react to its dominance – the French in Egypt, the Russians in Afghanistan, the Germans in Persia – and in this way the seeds were sewn for the First World War.

So what happened in the 20th century? Three decades of war and depression suggested that the world’s future lay with competing states of various kinds – communist, fascist, liberal, developmental. This culminated in the nuclear nightmare of the Cold War. But the century’s main event was the anti-colonial revolution, the process whereby peoples coerced into world society by Europeans in the previous century now sought to establish their own independent relationship to it. Nowhere was the scale and speed of this revolution more dramatic than in China, the world’s most poverty-stricken and violent region in the 1930s and now a contender for global leadership. The impact of India’s development on world society since the end of the Cold War is almost as dramatic. But the freeing up of global flows of money and information in the last three decades has brought back extreme inequality and instability to the world economy along the lines of the age of financial imperialism before World War I.

National economic management has been unravelling since the US dollar left the gold standard in 1971. The money circuit has been progressively detached from politics and production and has grown exponentially in size; but the economic consequences of the lack of fit between national controls and global finance were long disguised by the credit boom that ended in 2007-8. Since then, the North Atlantic societies have been in the doldrums, while “emerging” countries like India, Brazil and China have sustained growth rates comparable to Russia’s earlier (annual average 10% in 1890-1913). The divergent unipolar world made by the European empires is being replaced by a convergent multipolar version which resembles the world in the 12th century.

The growing inability of national governments to cope with such a world has led to the rise of regional trading federations such as ASEAN, NAFTA and Mercosul. The European Union was originally one of these, following the path taken by Germany from customs union to federal state a century before. The rise of both neoliberalism and the internet encouraged dreams of money and markets uncontaminated by politics. Individual nation-states lack the means of protecting their citizens from the harsh winds of world markets. But Europe chose a fixed exchange-rate union that echoed Bretton Woods and before that the gold standard. This was ill-suited to the regime of multiple currencies, virtual markets, transnational corporate networks and shifting alliances between states that characterizes the world today.

Globalization from above

The dominant economic form of the 20th century was a synthesis of industrial capitalism and the nation-state that I call “national capitalism”. This was based on an alliance between capitalists and the military landlord class to contain the social energies of rapidly expanding cities in the late 19th century. It was an attempt to manage money, markets and accumulation through central bureaucracies in the interest of citizens. National capitalism originated in a series of political revolutions of the 1860s and early 70s, including the American civil war, the abolition of serfdom in Russia, Italian and German unification, British democratic reforms, Japan’s Meiji Restoration and the French Third Republic. Karl Marx published Capital at this time. These governments established new legal conditions for business corporations; a bureaucratic revolution was launched. Several decades of financial imperialism featuring the global migration of 100 million Europeans and Asians were followed by the second Thirty Years War of 1914-1945; and then by developmental states which imposed strict rules on economic actors in the post-war decades.

The current world crisis is not merely financial, a moment in the historical cycle of credit and debt, but rather a new stage in the history of money. Deregulation has led to politics being still mainly national, while the money circuit is global and lawless. We are witnessing the collapse of the economic forms that the world lived by in the 20th century. National capitalism has been unravelling since the US dollar went off gold, money futures were invented and the Bretton Woods fixed exchange-rate system was abandoned in the early 1970s. The chief symbol of this decline is the ongoing crisis of the euro that was meant to protect individual countries. As the need for international cooperation grows, the disconnection between economy and political institutions makes effective solutions unattainable.

Of the 100 largest economic entities on the planet, two-thirds are business corporations, half of them bigger than the eight largest countries. The corporations, having bought national governments, are now preparing to make a world society where they would be the only effective citizens. This process is actively promoted by the United States and European Union, where the majority of transnational corproations originated. Oliver Williamson recently received a Bank of Sweden (“Nobel”) prize in economics for his development of Ronald Coase’s theory of the firm (1937). Coase asked why, if markets are efficient, any self-employed person would choose to work in a collective rather than outsource what they can’t best do themselves. His answer was “transaction costs”. Williamson takes this division between what is internal and external to the firm – and by extension the social division of labour as a whole — to be entirely flexible, including relations between corporations and governments. The Fordist phase of internalizing transaction costs is over, not least because the digital revolution has cheapened the cost of transferring information reliably.

Coase/Williamson imagine a world where companies control the marketing of their brand, outsource production, logistics and much else and internalize government. Why rely on states for conflict resolution? Corporations also have to handle conflicts internally. Why have state laws, when what the world needs most is moral law? The discourse of Corporate Social Responsibility constitutes a forum for negotiating changes in the relationship between firms and society. Privatization of public services is the other side of that coin. What kinds of political mobilization are capable of resisting it all?

A global plutocracy has been formed in recent decades. Modern business corporations were granted the rights of individual citizens in the late 19th century and now combine those rights with limited liability for debts which the rest of us are denied. Even the ancient Romans limited the spending of the rich in political campaigns. The US Supreme Court has refused to restrict corporate political spending since it would infringe their “human rights” and is now considering if their religious rights are infringed by Obamacare. These corporations once built their wealth by producing industrial commodities for profit at prices cheaper than their competitors. Now they rely on extracting rents (transfers sanctioned by political power). Yet these rent-seekers, far from being punished for stealing from the public, are bailed out by our taxes and held up as shining examples of super-rich consumption to be adulated by a public that has exchanged equal citizenship for circuses without the bread (television). There are no longer any political solutions to our economic problems. Some new form of political economy may eventually emerge, perhaps ushered in by a world war or massive civic unrest, but its shape is hard to discern now.

Globalization from below (and above)

The present volume provides a vivid antidote to such a vision of world society as being made from the top down. I will not repeat here the excellent summaries of its contents given by the editors. Above all the book provides testimony to the power of ethnographic realism. The Marxist critic, Raymond Williams, once identified “realism” by three features: it reveals a class previously invisible to readers; it is contemporary; and it undermines the sacred narratives sustaining unequal society. Globalization from below succeeds brilliantly in all three. Its ethos, like that of the “informal economy” before, is empirical humanism — to make the invisible visible. But how do its descriptions relate to the political impasse of our world?

Effective resistance to a corporate takeover will require selective alliances between self-organized initiatives on the ground and large-scale bureaucracies of the public and private kind. As Albert Camus told us in The Plague, the human predicament is impersonal; there are powerful anti-humanist forces in our world. So we have to build bridges between local actors and the new human universal, world society. To be human is to be someone who depends on and must make sense of impersonal social conditions. In the struggle with the corporations, we need to be sure that we are human and they are not. The drive for economic democracy will not be won until that confusion has been cleared up.

Many activists, however, will not consider working with bureaucracies that they think of as the enemy. Yet the French revolution was partly financed by the shippers of Bordeaux and Nantes, the Italian revolution by the industrialists of Milan and Turin. Kenya’s world-leading experiment in mobile money, M-pesa, was launched by a subsidiary of Vodacom. Hewlett-Packard has developed research stations in outlying areas in order to make computers accessible to the world’s “poorest four billion”. The notion of a “popular economy” has emerged in Latin America since the 1990s, bringing new coalitions (peasants, urban informal workers, unions) into an alliance with progressive political regimes. Brazil under Lula introduced a community banking system combining microfinance and complementary currencies with strong local democratic input. The government of Uruguay has sponsored a “3C” alternative circuit of exchange and credit for SMEs in which national utilities and local tax offices anchor the circulation of unpaid invoices as currency. A South African company is speeding up slow payments to the self-employed through a clearing system that allows banks to pay 70% of the value of invoices immediately. Presumably we want to live in a wired world; but I haven’t yet met a grassroots movement capable of launching a communications satellite. It doesn’t make sense to go it alone on a small scale, but one has to be selective in picking who to work with.

Given anthropologists’ preference to anchor economic strategies in people’s everyday lives, their aspirations and their local circumstances, the intellectual movement required should be one of extension from the local towards the global. We can’t arrive instantly at a view of the whole, but we can engage more concretely with the world that lies beyond the familiar institutions that immediately secure our rights and interests. According to Marcel Mauss and Karl Polanyi — and all the founders of modern social theory — the chief way of achieving social extension has always been through markets and money in a variety of forms. Money and markets are intrinsic to our human potential, not anti-human. Of course they should take forms that are more conducive to economic democracy. Anthropology might be a new kind of political education, one grounded in the circumstances people know well, but also capable of opening up wider perspectives. It helps to recognize that money and markets span the extremes of our most inclusive associations and our most intimate needs. As Georg Simmel said, money illustrates our human potential to make universal society. New principles of “economy”, conceived of as a specific strategy, must be discovered, articulated and disseminated. Such an economy, to be useful, should be based on general principles that guide what people do. It is not just an ideology or a call for realism. The social and technical conditions of our era — urbanization, fast transport and universal media – must underpin any inquiry into how these principles might be realised.

The informal economy has taken over the world

The idea of an informal economy was born in the 1970s when the post-war era of developmental states was drawing to a close. It seems, four decades later, that the economy has now escaped from all attempts to make it publicly accountable. What are the forms of state that can regulate a world of money that is essentially lawless? The informal economy started off as a way of talking about the Third World urban poor living in the cracks of a rule system that could not reach down to their level. Now the rule system itself is in question. Everyone ignores the rules, especially the people at the top – the politicians and bureaucrats, the corporations, the banks – and they routinely escape being held responsible for their illegal actions. Whereas the alliance between money and power used to be hidden, now it is celebrated as a virtue, wrapped up in neoliberal ideology. National economies and the world economy itself became radically informal as a result.

Not only has the management of money gone offshore, but corporations routinely outsource, downsize and casualize their labour forces, public functions are privatized, often corruptly, a global war over “intellectual property” has broken out and whole countries abandon any pretence of formality in their economic affairs. Here is no clandestine operation living between the cracks of the law. The market frenzy has led to the “commanding heights” of the informal economy taking over the state-made bureaucracy. Wall Street banks launder gangsters’ money through the Cayman Islands while mafias run opium out of Afghanistan with the support of several national governments. All of this has undermined whatever conceptual clarity the formal/informal pair – originally inspired by the state/market opposition of the Cold War — once had, to the point of their becoming often indistinguishable. The contributors to this book recognize this and wish to substitute for the old terminology “globalization from below”.

The shadow banking system — hedge funds, money market funds and structured investment vehicles that lie beyond state regulation – is literally out of control. Tax evasion is an international industry that dwarfs national budgets. The behaviour of transnational corporations is often blatantly criminal. Where to stop? The drug cartels from Mexico and Colombia to Russia, the illegal armaments industry, the global war over intellectual property (“piracy”), fake luxury goods, the invasion and looting of Iraq, 4 million dead in the Congo scramble for minerals. In 2006, a Japanese electronics firm, NEC, discovered a criminal counterpart of itself, operating on a similar scale under the same name and more profitably because it was wholly outside the law. The informal economy was always a way of labelling the unknowable, but the scale of all this goes beyond comprehension.

Inevitably, some dream of restoring the post-war era of social democracy, Stalinism and developmental states. The world turned then to governments to regulate markets. Their mission, for the first and only time in world history, was to reduce the gap between rich and poor, to increase the purchasing power of working people and to expand public services. The European empires were dismantled, beginning in Asia; a new world order was inaugurated under US hegemony, implementing the accords of Bretton Woods; the United Nations was formed and “development” – a post-colonial compact between rich and poor nations — was the order of the day. All of this took large amounts of state intervention.

The long post-war economic boom began to come unstuck around 1970. By the end of that decade, neoliberal conservatives were installed in power throughout the West. Their slogan was the free market and in the 1980s, with the active support of the IMF and World Bank, they set about dismantling state restrictions on the international flow of money in the name of “structural adjustment”, at first in the developing countries. The informal economy emerged in this context, not just to describe the Third World urban poor, but as a universal feature of modern economies.

“Informal” says what these activities are not – not regulated by state-made laws. We need to know more about what they are, to expose the positive principles organizing the informal economy. Its improbable rise to global dominance is the result of the mania for deregulation, linked to wholesale privatization of public goods and services and to the capture of politics by high finance. Deregulation has provided a fig leaf for corruption, rentier accumulation, tax evasion and public irresponsibility. Yet, while the credit boom lasted, criticism was drowned by celebrations of unending prosperity. Even after the bust, the political ascendancy of finance has hardly been challenged.

This is not to say that the state has faded away. It is very strong in the BRICS countries, for example, each of which in their own way is entering a phase of welfare state capitalism comparable to the West’s trajectory during the boom years after 1945. Pessimism concerning the political impotence of national institutions prevails in the North Atlantic societies whose world system is waning.

The digital revolution and intellectual property

What matter in our world are money, machines and people, in that order of priority. 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. How is human communication evolving in the context of the digital revolution?

The digital revolution in communications consists of rapid changes in the size, cost and speed of machines 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 international trade was in commodities 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.

Cheaper information transfers affect 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. The idea that transactions involving money are essentially amoral comes from its impersonal form; but until recently, in most societies, 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 in the late 19th century. The main imperative of management was now to control subordinates; and this bureaucratic ethos stretched from the production lines to a mass 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. Some firms have adopted 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 sales. 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. For many people, this has introduced new conditions of engagement with the impersonal economy. It will be some time 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.”

We still think of private property as belonging to living persons and oppose private and public spheres on that basis. But what makes property private is holding exclusive rights against the world. Abstract entities like governments and corporations, as well as individuals, can thus hold private property. We are understandably confused by this development, especially since the rise to public power of the corporations rested substantially on collapsing the difference between real and artificial persons in economic law. This constitutes a major obstacle not only to the practice of democracy, but also to thinking about it. Sadly, it has become commonplace even for anthropologists to obscure the distinction between living persons and abstractions, as well as between persons, things and ideas.

Private property has not only evolved from individual ownership to predominately corporate forms, but its main point of reference has also shifted from “real” to “intellectual” property, that is from material objects to ideas. This is partly because the digital revolution promotes the economic preponderance of information services whose reproduction and transmission is often costless or nearly so. A similar sleight of hand is at work here as in the claim to corporate personhood. 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 persuade courts and legislators that duplication of their “property” is “theft” or even “piracy.” It is ironic that the United States, born in an act of resistance against corporate monopoly, should now be foisting onto smaller countries an IP treaty that shores up the monopoly profits of transnational corporations.

Our world now resembles the Old Regime of agrarian civilization with unequal power concentrated in the hands of enforcers and rentiers. The label “information feudalism” is highly appropriate for our era. There is an obvious contradiction between coercive demands for tax and rent and the formation of a world market where people could enjoy the benefits of the digital revolution, if they were left free to exchange goods and services as equals. Human work was once conceived of as collective physical energy, as so many “hands”. The internet has raised the significance of intangible commodities. Labour is increasingly understood as individual creativity, as subjectivity. This shift has temporarily been captured by capital in insisting that “intellectual property” deserves closer regulation in the interest of its owners.

The fight is on to save the commons of human society, culture and ecology from the encroachments of corporate private property. This is no longer principally a question of conserving the earth’s natural resources, although it is definitely that too, nor of the deterioration of public services left to the mercies of privatized agencies. Increasingly we buy and sell ideas; and their reproduction is made infinitely easier by digital technologies. So the larger corporations have launched a campaign to assert their exclusive ownership of what until recently might have been considered shared culture to which all had free and equal access. Across the board, separate battles are being fought, without any real sense of the common cause that they embody. Readers of this volume will find many examples of this war in practice.

Anthropology and economics

Over a century ago, Alfred Marshall (Keynes’ teacher at Cambridge), in his synthesis of the marginalist revolution, Principles of Economics, defined economics as “both a study of wealth and a branch of the study of man”. Now Ronald Coase, who died recently aged 101, has published a manifesto with Ning Wang in the Harvard Business Review, “Saving economics from the economists”. They argue there that “The degree to which economics is isolated from the ordinary business of life is extraordinary and unfortunate…In the 20th century, economists could afford to write exclusively for one another. At the same time, the field experienced a paradigm shift, gradually identifying itself as a theoretical approach of economization and giving up the real-world economy as its subject matter…

“Economics thus becomes a convenient instrument the state uses to manage the economy, rather than a tool the public turns to for enlightenment about how the economy operates. But because it is no longer firmly grounded in systematic empirical investigation of the working of the economy, it is hardly up to the task….The reduction of economics to price theory is troubling enough. It is suicidal for the field to slide into a hard science of choice, ignoring the influences of society, history, culture, and politics on the working of the economy. It is time to reengage the severely impoverished field of economics with the economy. Market economies springing up in China, India, Africa, and elsewhere herald unprecedented opportunities for economists to study how the market economy gains its resilience in societies with cultural, institutional, and organizational diversity. But knowledge will come only if economics can be reoriented to the study of man as he is and the economic system as it actually exists.”

Globalization from below announces the aim of anthropologists to build a conversation about world society in the making — among ourselves and with other specialists, ultimately with the general public. This conversation is as much based on empirical investigation and comparison as it is on developing a theoretical and methodological framework for organizing research. Our first basic method is inspired by the ethnographic revolution that launched social and cultural anthropology in the twentieth century. This was the first sustained effort by a class of academics to break out of the ivory tower and to join the people where they live in order to discover what they do, think and want. Second, the economy is always plural and people’s experience of it across time and space has more in common than the use of contrastive terms like “capitalism” or “socialism” would suggest. This approach addresses the variety of particular institutions through which most people experience economic life. Third, our aim should be to promote economic democracy by helping people to organize and improve their own lives. Our findings must therefore ultimately be presented to the public in a spirit of pragmatism and made understandable for readers’ own practical use.

All of this is compatible with a humanist view. It must be so, if the economy is to be returned from remote experts to the people who are most affected by it. But humanism by itself is not enough. Our efforts must also be informed by an economic vision capable of bridging the gap between everyday life (what people know) and humanity’s common predicament, which is inevitably impersonal and lies beyond the actor’s point of view (what they don’t know). For this purpose a variety of methods have to be drawn from philosophy, world history, literature and grand social theory. It is not enough to seek alternative imaginaries of survival and development. We should be educating people about the world they live in. The “informal economy” idea was always part of that project. The present book is another. Ethnographic and historical realism, especially if focused on the classes hiding behind liberal myths, can be a powerful tool for anthropologists who make public education their mission.

Thomas Jefferson believed that the greatest threats to democracy were big government, organized religion and commercial monopolies. He managed to get safeguards against the first two included in the constitution, but was defeated on the third. He called them “pseudo-aristocrats”. Today they plunder our wealth at will, live in splendid isolation and know nothing of the rule of law. Welcome to the world the pseudo-aristocrats are making for themselves. The left need to wake up from their dogmatic slumbers. Anthropologists of globalization could tell them what is really going on out there.

New Preface to G. Matthews, C. Alba Vega and G. Lins Ribeiro editors Globalization from Below: The world’s other economy (Spanish edition, 2014)

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Europe is the main and permanent loser in this world crisis Tue, 06 May 2014 06:44:24 +0000 Europe is likely to be the main and permanent loser in the current world crisis. It is once again the focus of world attention; and its current plight has implications for all humanity. The European Union holds parliamentary elections later this month. These are generally considered to be much less important than national elections in each member country. The world – and Europe in particular – is in crisis, yet no-one expects the European parliament to do anything about it. Rather, a self-appointed ‘troika’ consisting of the European Central Bank, the European Commission and the International Monetary Fund issue orders to failing Southern European governments that everyone knows are underwritten by Germany’s strategy for saving the euro.

Is this just a parochial matter that can be safely ignored by the rest of the world? Western Europe has been an island of complacency in the seismic upheavals on its Eastern and Southern periphery in the last 25 years (collapse of the Soviet bloc, Balkan wars, Arab Spring, Iraq, Libya, now Ukraine). The Europeans themselves treat the immigrants from neighbouring territories on whom they depend for their pensions largely as a threat to their own cohesion and sovereignty. Yet the prolonged crisis of their single currency threatens to exacerbate internal conflicts. While there are other danger zones, some of which may be even more lethal, Europe and the countries on its eastern and southern borders should be taken seriously as a threat to world peace. For we live in a world that the Europeans made and lost. It would not be beyond them to unleash another world war or at least a collapse of global equity markets. If civil war returns to Europe, the world will feel the consequences.

Identifying Europe as a “continent” separate from its Asian and African neighbours was largely an invention of the early nineteenth century, when the industrial revolution fuelled imperialist ambitions to control the rest of the world. This meant developing an indigenous history for western civilization, linking its source to ancient Greece and Rome at the expense of Mesopotamia or Egypt, for example. The idea of world society as an evolving racial hierarchy, with “whites” at the top, yellows, browns and reds in the middle and blacks at the bottom, required geographical divisions to be invented, so “Europe” became the whites’ distinctive homeland. Its inhabitants still struggle to find a political union there to match the historically arbitrary idea of their exceptional status.

Some 500 years ago, Iberian explorers looking for a Western route to India, stumbled across the Atlantic and found the New World. They were not the first – Phoenicians, Vikings, Irish monks and Basque fishermen probably preceded them. But this time several centuries of predation and settlement were unleashed, reinforced by circumnavigation of the planet and intensified trade contact with the rest of the world. There was nothing new about this kind of maritime expansion. The Pacific Ocean was criss-crossed by islanders long ago, as was the Indian Ocean by Indonesians, Indians, Chinese and Arabs. There is some dispute over whether the accumulation generated by European commerce, colonisation, plunder and the slave trade between 1500 and 1800 was the root cause of their subsequent global dominance. Karl Marx saw this expansion as the source of the capital fund that powered industrialization, whereas Max Weber felt that there were many similar historical examples that did not lead to industrial capitalism. In general the Europeans made only limited inroads into non-Western regions before the nineteenth century.

The period from 1775 to 1815 saw the American and French revolutions, a world war stretching from the Caribbean to India and the birth of industrial capitalism in Britain. The ensuing peace between the main European powers lasted for a century. As a result of industrial development, European death rates began to fall, while birth rates were slower to fall, leading to rapid demographic growth between 1830 and 1930, after which Europe’s population went into decline. By 1900 people of European descent controlled 90% of the planet’s inhabited land. Taking over the world with such apparent ease led them to ask how this had happened. They concluded that it was because they were smarter than the rest – they had a scientific culture whereas the others had only superstition. Moreover they found a biological cause for this cultural superiority, racial difference; and so the world’s peoples were stratified by colour and, by implication, cultural competence.

Europeans made modern world society in the nineteenth century by forcing the rest of humanity to join their empires, with the unequal results that are now well-known. Their temporary global dominance was principally thanks to a machine revolution that gave them overwhelming superiority in transport, communications and armaments, as well as manufactures more generally. At the same time, a population explosion fuelled their migration to all corners of the planet. The most powerful political entity to emerge from all this was the Anglo-Indian superstate; 85% of all British civil servants lived in India in 1870. The other European powers were forced to react to its dominance – the French in Egypt, the Russians in Afghanistan, the Germans in Persia – and in this way the seeds were sewn for the First World War.

So what happened in the twentieth century? Three decades of war and depression seemed to show that the world’s future lay with competing states of various kinds – communist, fascist, liberal, developmental – culminating in the nuclear nightmare of the Cold War. But the century’s main event was the anti-colonial revolution, the process whereby peoples coerced into world society by Europeans in the previous century now sought to establish their own independent relationship to it. Nowhere was the scale and speed of this revolution more dramatic than in China, the world’s most poverty-stricken and violently disorganized region in the 1930s and now a contender for global leadership. The impact of India’s development on world society since the end of the Cold War is almost as dramatic. But the freeing up of global flows of money and information in the last three decades has brought back extreme inequality and instability to the world economy in a pattern reminiscent of the age of financial imperialism before World War I.

National economic management has been unravelling since the US dollar left the gold standard in 1971. The money circuit has been progressively detached from politics and production and it has grown exponentially in size; but the economic consequences of the lack of fit between national controls and global finance were long disguised by the credit boom that ended in 2007-8. Since then, the North Atlantic societies have been in the doldrums, while “emerging” countries like India, Brazil and China face the challenge of offering a measure of social protection to the millions of citizens that have been drawn into urban markets of late. The divergent unipolar world the Europeans made has been replaced by a convergent multipolar version which resembles nothing so much as the world in the 12th century.

The growing inability of national governments to cope with such a world has led to the rise of regional trading federations such as ASEAN, NAFTA and Mercosul. The EU was originally one of these, following the path taken by Germany from customs union to federal state a century before. The end of the Cold War led to the reunification of West and East Europe at a time when neoliberal globalization was roaring ahead. Monetary union was seen as a shortcut to a United States of Europe whose single currency might rival the dollar. This is the primal scene of Europe’s present woes and it is the subject of James’s massive tome, to be discussed below.

At this stage we should note that the rise of both neoliberalism and the internet fuelled dreams of money and markets uncontaminated by politics. It was also recognized that individual nation-states lacked the means of protecting their citizens from the harsh winds of world markets. But the method of combination chosen by Europe was a fixed exchange-rate union that harked back to Bretton Woods and before that to the gold standard. This retro strategy was ill-suited to the regime of multiple currencies, virtual markets, transnational corporate networks and shifting alliances between states that characterizes the world economy today.

Despite half a century of movement towards greater union, Europeans still approach their common affairs from a national rather than regional point of view. They cling to their fragmented sovereignties and provide support to populist parties of the right who resist the erosion of imagined national community. After half a millennium of receiving unearned income from the rest of the world, that source is now almost dry. At some level the Europeans know that the game is up; but they can’t admit it to themselves. Heritage and education are their main industries today. Life for older citizens is civilised and more secure than elsewhere; but the question remains whether Europeans are prepared for the turbulence of a world in transition.

Europe’s ageing population has collapsed, with births in many places now only half the number of deaths. The immigrants from Africa, Asia and Eastern Europe who work for West Europeans’ pensions are routinely disparaged and socially excluded. France and Britain are the most depressed countries in Europe. They also occasionally support the US in its military adventures; but Europe as a whole has long given up on being able to defend itself. After the 2007-8 financial crisis, divisions have opened up between North and South Europe (symbolized today by the mutual antagonism of Germany and Greece) that were unthinkable a decade ago. While the United States and Russia square up over Ukraine, the Europeans have nothing to say, preferring to paper over the cracks in their obsolete monetary and banking systems.

In 1900 Europe had a population of 400 million, a quarter of the world total (or 36% including lands of European settlement) and three times Africa’s. By 2100 Asia is projected to have 43% of the world’s population (down from 60% today), Africa 39% and the New World, Europe, Russia and Oceania altogether only 18%. Europe’s share will have shrunk from 25% to 6% in 200 years. This is because, while most regional populations are ageing, Europe’s is ageing fastest and only Africans are posting rates of increase comparable to Europeans in the nineteenth century. The Asian manufacturers, especially China, have recognized Africa’s centrality to the growth of world demand in the coming century, but the Europeans and Americans still cling to a model of world society in which their own global dominance could be taken for granted.

What matter in this world are people, machines and money in that order. Population is still a powerful indicator of an economy’s size. In Europe’s case this once went along with control of the other two factors. It is no longer so. As a US air force colonel once told me: “You Europeans have stolen our moral high ground. The Chinese have stolen our manufactures. All we have left is the weapons. I guess that makes it double or quits”. Can anyone feel safe under these circumstances? No wonder that the Europeans are turning inwards away from the world they made and then lost.

A leading American economist once predicted that monetary union would bring Europe to civil war as states fought about secession from a costly economic bond. This was dismissed by Europeans at the time as American sour grapes; but the euro was conceived with massive design flaws that have only become apparent since the financial crisis of 2007-8. The euphoria of the free market’s “victory” in the Cold War led Europeans to aim for “pure money”, a currency entirely free from political intervention that would ensure price stability. Why stable prices? Keynes long ago identified the class interests involved in inflation and deflation: debtors gain when money’s value is eroded; creditors (notably the banks) and savers (owners of capital) lose. The reverse is true if money holds its value or even appreciates. The neoliberal drive to take states and politics out of the management of money was always utopian and ultimately unattainable. The euro from its inception was thus a neoliberal project, promoted by an unholy alliance between hyperactive financiers and the passive governments they had bought.

A comprehensive book by Harold James (Making the European Monetary Union, Harvard UP, 2012, 570 pages) identifies the flaws that were built into the euro from the beginning. These were mainly two: a lack of effective regulation of Europe’s banks and the German trading surplus. The credit boom disguised these flaws; but now they are only too obvious. Europe’s elites treated the financial crisis at first as largely an “Anglo-Saxon” problem. The Italian finance minister even joked that his country’s banks were sound since their managers didn’t speak English! European banks are still hiding bad debt on a scale that their American counterparts have been forced to confront. The European Central Bank’s unlimited promise in September 2012 to buy back bonds issued by member countries with sovereign debt problems has temporarily held the line; but the structural imbalance between Germany and the rest is unresolved.

Europeans now find themselves at centre stage of the world economy, as they have not been since the 1930s, with financial markets hanging on each negotiation and election. The central problem, however, is a deep-seated shift in the world economy, with national and international political institutions now unable to influence a money circuit that has gone global. Money has acquired its apparent pre-eminence because the economy has been extended rapidly from a national to a global level without any of the social regulation that existed before. The current crisis is thus not merely financial, a moment in the historical cycle of credit and debt. The removal of political controls over money in recent decades has led to a situation where politics is still mainly national, but the money circuit is global and lawless. The crisis should rather be seen as the collapse of the money system that the world lived by in the twentieth century. This has been unravelling since the early 1970s, when the US dollar went off the gold standard, a new regime of floating currencies emerged and money derivatives were invented. As the need for international cooperation intensifies, the disconnection between the economy and political institutions makes practical solutions unthinkable.

Some brief examples may indicate the momentous changes that have overtaken money in the last few decades. In Switzerland today, euros are commonly accepted in shops alongside the national currency. If you pay with a card, you can often choose the unit of account (Swiss franc, euro, pound sterling, US dollar). But only francs are acceptable for the payment of local taxes. Are national currencies a store of wealth? Hardly. They have all been radically depreciated and may even disappear, hence the flight to gold—which could turn out to be the biggest asset bubble of them all. As for real estate, the collapse of subprime mortgages got us into the present mess. And I have not even touched on what credit default swaps and collateral debt obligations are used for, or who issues them. The shadow banking system—hedge funds, money market funds, and structured investment vehicles that lie beyond state regulation—is literally out of control. Money stashed away in tax havens far exceeds that disposed by governments. London housing is the new anti-inflation currency for the super-rich.

There is still a tendency to see the potential disaster we are living through in economic rather than political terms. By attacking the free market rather than the use of the state to siphon wealth to the top, neoliberalism’s detractors often reproduce the ideology they claim to oppose. The euro is by no means the only symptom of this crisis, but it may well become the decisive nail in the coffin of the world economy. What then is our moment in history? We should ask not what is beginning, but what is ending. “National capitalism” is ending, the synthesis of nation-states and industrial capitalism whose main symbol was national monopoly currency (legal tender policed by a central bank). It was the institutional attempt to manage money, markets, and accumulation through central bureaucracy within a cultural community of national citizens. It was never the only active principle in world political economy, however: cities, regional federations and empires are as old or much older.

The apparent triumph of the free market at the end of the Cold War induced two huge political blunders, both of them based on the premise that society should be shaped by the market economy rather than the other way round. First, the radical privatization of Soviet bloc public economies ignored the common history of politics, law, and social custom that shored up market economies in the West, thereby delivering economic control into the hands of gangsters and oligarchs. And second, the European single currency, which was supposed to provide the social glue for political union, was adopted without first developing effective fiscal institutions or economic convergence between northern and southern Europe.

The big mistake was to replace national currencies with the euro. An alternative proposal, the “hard European Currency Unit” (ECU), would have floated nationally managed currencies alongside a low-inflation European central bank currency. Countries that didn’t join the euro, like Britain and Switzerland, have in practice enjoyed the privilege of this plural option, but Eurozone countries cannot devalue and so must reduce their debts through deflation—or default. The euro was invented when money was already breaking up into multiple forms and functions. The Americans fought their Civil War before centralizing their currency; whereas the Europeans centralized their currency as a means of achieving political union.

So where are the levers of democratic power to be located, now that globalization has exposed the limitations of national economic management? The cultural logic of national capitalism has led the political classes who got us into this mess to repeat the same mistakes. Politics has become a dialogue of the deaf, between those who absolutely deny the need for any political regulation of the market and others who remain trapped in the outmoded model of state money. It is obvious enough that member states of the Eurozone have been denied the option of devaluation as a means of reducing national debt. The fact is that very few people benefited from the credit boom and those few will sacrifice the rest of us to retain their power. Austerity is good for disciplining the masses and keeping them cowed, certainly better for the rich than expanding popular demand and regulating capital flows. It is up to us to show them they are wrong to think so.

The euro crisis is pushing Europe’s rulers inexorably along a path of social polarization, between corporate bureaucracy and a population rapidly being stripped of the political, legal and economic powers won after 1945. The whole story is a Greek tragedy in both the ancient and contemporary senses, where even the best intentions can no longer remedy the consequences of past mistakes. The tragedy is that, by granting undemocratic powers to the European Central Bank, the EU has ensured that the euro’s stability will be achieved only at the cost of general economic hardship. Mass political resistance will be the inevitable result, thereby further undermining the stability of the currency.

Anthony Giddens (Turbulent and Mighty Continent: What Future for Europe? Polity, 2014, 240 pages) argues that the EU has not delivered either on economic efficiency or democracy. Democratic legitimacy was not a problem at first when Jean Monnet set rather modest economic goals for the union; but it has become a pressing issue now that the heads of unelected bureaucracies (the “troika” of the European Central Bank, the European Commission and the IMF, fronting for the real power, Germany) can dictate stringent austerity policies to national governments such as Greece and Portugal. If Europe is to be further integrated, two persistent problems must be addressed — the lack of both democratic legitimacy and effective leadership. A federal state that devolves real powers to nations, regions and localities is the only way for the democratic deficit to be made good.

Given his commitment to regional federation as a political model, Giddens is certainly more broad-minded than his nationalist contemporaries. But his scope is still much too narrow. He remains trapped in a circle of high-flying European insiders (several of whom endorse this scrappy book) who seem to think that dreaming up internally self-sufficient plans will solve their immediate and long-term problems. It is not much different in other large countries like the United States, Brazil or India. European expansion into the world had tragic consequences for its victims and even for many of its protagonists. Now the tragedy is both inside and outside Europe. The continent is “turbulent” alright, but no longer as “mighty” as it thinks it is. Adjusting to a diminished future will take more than the rediscovery of “European values”, institutional tinkering and a wish list of economic, social and cultural policies to be implemented locally. The rest of the world has good historical reasons for worrying about what could happen if all this fails.

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Money and finance: For an anthropology of globalization Wed, 12 Feb 2014 05:35:06 +0000 Keith Hart (London School of Economics and University of Pretoria) and Horacio Ortiz (Centre de Sociologie de l’Innovation, Paris)

There is much talk today of a financial and economic crisis comparable to the 1930s. With the threat of a currency war and the euro’s collapse looming, the specter of the Great Depression’s bloody aftermath has returned with a vengeance. Several versions of how to make human beings and build society co-existed during the Cold War, when much of the world won independence from colonial empire. Yet, discussion of humanity’s growing interdependence is today limited to a one-world capitalism driven by finance. What have anthropologists to say about that? It would seem very little. But a positive case can be made for the discipline’s contribution to public debate. We make such a case here. We review recent developments in the anthropology of money and finance, listing its achievements, shortcomings and prospects, while referring back to the discipline’s founders a century ago. Economic anthropologists have tended to restrict themselves to niche fields and marginal debates since the 1960s. We hope to reverse this trend by focusing on money’s role in shaping global society and bringing world history into a more active dialogue with ethnography.

Money and finance have been prominent in anthropology since its formation as a modern discipline. Rather than emphasize what money does, as the economists do — a medium of exchange, reserve fund or means of accounting – anthropologists can approach it as an integral part of the hierarchies and networks of exchange through which it circulates. Its multiple meanings in turn keep society together and reinforce the roles played by each member. Money’s capacity to transcend group boundaries drives the extension of society to more inclusive levels and transforms identities in the process. It is a commonplace for our discipline to show that money’s meanings and relations cannot be confined a single theory. Fieldwork-based ethnography – a commitment to joining the people where they live in order to discover what they do and think — was the principal achievement of twentieth-century anthropology; but it is insufficient for studying money (Hart 1986). The ethnographic revolution eventually removed world history from twentieth-century anthropologists’ repertoire. This is hardly conducive to the task of investigating money’s global role in our historical moment. Progress in economic anthropology depends on combining ethnography and world history within a critical perspective (Hann & Hart 2011).

So our trademark research method reaches a limit when we try to understand money’s global circulation today. It would help too if anthropologists were aware of developments in relevant outside disciplines and of contemporary currents of world history that shape how we think. When it comes to money, this means having some knowledge of the history of monetary economics and a perspective on global finance. If the new ethnography of finance is to throw more than superficial light on society, we must transcend the categories that shape media discussion of the “crisis” and try to understand our shared human predicament as a moment in the history of money. We need new methods if we wish to account for how money underpins social identities and relations of conflict, hierarchy and interdependence in the world we are making today. This review proposes some of the tools we need, drawing first on some classical authors who combined openness to ethnographic discovery with a global vision of economic history in their times and then on contemporary anthropological research.

In Part 1, we consider the main social theories of money a century ago, when it was seen to shape the constitution of nation states, capitalist bureaucracy and colonial empire. Marx, Simmel and Weber aspired to develop a general theory of money, whereas Mauss and Polanyi emphasized money’s multiple meanings. This allowed them not only to account for a variety of monetary arrangements, but also to avoid thinking of history in teleological terms and to embrace money’s plasticity as a tool for social transformation.

In Part 2, we assess anthropologists’ achievements since the 1980s. Not only has money come to be seen in a more constructive light, but its variability has been widely acknowledged. With one or two notable exceptions, however, anthropologists have found it hard to link their detailed ethnographic accounts to world history in the longer run. Some still restrict their analyses to observable situations, whether these be personal interactions or organizational spaces, like offices and street markets. Even when anthropologists highlight the political relevance of their findings, they do not directly study global flows of money and the historical situation surrounding them. A few address the larger picture, but they tend to do so from on high without ever touching the ground, which only repeats the model of writing grand theories whose limitations have been well-exposed before.

In the last part, we identify some moves that might help anthropology to illuminate money’s role in constituting world society today. Nostrums inherited from the Cold War era, such as neo-liberalism, Marxism or post-colonial theory, will not do the job. If anthropologists were to recognize money’s potential to transform both world society and every one of us, we could not only think about the past and present, but also contemplate the future. We will not get far as isolated individuals or by denying the need for interdisciplinary collaboration. But harnessing the example of inspiring ancestors to contemporary conditions of possibility offers a good place to start.

Money and finance: anthropology’s classical legacy

Sociology and anthropology emerged as part of a drive to understand and explain how industrialization was changing the West’s place in world history.  Of all the important works produced during that time, we highlight Marcel Mauss’s contribution as being especially relevant since he showed how money was fundamental to how we form distinct aspects of our social identities, without trying to fit them into a unitary theory of money. He mobilized world history to highlight power relations in the industrial societies of his time, while showing how monetary relations extended societies beyond their pretensions to self-sufficiency and were a conspicuous means of their transformation. Mauss stands out in this respect when contrasted with Karl Marx, Max Weber, and Georg Simmel. It links him to Karl Polanyi who also studied monetary relations throughout world history in order to highlight the political plight of his times — the terrible decades of war and depression from 1914 to 1945. Polanyi traced these conflicts to the Victorians’ utopian experiment in free markets, but also to the unequal distribution of wealth and how it might be redressed, a thrust that we hope to build on in charting a progressive path for contemporary anthropology.

Mauss: money and credit as the basis of human identity and for an expanded society

In his famous essay on The Gift, Marcel Mauss (1990 [1925]) showed how the concepts of freedom, justice and the person can only be understood within the specific monetary arrangements that give us our various social identities. Émile Durkheim (1960 [1893]) had demonstrated how a British emphasis on making private contracts in markets obscured the social glue of “the non-contractual element in the contract” that made the economy possible – a combination of law, state, custom, morals and shared history that the sociologist must try to make more visible. Thus, monetary valuation is never just technical, but also moral, religious and political, signaling the symbolic position of each person in society according to various orders of reckoning.

The concept of persona evolved over time (Mauss 1985 [1938]) and with it so did the concept of society: both its inner rules and external boundaries were reshaped by monetary relations.  Malinowski (1921) was adamant that the Trobriand kula valuables were not money in that they did not function as a medium of exchange and standard of value. But, in a long footnote, Mauss held out for a broader conception:

“On this reasoning … there has only been money when precious things … have been really made into currency – namely have been inscribed and impersonalized, and detached from any relationship with any legal entity, whether collective or individual, other than the state that mints them … One only defines in this way a second type of money – our own” (Mauss 1990:127n).

He suggested that primitive valuables are like money in that they “have purchasing power and this power has a figure set on it” (ibid.).  He also took Malinowski to task for reproducing the bourgeois contrast between commercial self-interest and the free gift, a dichotomy that many anthropologists have subsequently attributed to Mauss himself.

One of Mauss’s key modifications to Durkheim’s legacy was to conceive of society as a historical project of humanity whose limits were extended to become ever more inclusive. Society could not be taken for granted as a pre-existent form. It must be made and remade, sometimes from scratch. Gift-exchange pushes the limits of society outwards. “The whole intertribal kula is merely the extreme case … of a more general system. This takes the tribe itself in its entirety out of the narrow sphere of its physical boundaries and even of its interests and rights.” (Mauss 1990: 36).

Mauss (1990) was enthusiastic about the publication of Argonauts of the Western Pacific, but he held that money and markets were human universals, whereas Malinowski (1921, 1922) went out of his way to oppose the kula ring to both. The impersonal economic forms found in capitalist societies were recent inventions, according to Mauss. They shared the world with many other ways to use money, even in Europe and North America, and were bound to be transformed in the future. For him, the socialist movement from below and the development of social protection in Europe were processes in this direction (1990).

Mauss’s financial journalism, particularly concerning the exchange rate crisis of 1922-24, accounts for a fifth of his published political writings (Mauss 1997; Hart 2014), but he generally maintained a firewall between politics and his academic work (Fournier 2006, Hart 2007). He broke this rule only once, in the concluding chapter to The Gift. An example of how far he was prepared to go politically may be found in an unpublished paper, “A means of overhauling society: the manipulation of currencies” (Fournier 2006: 212 and 390 n.105), where he claims, with a strong echo of Keynes, that the great economic revolutions are “monetary in nature” and the manipulation of currencies and credit could be a “method of social revolution …without pain or suffering”:

“It suffices to create new monetary methods within the firmest, the narrowest bounds of prudence. It will then suffice to manage them with the most cautious rules of economics to make them bear fruit among the new entitled beneficiaries. And that is revolution. In this way the common people of different nations would be allowed to know how they can have control over themselves – without the use of words, formulas or myths.”(Mauss, in Fournier, ibid.)

Mauss argued for a pragmatic understanding of the human economy that would be of use to people in their daily lives. Nearly a century later, we draw inspiration from him for a similar argument (Hart & Maurer 2009; Hart, Laville & Cattani 2010).

Marx, Weber and Simmel: grand narratives of capitalist globalization

In spite of his insights into world history and his analytical interest in the institutions governing money at the time, Mauss did not explore them in a systematic way, unlike many of his predecessors and contemporaries. Among these, Karl Marx, Max Weber and Georg Simmel stand out.

Marx (1977 [1869]) was the first economist to recognize the centrality of machine production for the modern economy. He believed that what matters in our societies are people, machines and money in that order; but money controlled the machines and through them most workers. His early slogan, “workers of the world unite” (Marx & Engels 1987 [1848]), was intended to reverse that situation. In contrast to many on the left (and his Stalinist successors) who proposed a world without markets and money, Marx (1973 [1858]) put money at the center of any complex society, both actual and potential (Nishibe 2005). An apparently neutral instrument of exchange among equals in liberal theory, money acted also as a “fetish”, both hiding and articulating hierarchical relations between the owners of the means of production and those whom they exploited (Marx 1977). He incorporated this insight into a historical synthesis of the relations and forces of production which would soon subject the whole world to capitalist expansion. Unlike Mauss, Marx did not expect to learn from other monetary arrangements, but rather expected the movement of resistance to capitalism’s homogenizing logic that he and Engels built to become the horizon of all humanity.

In his Philosophy of Money (1978 [1900]), Simmel attempted to make sense of the unequal monetary relations of his time within a neo-Kantian project aiming at a society of equal and independent individuals. Money allowed for individual expression of desires and thus for the social constitution of an autonomous subject. But, because it only worked as a measure of value because people could count on others to accept it, money transcended the individual. Simmel identified money’s twin anchors as its physical substance (coins, paper) and the community of its users which is an invisible third party to all transactions. He predicted that money’s physical substance would wither away, thereby revealing its social character; indeed it is a symbol of our human capacity to make universal society. As capitalism and colonialism expanded, money would dialectically unite the world through common standards of measure, provoking general recognition that all participating subjects are intrinsically equal and thereby giving rise to a more just distribution of money than that proposed by capitalism. Simmel, in Hegelian fashion, understood the present as a moment in history that would be surpassed by its own teleology.

Max Weber did not engage with world history as teleology, but his analytical categories closely reproduced the moral vision of neo-Kantianism. As we all know, for him the origins of modern capitalism lay in a religious revolution, the Reformation, whose cultural premises had an affinity with business enterprises’ need for rational calculation (Weber 2003 [1904-1905]). He was also aware of the intimate links between bureaucracy, states and capitalist firms (Weber 2013 [1922]). Yet, whether discussing Chinese peasants or Protestant entrepreneurs, the personality structure of his ideal types does not change over time or between places. A subject always exercises free will in relation to different values through action of three types – habitual, affective and rational – that set the limits to what Weber’s (1978 [1920]) sociology can account for. Money does not occupy a distinctive position within this framework, being generally a means of exchange which depends on trust between the participants. Thus, Weber’s historical analysis of capitalism does not support a vision of an alternative future for humanity, but rather envisages the tragic repetition of the general types of human action.

Karl Polanyi and the politics of distribution

In The Great Transformation, Polanyi argued that “Actual money is merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanism of banking or state finance” (2001 [1944]: 72). Money thus did not serve a specific function, but was on the contrary a product of the social relations it articulated. Consistent with this approach, Polanyi inverts the liberal myth of money’s origin in barter: “Long-distance trade often engenders markets, an institution which involves acts of barter, and, if money is used, of buying and selling” (2001: 58). Money and markets thus extend society beyond its local core. This usually entails changes in society, especially distribution (who gets what), for which money is central.

Polanyi distinguished between “token” and “commodity” forms of money. Token money was designed to facilitate domestic trade, commodity money foreign trade. Money was thus

“…not a commodity, it was purchasing power; far from having utility itself, it was merely a counter embodying a quantified claim to things that could be purchased. Clearly, a society in which distribution depended on possession of such tokens of purchasing power was a construction entirely different from market economy” (2001: 196).

Polanyi (2001) held that the utopian attempt to organize all social life as individualized and impersonal market relations, for which Britain from the late eighteenth century was the paradigmatic case, was the main cause of the inequality and broken social ties that led to the Second World War when he wrote his book. As society expanded through monetary relations, the tension between community and anonymity in economic transactions became intolerable. Markets had once been kept at arm’s length from society, but they were now intrinsic to its internal functioning. The move to a welfare state was part of this history. But it implied new forms of sociality where the boundaries separating inside society from outside were increasingly called into question (Polanyi 2001).

Like Mauss, Polanyi explored money’s constitutive role in framing the limits of sociality. He did not take money to be a set of eternal functions (Polanyi 1977 [1964]), nor did it play the same role in establishing power relations and social hierarchies across time and place. His vision may be understood as a critique of market economy, compatible in some ways with the Marxists’. But he wanted to show how various monetary arrangements correspond to different social configurations and that the current alliance between a powerful finance industry and nation-states must be seen in this light, especially if we wish to transform it.

Rather than start, as economic liberals do, with a definition of money’s functions and an ontology of the agents who use it, Mauss and Polanyi show how monetary relations are fundamental to the definition of self and society in specific settings,. These relations are potentially subversive, in that they challenge social rules and hierarchies, even the boundaries of society itself. The perspective on economy that prevails today represents our interdependent world’s contradictions as being largely a conflict over credit and currency; but Mauss and Polanyi point to how anthropologists might help shape humanity’s common future. In the major methodological debates of the 1960s and 70s, however, with Polanyi’s (1957) active encouragement, anthropologists acquiesced in an academic division of labor that limited us to parochial debates and exotic objects of study (Hann & Hart 2011). Although the anthropology of money and finance has been resurgent since the 1980s, we are still struggling with this limitation.

Contemporary research in the anthropology of money and finance

Recent anthropological research in this area has partly followed the paths set by the classics. Some anthropologists still try to link local situations to global history through a grand narrative that would encompass all humanity. The idea that “Western” money has unified and colonized the world has, however, been undermined by a flood of demonstrations that money is more multiple and labile than either its supporters or critics suppose. At the same time, the finance industry itself has become a focus of anthropological attention, even though ethnographic findings are still only weakly linked to the global politics of financial flows. New approaches, avoiding grand narratives but integrating global processes and regional research (e.g. Guyer 2004), point to how the anthropology of money might begin to redress this situation.

What is money? Where does it come from?

Is money an object or an idea, real or virtual? One thing or many? Historically specific or a human universal? Is it a creature of markets or states, or both? Is it credit or debt, or both? Is money impersonal or personal, or both? If it is what it does, which function is most important – medium of exchange, means of payment, unit of account, or store of wealth? Many anthropologists still use the word “money” without saying what they mean by it. Perhaps this is not so remarkable after all. Money is the ocean we all swim in. Whenever did fish make an object of their world? It is not our aim in this review of contemporary research on money to provide definitive answers to these questions; but we should at least indicate where we start from.

It would seem that few anthropologists today (Hart 2005a; Graeber 2011) accept the story that has entered western folklore since Adam Smith (1961 [1776]) invented it. Individuals began by exchanging things they had and others needed for what they themselves needed and others had. Money made the barter more efficient by offering a commodity that would be widely accepted later. This origin myth assumes private property from the beginning: all that is missing from primitive markets is the money. Monetary theorists in Europe since the nineteenth century have opposed this view of money as a product of individual exchange to one where it is the sole creation of the state (Ingham 2004). Here the emphasis is on money as a means of payment (of taxes in particular) and as a standard measure of credit and debt. Monetary policy in the last half century has swung violently between these two extremes.

According to Keith Hart (1986), coins are two-sided for the good reason that political authority and market exchange are both indispensable to money. It is at once a credit token linking persons in society (heads) and a measure of commodities circulating in impersonal markets (tails). David Graeber (2001, 2009, 2011), in a unique historical synthesis, links money to debt. The invention of money 5,000 years ago allowed moral obligations to be given an impersonal measure. Its name was debt and violence was the midwife of its birth. World history since then has seen money oscillate between two poles, virtual credit and currency, often coinage made from precious metals.
We have already seen that Mauss and Polanyi saw money as a means of extending the economic reach of local societies that generally aspired to self-sufficiency. In this sense money and the markets it sustains are human universals, although they take many forms different from those with which we are familiar. Polanyi (1977) noted that the modern money form, national monopoly currencies (“all-purpose money”), was invented in the mid-nineteenth century; and we now know that it has been unravelling since the 1970s. In this regard, several anthropologists have shown that state-building depends on articulating domestic monetary policy with global financial flows (Maurer 2004; Neiburg 2006; Peebles 2008; Holmes 2009).

Meanwhile, Viviana Zelizer (1994), a sociologist whose work has great affinity with ours, has shown that money is given multiple meanings in the United States that go well beyond the expectations of liberal and statist theories. Money is central to relations with high emotional content, such as giving a present to a child, settling a divorce dispute or buying a life insurance contract. Money only comes into existence through these social relations, in that it always make sense within specific social identities, as a means of articulating family ties (Zelizer 2005) or the context of life and death (Zelizer 1979).

This snapshot of the field indicates the pluralism of contemporary anthropological approaches to money, especially our
openness to dialectical and partial approaches. There remains, however, the question of the ocean itself and here we must overcome a legacy of top down world histories that tell just one story.

Grand narratives in current research on money and finance

As early as the 1950s, some anthropologists, notably Paul Bohannan (1955, 1959, see also Polanyi 1957), developed the idea that “Western” or “modern” money was imposing its disruptive rules and social hierarchies on “traditional” societies in the colonial context. Bohannan’s analysis has since been shown to be factually wrong, historically misleading and theoretically naïve: far from being a one-sided process, the integration of sterling or dollars into local economies created new uses for money that also reflected the internal workings of those societies (Parry & Bloch1989; Akin & Robbins 1999; L’Homme 2002). Yet these critiques accepted that “Western” money was indeed “modern” in ways that were usually left unstudied (Maurer 2005a, 2006, 2012; Hart & Maurer 2009).

The conversion of the world economy from the Bretton Woods system of managed exchange rates to a “neoliberal” dispensation allowed finance to escape from national production and politics and to invade all areas of social life in a process known as “financialization” (Epstein 2005). This historical shift has supported another wave of grand narratives, often but not always drawing on Marxism (Gregory 1997, Harvey 2005). Lee and LiPuma (2004) studied the rise of derivatives in foreign exchange markets. Their framework, however, led them to consider these new developments as simply another instance of financial capitalism’s encroachment on the rest of the world (with its “fictitious” money). David Graeber’s (2011) book on debt covers the whole world and many historical moments in a fashion that recalls Max Weber. He identifies three moral forms of economic relations – everyday communism (sharing), exchange (reciprocity) and hierarchy (inequality) – that are combined with varying emphasis throughout human history. But, like Marxist approaches and theories of the Great Divide, his universal history of money does not sit easily with recent research showing how the uses and meanings of money in everyday life are much more multiple and fluid than can be captured by any grand narrative, however encyclopedic its sources. Drawing on Weber more explicitly, Arjun Appadurai (2012) has also recently launched a project to reinvent social theory through studying the finance industry in terms of a new “spirit of calculation” (2012); but this too is likely to run up against similar limits in time.

The ethnography of finance and the politics of distribution

Many ethnographers, drawn from sociology, cultural studies and science studies as well as from anthropology, have shown how the workings of finance in different settings often have little to do with the neoliberal ideology that has justified its recent rise to global dominance. Mitchel Abolafia (1996) revealed how the pits of the New York Stock Exchange were organized by local rules that sought an implicit balance between competition and collaboration among employees (also Baker 1986). Olivier Godechot (2008) likewise identified a “hold-up” strategy for traders to secure high salaries and bonuses by threatening to leave the company along with its proprietary trading software. The behavior of this financial labor aristocracy is hard to square with received theories of “exploitation”. These studies challenge the idea that money and finance can be organized by a single set of rules, that they are “Western” in any meaningful sense and that they conform to the model of labor relations that underpins Capital.

If finance occupies a special place in the anthropology of money today, it is because the industry now plays a disproportionate role in allocating wealth around the world. This was made possible by regulatory changes in the 1970s and 80s and supported by neoliberal claims that independent investors meeting in efficient markets mediated by financial professionals would ensure a globally optimal distribution of resources (Abdelal 2007; Krippner 2011). The gap between these abstract premises of financial regulation and how they are implemented in practice has been pointed out by numerous researchers.

Financial professionals operate in a bureaucratic world, where they are expected to embody the figure of the investor by following stringent and often contradictory rules (Clark & Thrift 2005). These routinely depart from the ideal of “freedom” of exchange that underpins the neoliberal model (Zaloom 2006; Preda 2009; Ortiz 2014). The methods used for making valuations and investments rest on intellectual traditions for which the theological notion of infinity is central (Maurer 2002); and positivist constructions of the relationship between natural law and mathematics (De Goede 2005) are used to determine stock indexes or the “financial value” of futures and credit derivatives (Tett 2009; Ortiz 2013). The usefulness of probabilistic models of risk has been questioned by Ayache (2010), following Meillassoux (2010); but these still significantly shape the economy because they are an essential part of everyday practice in the rating agencies (Ouroussoff 2010; MacKenzie 2011). Their adoption is not due to any intrinsic cognitive clarity, which is largely absent (Knorr Cetina 2005; Knorr Cetina & Preda 2007; Riles 2011; Lépinay 2013). It depends rather, for example, on the strong links forged between academia and the finance industry during the second half of the twentieth century, reinforced by so-called Nobel prizes awarded to economists who promoted the right message (MacKenzie 2006).
None of this criticism appears to disturb the dominant liberal narrative, which continues to shape the finance industry’s institutional practices, as Lucia Müller (2006) has shown for Brazil and Karen Ho (2009) for the United States. Even the notion of “financial crisis” has been assimilated to this discourse (Ortiz 2012). Discussions over how prices would be determined by the Euronext software, for example, hinged on whether it would indeed reproduce the true value expected by liberal theory (Muniesa 2000, 2007). Ellen Hertz’s (1998) pioneering study showed that the Chinese middle classes embraced stock markets as a way for decentralized investors to check state control. Eventually, this led them to consider themselves helpless in the face of “the market”, allowing the state to retain much of its power.

Several anthropologists have shown that citizenship itself is shaped by the debates over monetary policy (Hart 1986). Identification of citizenship with owning a home, while hiding the US economy’s dependence on global credit supplies, underpinned the monetary policy that led to the subprime mortgage crisis there (Jorion 2007). The ideology that currencies are state-made is contradicted by many studies of proliferating currencies produced by other bodies. These can include complementary currencies with transnational circulation or Islamic finance influenced by moral and/or religious narratives that oppose national identity or simply differ from it (Zelizer 1998, Maurer 2005b, Hart 2006).

Bringing world history back in

Although most ethnographers of finance start from the premise that they are studying global processes, their rich results are limited by usually being able only hint at this as a general horizon or perhaps to pinpoint some particular aspect. Grand narratives have the illusory benefit of allowing a situated observation to speak for a world conceived of as being unitary. Analyzing money and finance through its multiple local practices does not permit such a step. After Nader’s (1972) call to study up and Appadurai’s (1986) injunction for us to approach global economic transactions through the meanings that people give to them, some anthropologists have sought to show how the plurality of practice might be unified without being reduced to a single narrative.

Keith Hart (2000, 2005b) has explored how personal uses of money might be incorporated into an analysis that takes into account the role of transnational corporations, state control of money and the rise of new digital media. Here any unifying perspective comes not from an objectifying narrative that would explain everything, but from a moral and political question: how might each person’s experience of money in their daily life be related to massive global inequalities in the distribution of money? One immediate conclusion is that several processes take place at the same time, competing with and influencing each other. Nigel Dodd (2005, 2014) agrees: only by approaching money as a labile social relation with rules that change can we address money’s multiplicity at the global level, seeing it as a product of several histories that join and part, in an increasingly interconnected world.

Jane Guyer (2004) has demonstrated how this can be done in practice, thereby opening up new methodological horizons for the study of money. Based on long-term participant observation and archival research, she shows that Atlantic Africans developed a plural framework for commerce, where social rank, multiple scales of monetary valuation and circuits of exchange intersect and diverge. Her historical analysis takes in indigenous developments, reactions to imperialism and global economic ties after independence. Guyer contrasted this flexible regional culture with the reductive oversimplifications of economic historians and the parochialism of local ethnographers. But she has subsequently (Guyer 2010, 2012) extended her reach to include monetary practices in the contemporary United States and in British economic history. In the process she is discovering that the European sailors and traders who first encountered Atlantic Africa brought with them commercial practices that were closer to the indigenous model than to any that we have imputed to them after the fact. Guyer’s outstanding achievement is that she has been able to describe and explain how new monetary relations are created without resorting to a single overarching narrative of what money is.

The way forward for an anthropology of money and finance

Finally, we propose a reflexive strategy for the anthropology of money and finance grounded in the pragmatic approach that we have outlined so far. Our own analytical categories, conceptual assumptions and normative propositions are part of the object that we study. This presents both a challenge and an opportunity.

The need to combine fieldwork methods with historical study of global processes

Ethnographic fieldwork generates knowledge of the regularities and changes of everyday life. But when it comes to money and finance, whatever we study is part of exchange networks that go far beyond the limits of our observations. The whole point of markets is that their extent is unknowable and beyond effective local control. Not only do social interactions proliferate beyond our gaze, but so too do the concepts and narratives that people use to make sense of them. The first step in linking everyday practices to the global contexts that make them understandable is historical comparison. We illustrate this point with regard to the categories of economic and financial theory and to the alleged contrast between state-made money and citizenship in the West and the rest.

Much ethnography of finance focuses on cognitive aspects of the situations observed, as if knowledge production were the firms’ principal objective. We learn how barriers to the communication of information challenge the regulators’ assumptions concerning “efficient” markets and the optimal allocation of resources. But in these studies, we rarely discover where the money goes and in what quantities, yet these are businesses, not academic departments. An inability to examine the relationship between money and knowledge reflexively risks reproducing the finance industry’s own vision of itself. The same is true of unreflecting use of categories such as “investors” and “markets” (Ortiz 2014). In recent talk of the “crisis”, it has passed largely unnoticed that, according to financial regulations, the term refers to the temporary failure of “markets” without ever questioning their long-term “efficiency”. Moreover, the financial crisis looks very different when viewed from countries, like China and Brazil, where economic conditions improved recently or the Democratic Republic of Congo where conditions remain catastrophic without ever attracting the investment interest that fuelled real estate speculation in the United States (Jorion 2007, Hart 2012, Ortiz 2012). Rather than repeat the categories of financial theory and regulation without reflexivity, anthropologists need to investigate their intellectual history more critically (De Goede 2005, MacKenzie 2006, Preda 2009).

The Great Divide still beggars investigation of the state’s role in the production of money. Hegel’s (1821) idea of the state bears little resemblance to the variety of forms that go by that name today. Yet the West, which supposedly invented money in the form of national monopoly currency, is routinely contrasted with the rest who must adopt the “modern” model by means of colonization or rationalization (Hart 2000, Guyer 2004). Yet anthropologists have shown that state formation in Caribbean offshore islands requires them to adopt a form of sovereignty that leaves them open to global financial flows (Maurer 2004), while the Chinese state seeks to control its citizens through regulating participation in financial markets (Hertz 1998). By placing fieldwork observations within a framework of global comparison anthropologists can promote different views of the state and its relation to money.

Too often, anthropologists acknowledge the centrality of history, but leave it out of their descriptions and analyses. Thus, even when analyzing colonial relations, the contributors to (Parry & Bloch 1989) assumed the global context away in order to concentrate on their local objects of study. Global networks usually appear in ethnographies of finance, if at all, only as an implicit abstraction. Like media accounts of the financial crisis, most ethnographers conflate local events with ‘the world’ (Ortiz 2012). Labelling everything ‘neoliberalism’ is likewise a poor substitute for studying world economy. Mauss (1990) made a pointed contribution to debates about income distribution and inequality in France by highlighting how reciprocity traverses hierarchy in the Northwest Coast potlatch, the kula ring and ancient Teutonic law. He saw the bedrock of all human morality in his comparisons. But he also generated analytical categories broad and deep enough for us to say something different about present times.
States, corporations and regional associations

Money, first as precious metals and lately in paper and electronic forms, has been long guaranteed by what Weber (1978) called the state’s “monopoly of the use of legitimate violence”. But it only took the form of a national monopoly in the mid-nineteenth century, reaching its apogee after the Second World War, and has been decomposing since the end of the Bretton Woods agreements in 1971 (Galbraith 1975; Eichengreen 1996; Hart 2012). ‘National capitalism’ (Hart 2009) is the modern synthesis of the nation-state and industrial capitalism, the institutional attempt to manage money, markets and accumulation through central bureaucracy within a cultural community of national citizens. The nation-state has dominated thinking about society since the mid-nineteenth century, even though society has long been leaking across its boundaries, and money is its most powerful symbol. But the ‘non-contractual element in the contract’ (Durkheim 1960) is no longer sustained by national frameworks alone. The single-currency model of national economy is being extended to become a more plural, federal assemblage, thereby creating new forms of inclusion and conflict. Regional associations, whatever the limitations of their design, are already a step in this direction. The International Financial Institutions (IFIs) are in search of a new Bretton Woods, as the Beijing Consensus attempts to challenge the Washington Consensus in a multi-polar geopolitics; and bottom-up approaches to building world institutions afresh are claiming a share of the political design (Pleyers 2010).

National governments are being sidelined by international and regional organizations, such as ASEAN, the Chiang Mai agreements supporting foreign exchange stability in East Asia, Mercosul or the European Union with its eurozone. East African governments are discussing tax unions to deal with Chinese trade. United Nations bodies, the IMF, the World Bank, the World Trade Organization and the International Organization of Security Commissions all still claim to derive their legitimacy from states. But their specific areas of competence sustain a global network of decision-making that no single state can control on its own.

The rise of European states cannot be understood outside their symbiotic and conflicting relations with corporations and global financial institutions. Global corporations, still called “multi-national” due to their ambiguous allegiance to state-made laws, articulate global flows of money that far surpass the capacity of any state to control them. They create their own monetary instruments (Zelizer 1994) and, while retaining limited liability for debts, they benefit from the legal rights and moral personhood accorded individual citizens, despite their much greater wealth, power and longevity (Hart 2005b). They are redrawing the concept of citizenship around the world. Anthropologists have been slow to grasp the dynamics of a world economy where these corporations seek to control all stages from research and development, through production, regulation, distribution and marketing to household consumption (Applbaum 2004).
Finance, communications technologies and new forms of money

The progressive collapse of the gold standard in the twentieth century has been accompanied by the extension of mass communications: first radio, TV and cinema, lately the internet and cellular phones. This is fundamental to the finance industry and its crises, as well as to global tensions over trade and currencies. New communication technologies have changed how billions relate to humanity at every level from the most intimate to the most inclusive. All-purpose money (Polanyi 1977) has been breaking up since the US dollar went off gold in 1971 (Dembinski & Perritaz 2000). World economy has been moving towards a new plural pattern of competing currencies reminiscent of what was normal before the advent of national capitalism. The finance industry produces restricted monies and forms of credit that mix with national currencies, reinforcing and weakening them. Like state-money since the gold standard ended, other money forms are emerging, based on communications networks, multiple institutions and mutual trust.

Thanks to the communications revolution, foreign exchange markets now turn over $4 trillion a day, while the capitalization of markets for stocks and bonds far exceeds global output. The volume of information now circulating in real time through the Internet’s cables and satellites was unthinkable less than a century ago. Along with the mass media, this has allowed the whole world to enter people’s homes and to inform daily transactions everywhere. This technological revolution has not just reinforced centralized institutions like the banks and governments. It has allowed everyday life to be linked to the world economy through money (Hart 2000). Since the millennium, we have seen an explosion of the social media (Web 2.0) and a shift towards the use of mobile phones for computing operations and increasingly for monetary transactions. The internet never had a built-in means of payment, but mobile phones do (Agar 2004; Horst & Miller 2006).

Finally, proliferating alternative currencies now create different forms of monetary sovereignty and educate participants in new ways of thinking about monetary possibilities and social justice (Zelizer 1998; Maurer 2005b; Hart 2006). A single-minded focus on national currencies misses entirely the windows on global distribution that these experiments open up.

Money in the making of society at all levels

Where are the levers of democratic power to be located, now that globalization has exposed the limitations of national economic management? The current crisis challenges contemporary financial ideas, while its tangible distributive effects are felt and feared throughout the world. We are witnessing a power struggle of awesome consequences and economic anthropologists cannot afford to stand to one side. Rather than support our proposals with a single story, we start from the multiple ways that human beings have already inserted themselves into existing unequal society which should inform new developments in the human economy (Pleyers 2010, Hart, Laville and Cattani 2010).

Anthropologists have gained immensely from exploring the capitalist heartlands, but we must still aspire to a wide range of geographical knowledge. An economic anthropology that limits itself to ethnographic studies of stockbrokers or traders will never grasp humanity’s shared economic predicament. By studying monetary relations on different geographical scales, from intimate encounters to foreign exchange markets, anthropologists can help create new meanings and connections between our everyday life and the seven billion people with whom we share it.

Through the internet or phone network, we can span now the world and connect personally with people whom we will never meet. Humanity has at last found universal media for the expression of universal ideas. Money is essential to their dissemination. It is a constitutive part of our multiple-layered identities, from the most intimate relations to communities of exchange on a vast scale. Money allows us to express ourselves and indexes our place in hierarchies, solidarities and enclosures. Our identities expand, fragment and recombine as we move from the most local transactions to national or regional currencies. Central banks, insurance companies, pension funds, global and local banks, savings clubs and other local credit schemes, all shape the possibilities for our personalities to develop. We learn about politics and our membership of larger groups by participation in monetary networks that exclude and entrap us even as they extend our horizons. As Mauss saw, the notion of society itself is reshaped by this multifarious expansion. If we hope for a more peaceful and integrated world society, money will certainly play an important role in its formation.


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Scaling the world down, scaling the self up, bridging the gap Fri, 24 Jan 2014 07:42:54 +0000 On the one side, ladies and gentlemen, what passes between the ears of a puny self; on the other, a vast unknowable universe that could come crashing down around your ears at any time — and will when you die, as everyone must. How to bridge the gap? This is an existential question that goes far beyond the claims of a minor twentieth century academic discipline currently down on its luck. But it is one that anthropologists might address, if we wanted to.

Traditionally religion performed this task and, as long as those governing society acknowledged its role, there was a tangible bridge between men of power and the masses. A fraudulent one, perhaps, but civilizations were built on it. For over a century now this link has been broken in the societies with most influence on world history. Rather, science presumptively rules and social science has replaced the humanities. It is worth recalling the method of the humanities — truth of potentially universal significance was sought through the exercise of personal judgment on particular cases backed by scholarship and rigorous thought. Kant’s Copernican revolution consisted in this (but we could just as easily attribute the movement to Michel de Montaigne): “Hitherto we have made our knowledge conform to the world of objects, but perhaps the objects should conform to our knowledge”. Great literature was always the main vehicle for this approach, but also history, law, philosophy and, let it be acknowledged, ethnography.

There is a common method to all this which exceeds the limits of academic inquiry. We need to scale the world down and scale the self up so that they can meet somewhere with the prospect of making a meaningful connection between them. That is the problem and anthropologists could throw light on a great variety of ways that people have tried to solve it. The classic means to this end is prayer. Religion is, among many other things, an attempt to maintain a binding link between something deeply personal and subjective inside each of us and the impersonal world out there that we inhabit. I can talk to God, privately or collectively in public. Marcel Mauss made prayer the topic of his unfinished PhD thesis because “speech is the unity of thought and action”. Many people in our world still bridge the gap this way.

I would argue that the main way we attempted to reconfigure our relationship to the world in the first two centuries of industrialization was through the consumption of fiction: novels, plays, movies. Here the world is reduced in scale to a stage, paperback or screen, allowing individual members of the audience to enter it on any subjective terms they wish. Who do you identify with — Pierre or Andre? Would you marry Natasha? Could you have saved Napoleon’s army at Borodino? Sophocles and Shakepeare stand out as social thinkers because their medium bridged the gap between human personality and an impersonal world most effectively. But the modern novelists and movie makers are not far behind.

Global communications are in transition between the age of the mass media and the possibilties for expressing ideas large and small through the new universal media afforded by the internet and the mobile phone. That is something for us to contemplate reflexively here at the OAC. Of which more anon.

The main event of the twentieth century was the anti-colonial revolution, a process, stimulated by world war, whereby people coerced into world society by western imperialism in the previous century tried to establish an independent relationship to it. I study the intellectuals of this movement, of whom the greatest was M.K. Gandhi. Gandhi made a career from developing methods of bridging the gap (for which his Autobiography is the best single source). His appeal to the West is that he forged a combination of East/West congenial to us — Victorian romantics and the Buddha — which is also why the Hindus killed him. Gandhi held that the purpose of a civilzation is to enable its members, whereas the modern state disables its citizens, making us patients, students, taxpayers, prisoners. His anthropology (philosophical humanism) held that we are all unique personalities who participate together in our common humanity. The question is, how to span the gap? We do so normally by emphasizing divisions of race, class, nationality, religion, gender, time and place which mediate the poles. He, like Rousseau and others, asked what size and type of social units were most conducive to enabling citizens within a common framework of belonging. And he came up with the village as being most suitable for Indians at that time, since most of them lived there already and could express themselves through it. Nehru had other ideas.

Two examples from his life. When he went to London to study the law, he couldn’t find anything he wanted to eat. He joined the Vegetarian Society, got on the committee and, two years later, there were 20 vegetarian restaurants in London. He developed his political methids during two decades in South Africa, then in the mid-20s a large strike broke out in Ahmedabad, an Indian industrial city. Gandhi made his way there and sat down on a street corner. Within a few days the whole strike hinged on him. This is scaling the world down and scaling the self up, so that the two can meet in some meaningful connection.

In this thread we have been discussing what I take to be a pathological variant of this theme, one that is fundamentally anti-democratic in spirit and effect. This is when the world is reduced to the mental scope of a single intellectual who alone claims to uderstand its meaning. Its academic prototype is the 19th century German professor of philology who comes to dominate his field by the sheer weight of his mastery. You learn forty languages, see off allcomers and in the end you get to write the dictionary, with all your pet preferences and peeves included as objective knowledge. The fathers of contemporary structuralism all qualify — Levi-Strauss (think of the egotism of Tristes Tropiques), Chomsky (his own Doppelganger as linguist and troublemaker), Althusser (who admitted to not having read Capital after murdering his wife). Latour we have probably had enough of by now, but compare his method with Rousseau’s or Gandhi’s and you will quickly see that his aim is the opposite of democratic revolution. He claims to oppose intellectual elites by downgrading human intelligence or rather monopolising it and even claims to be a democrat by liberating the molecules.

And of course there are the great scientists themselves who light up the world with an equation — E = MC sq. Stephen Hawking dreams of finding a theory of everything. In all these latter cases, the pedagogical message is “Do what I do and, if you are lucky, you will be one of the handful of recongized masters in forty years time.” It’s not surprising that the mass of graduate students that are now surplus to requirements can’t buy into that one. On a personal note, I have always tried to widen the historical scope of anthropology, but I never succeeded in teaching world history. Ethnographic monographs score every time because they reduce the world to the size of a paperback, just as novels do, and students can imagine themselves making sense of Nuer society, using only the materials at hand.

I hope this manifesto will not be taken as an ad hominem critique, but, at least in the persona available to us here, Mark is an example of someone who represents the world as an implacable and singular entity illuminated by human stories to which in general he alone has unique access. This access is in turn anchored in a life story that none of us can replicate. How do I know? Because I often play the same game myself, but I can’t enjoy indulging the model quite as single-mindedly. It’s a problem. But these latter examples should indicate that virtuoso reductions of the world to omniscient personal meaning are most effective when harnessed to the political project of democracy. Shakespeare sold bums on seats by asking how the new Tudor state could resolve the contradiction between public office and personal rule. Hamlet, Macbeth and Lear were the culmination of his search for answers. We still learn more from them than from the political scientists (or anthropologists) of our day.


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Why is anthropology not a public science? Thu, 14 Nov 2013 08:06:38 +0000 Anthropologists have given up on speculating about the unity of humanity and simply chronicle the diversity (as Lévi-Strauss put it in his UNESCO paper on race). Everywhere we look these days, the question arises of why anthropology has so weak a public profile. This is my answer, some parts tongue in cheek, others less so. My case study is the one I know best.Between the wars British social anthropology had a coherent object, theory and method. The object was primitive societies (as a sort of metaphor for complex societies), the theory was functionalism (whatever they do adds up to something) and the method was fieldwork-based ethnography. So you lived in exotic places and observed what they did there. Since then we have dropped both the object and the theory, retaining only the method which leads to short-sighted localism.

Foucault has an interesting observation towards the end of The Order of Things. He 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.” “[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”.

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”. 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.

When I joined British social anthropology at Cambridge in the mid-60s, I soon learned that I was being inducted into a cross between a cult and a lineage, specifically into a double descent group whose twin founding ancestors were Malinowski and Radcliffe-Brown. The idea was to get within two degrees of separation of one or both of these, which wasn’t hard. Malinowski stood for ‘fieldwork’ (I have been there and you haven’t), Radcliffe-Brown for ‘theory’, a kind of theory I was unfamiliar with which had nothing to do with western intellectual history, but rather seemed to have sprung, like Athena from Zeus, out of the foreheads of initiates after they underwent prolonged exposure to the lives of exotic peoples.

This apparent disregard for the Western canon gave the social anthropologists a reputation for being as illiterate as the barbarians they studied and they had only recently won significant acceptance as fellows of Cambridge colleges. Even so, they had a fairly prominent public profile. Edmund Leach wrote pyrotechnic reviews for the New Statesman and later gave acclaimed BBC Reith Lectures. The humanities dons were beginning to use their concepts and cite their books.

The common curriculum was very narrow, despite the intellectual adventures that our teachers went in for themselves. I once asked in a supervision, “Why are the Lele matrilineal?” and was told, “We ask how, not why. That is evolutionary history. We are only interested in the functional consequences for Lele society that they are matrilineal.” Yet Jack Goody had already embarked on his wide-ranging historical inquiries and wrote articles in places like New Society saying that social anthropology was after all comparative sociology; Meyer Fortes gave public lectures incorporating the legacy of Freud and Judaeo-Christianity; Edmund Leach came into the lecture room one day waving Le cru et le cuit and told us that anthropology would never be the same again.

It was confusing, but the adepts among us realised that being intellectually retarded by the official syllabus was necessary if we were to be admitted to the secret society. And the big secret was that it was a holding company for those with the right credentials to do whatever they like and call it ‘social anthropology’. Meyer Fortes, who took the spirit of the guild and made a trade union out of it, said “Social anthropology is what social anthropologists do” — and he had a way of controlling who they were, the Association of Social Anthropologists. He once told me with more than a hint of irony, after I complained about the mindless empiricism and factional disputes that animated the Cambridge seminar, “Your problem is that you are too rational, Keith. Anthropology is irrational.”

A new professional cadre, tightly controlled by a few acolytes of the founding fathers, had numerous battles to fight in order to preserve their hard-won independence. At first it had been the amateurs — the missionaries, the racists, the folklorists, the district commissioners, the Rosicrucians. Then there were the leftovers of Victorian evolutionism, the vigorous cell of diffusionists, all the non-sociologists who cluttered up the Royal Anthropological Institute and its publications. And of course there were the Americans who actually funded Malinowski at the International African Institute to promote studies of the sun setting on the empire (“the dynamics of culture contact”) and who always threatened to overwhelm the British demographically (“I just don’t care for their kind of writing”, wrote Evans-Pritchard. Well, Clifford Geertz got his own back with a vengeance). The empire itself posed problems. After all, we couldn’t let those Australians, South Africans and Indians adulterate our brand by doing their own thing, even if they trained more students than we did. No wonder the rallying cry was ‘theory’ with Gluckman as cheer leader.

It was only when I met an old West Indian revolutionary, C.L.R. James, that I realised how seriously biased my education had been when it came to the anti-colonial revolution. It seems obvious now that the end of empire removed the institutional basis from any claim that “the sociology of primitive peoples” was a universal discipline. Indeed, the question of the relationship between social anthropology and empire became a hot topic in the 60s and 70s after the event. It was a way for a new generation to differentiate itself from the elders who were, I think, rightly aggrieved over being misrepresented. They had always sided with the liberal establishment in London against the racist regimes of the colonies they worked in. Had they not fought evolutionary racism as strongly as Boas and the cultural relativists? Alright, they stayed out of the UNESCO report on race in the 1950s, but that was to protect the discipline’s scientific standing in the universities by steering clear of ‘controversy’. It was misleading to say they had assisted in the subjection of indigenous peoples to imperial rule. No, social anthropology did not do much for the cause of empire. Its main contribution was to shore up the nation-state at home.

The British could reasonably claim to have launched ‘ethnography’ as the dominant worldwide paradigm of social and cultural anthropology in the twentieth century. And Malinowski was its prophet. He got the model from Central European nationalism: the ethnographer describes the timeless customs of a peasantry living close to nature and bound together by kinship, the living soul of a Volk seeking a state to match its culture and territory. His timing was perfect. President Wilson supervised the Versailles project to replace empire with a system of nation-states. The new academic ethnographers reproduced that political model in their ‘primitive sociology’, lending to a war-ridden and fragmented world the appearance of timeless universality. Moreover, Radcliffe-Brown’s contribution, structural-functionalism (a label exported to American sociology by Talcott Parsons), claimed that the simpler societies replicated in microcosm eternal principles of social order, as manifested in corporate states of the inter-war period. Malinowski and Radcliffe-Brown shared Durkheim as a precursor because their discipline was implicitly conceived of as a means of defending the nation-state and its ‘organic’ division of labour against revolution. The social anthropologists had more important ideological priorities than merely shoring up the peace in the colonies.

The model of fieldwork-based ethnography that is still sacrosanct for most social anthropologists thus had a specific historical origin and a contemporary social function. It was appropriate to insist that social anthropology was distinctively British. This was after all the nationalist century. But the model and its social matrix, national capitalism, came out of something else and they have been giving way to new forms for some time. It is hard for us to see that ‘ethnography’ reflects the central tendency of 20th century world society, just as its predecessors as the dominant paradigm for anthropology reflected theirs. We pay lip-service to our discipline’s origin in the Enlightenment as a quest for the principles of human nature with which to replace the arbitrary inequality of the old regime. But we generally ignore the fact that Kant coined the term ‘anthropology’ for modern purposes, as part of a cosmopolitan liberal project that still has much resonance for us. The next stage we know mainly in order to denigrate it, as our founders did in their struggle to get established. The Victorians explained their easy conquest of the world as a result of a superior culture linked to biology and the method of evolutionary history helped them to organise the ongoing development of a universal racial hierarchy. The age of nationalism, our own, likewise needed a vision of the world as a medley of isolated cultures and the social anthropologists provided one. It is unlikely to be the last in the sequence.

Lee Drummond has pointed out in his OAC paper on Lance Armstrong that American cultural anthropology bowdlerized genocide in the Americas. Twentieth century anthropology was in full flight from its actual history of war, urbanization and massive dislocation of peoples, choosing rather to study yam growers on Pacific islands as if they were not part of that world history. “Stop the world, I want to get off”. After the Cold War, something new has happened. Anthropologists do fieldwork anywhere in a world unified by capitalism, but they still stick with the restrictions of the method.We get studies of “knowledge practices” in a Tokyo stockbroker’s office, but receive no insight into where the money goes or why. How could the public be interested in amateur studies of contemporary finance without the money?

Anthropologists used to have to address a wider public in order to get books published at all, but since the 1980s, the academic market has expanded to let them publish only for each other and their students. But the main reason we have become introverted and shy of exposing ourselves to outsiders is that the fundamental method of anthropology doesn’t stand up to scientific scrutiny. We make ethnographic observations and build up a picture of social wholes from them, but the evidence can never substantiate the claims we make. So we hoard our field notes away from the public gaze and only talk to other anthropologists who, as members of the club, never ask awkward questions about our dirty secret. The irony is that because we draw on social immersion to make intuitive generalisations, we are more often right than other practitioners whose methods are more strictly positivist. If we could own up to our real method and make a virtue of it, we might feel more confident about addressing the general public. That’s why I like Foucault’s argument above. As insiders, we could probably come up with a better one.

It is a truism that no-one knows what anthropology is about. I would claim that this applies to the professionals too. We lack a coherent object, theory and method. If it were up to me, I would have as our object “the making of world society” (or “the new human universal”, not an idea, but 7 bn of us trying to live together on this planet, now with the benefit of universal media for the first time) and our methods need to be more eclectic than they are. The theory can wait. But I haven’t had many takers so far, especially from academic anthropologists.

Maybe, at an important level, anthropology, like great literature, is irrational after all. And it has escaped from the grasp of the old imperial centres — Britain, France and the US — to flourish in many places that defy summary, such as Brazil, Scandinavia, South Africa, Canada, Australia, Southern and Eastern Europe, Japan and India.


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