The Memory Bank

Keith Hart (London School of Economics and University of Pretoria) and Horacio Ortiz (Centre de sociologie de l’innovation, Paris).

This is an essay in the making currently posted in three parts with a separate bibliography. We hope to circulate it widely and invite you to comment and discuss all or bits of it, as you wish. The project reviews developments in the anthropology of money and finance over the last century, listing its achievements, shortcomings and prospects. We are working on it for publication as a literature review that we hope will engage not only students, but also some professionals in the field of money and finance, not only anthropologists, but all who want to understand better the world economy today. Since the 1960s, anthropologists have tended to restrict themselves to niche fields and marginal debates. We hope to to reverse this trend, integrating world history and stressing the importance of money in shaping global society.

Apart from this introductory post, we list the three parts and bibliography as follows:

Part 1  Money and finance: anthropology’s classical legacy

Here we take our departure from the work of Marcel Mauss and Karl Polanyi, both of whom combined openness to ethnographic research with a vision of world history as a whole. Polanyi stimulated a prominent debate in economic anthropology at a time when its subject matter was still largely non-industrial societies.

Part 2  Contemporary research on the anthropology of money and finance

From the 1980s the anthropological study of money and especially ethnographies of finance have taken off, including by sociologists influenced by science and cultural studies. Younger scholars have begun to tackle the financial industry itself. In spite of taking on new objects and directions, they still fall short of meeting the potential that we explore in the first part.

Part 3  Prospects for the anthropology of money and finance

Our constructive proposals for a way forward emphasize the need to extend a narrow ethnographic focus on local professional practices towards a more inclusive perspective on the world economy that is inspired in part by Mauss and Polanyi’s example. Here we present our own version of how anthropologists might engage more effectively with the momentous developments of our own times.

Part 4  The anthropology of money and finance: references Continue reading ‘The anthropology of money and finance: from ethnography to world history’ »

The origins of West African political economy

In the course of the twentieth century West Africa went through a revolution consisting of an explosion in population, the rise of huge cities and the political division of the region into nominally independent states. While becoming more closely integrated into the world economy than ever before, the region remains poor when compared with most other parts of the world. If we wish to understand why this is so and what the prospects are for a more prosperous future, it will not do to focus solely on external determinants of economic backwardness. Many of West Africa’s problems have deep-seated causes, while others are the result of quite recent factors. I attempt here to place contemporary political economy within a long-run framework emphasizing the region’s unity and variety. If I devote more than usual attention to the traditional variety of West African societies, it is because they still shape the present strongly, especially if we wish to take into account the many differences between them.

West Africa is the nearest tropical region to Europe, from which it is separated by the Arabic civilizations of North Africa and the Middle East. Much of its peoples’ history depends on this fact; but the origin of the tripartite relationship between the regions bordering on the Northeast Atlantic and Mediterranean seas remains shrouded in mystery. For modern Europeans, the history of West Africa goes back only half a millennium to the time when the Portuguese began to explore an African route to the east round the flanks of Islam. For Arabs, it began in the eleventh century, with the temporary expansion of Almoravid conquerors beyond the Maghreb down the coast toward the Senegal River. They did not stay long. Those who have attempted to conquer West Africa never have. Continue reading ‘West African political economy: a regional history’ »

An earlier essay, ‘Manifesto for a human economy‘, deals explicitly with the object, theory and methods of a human economy approach. Here I examine some of the precedents for such an approach in the history of modern revolutions.

‘Human economy’ is one way of taking forward the great conversation about making a better world. Here I will mention a few individuals who have helped me to find my own voice in this conversation, all of them participants in the revolutions that made the modern world.  I focus on two historical sequences – the Western liberal revolutions of the 17^th to 19^th centuries and the anti-colonial revolutions which displaced European empire in the 20^th. The American Revolution was both liberal and anti-colonial. A similar combination undermined the Soviet Empire two decades ago and now fuels resistance to the American Empire in North Africa and the Middle East today. After three decades of neoliberal globalization, we are entering a new phase of the struggle for a world fit for all people to live in. Emergent world society is the new human universal – not an idea, but the fact of our shared occupation of the planet crying out for new principles of association. So the context for a human economy approach is this unfinished attempt to remove unequal society, a process that has often been shaped by war and revolution. Continue reading ‘The human economy: a strategy in the struggle for happiness’ »

Africans wait for emancipation in an unequal world

We live in a racist world. Despite the collapse of European empire and the formal adoption of a façade of international bureaucracy, the vast majority of black Africans are still waiting for meaningful emancipation from their perceived social inferiority. The idea that humanity consists of a racial hierarchy with blacks at the bottom is an old one. But the Caribbean economist, W. Arthur Lewis, argued that the division of the world economy between rich manufacturing exporters and poor raw material exporters became entrenched in the decades before the First World War.[i] That bipolar economic order has been shifting for some time now, largely as a result of the emergence of Asian powers as engines of capitalist growth.

Now there is much talk of economic growth in Africa. In the present decade, 7 out of the 10 fastest-growing economies (as conventionally measured) are African.[ii] In 1900 Africa was the world’s least densely populated and urbanized continent with 7.5% of the total. Today it is double that, with an urban share fast approaching the global average. According to UN projections, Africa will be home to 24% of all the people alive in 2050, 35% in 2100. This is because its annual population growth rate is 2.5% when the rest of the world is ageing. The Asian manufacturing countries already recognize that Africa is the fastest-growing market in the world. This could provide an opportunity for Africans to play a stronger hand in international negotiations. If they succeed in standing up for themselves, it would be a world revolution, the end of the racist world order, no less. Continue reading ‘State, region and revolution in African development’ »

It was the best of times, it was the worst of times. — Charles Dickens

The euro coins and notes were introduced on 1 January, with mildly euphoric expectations of a new era for Europe. The national currencies of twelve countries, which had been linked together for some time, now ceased to be legal tender, being replaced by what is in effect a federal state currency like the dollar. By contrast, at the other end of the world in Argentina, the crisis of the peso, which is linked to the dollar, provoked a proposal for a parallel currency, the argentino. This lasted no longer than Adolfo Rodriguez Saa, one of five presidents in less than two weeks, who announced it. Then the peso itself was made new, this time at a dollar price 30 percent lower than before.

Both cases are an admission of the failure of national currencies and involve coining new currencies to remedy this. I would like to reflect here on some inadequacies of national currencies and the possibility that their eventual failure can and does open avenues for ordinary citizens to take initiatives in their own hands with community currency systems. Such a topic is worthy of anthropological investigation, which is why I am writing a book about it. Continue reading ‘A tale of two currencies: the euro and Argentinian peso compared (2002)’ »

1. LETS and me
2. The euro crisis
3. The collapse of national capitalism
4. A human economy approach
5. Harnessing bureaucracy to grassroots democracy

LETS and me

All my life money has been an obsession. I have always been keener to understand it than to have a lot of it. When I was 5, I was bewildered by the relationship between rationing coupons and pocket money (Hart 2000:176). When I was 12, I took up betting on the horses. Gambling saw me through university (Hart 2013). I even became an entrepreneur in the slums of a West African city as part of my doctoral fieldwork. I put together a small real estate fortune during the 70s and then lost it when I was divorced. So, when I was asked to give a public lecture to my fellow anthropologists in the mid-80s, it was not surprising that I hit upon the topic of money. I brought plenty of personal experience to my subject, none of which showed in my official presentation. I called this ‘Heads or tails?’, referring to the two sides of a coin, one representing money as an aspect of political society, the other its value as a commodity in exchange. My argument was that both sides, state and market, were indispensable to money, but for much of the 20th century we had been subjected to ruinous swings between theories emphasizing one side to the exclusion of the other. The lecture was published in Man (Hart 1986). Continue reading ‘Money in the making of a human economy: beyond national capitalism’ »

Introduction

I first explain what I mean by saying that the informal economy, a concept I was associated with coining in the early 1970s, has taken over the world, largely as a result of neoliberal deregulation over the last three decades. After a brief account of my own early exposure to West Africa, I turn to the question of how and why Africa has long been a symbol of global inequality. Even after independence, Africans are still waiting from emancipation. Even so Africa’s development prospects in the twenty-first century are brighter than for a long time. In the course of the twentieth century, regional differences in the forms of African political economy converged on the model of agrarian civilization that was once known as the Old Regime. The antidote to the Old Regime is a liberal revolution. Accordingly I next consider the role played by free trade and protection in the revolutions that made modern France, the United States, Italy and Germany, with particular reference to the latter’s Zollverein (customs union) in the nineteenth century. Turning to the Southern African example, which includes the oldest extant customs union in the world, I examine the organization of international trade there. In conclusion I review the prospects for greater integration of trade regimes in Africa. Is an African customs union possible or desirable? How might it come about? Continue reading ‘The case for an African customs union’ »

Is it possible to institute a moral politics, moral law or moral economics that would help most people to humanise the impersonal social forces that govern their lives? This question does not come to us out of nowhere and certainly not just in the circumstances of the recent financial crisis. It concerns the possibility of legitimate government in capitalist states.

The genealogy of this problem begins with Locke and the liberal (bourgeois) revolution of the 18th century Enlightenment culminating in Kant. Locke sought a protected zone for private property free of interference by public agents (of the king). This led to the normative separation of public and private interests which was never actually achieved (as in the establishment of the Bank of England, a private institution, to nationalise the king’s war debts). This confusion was resolved in two ways: by the invention of ulititarian economics (Smith, Bentham) which reduced public outcomes to the interplay of private individual interests or by Kant’s attempt to discover the grounds for a cosmopolitan moral politics. State laws ended at territorial boundaries and geography generated endless cultural variations. So how could humanity make society in the world as a whole? His answer was the categorial imperative. We all want to be good or at least to be seen as being good. Cultures define the good differently, but the desire to be good makes a conversation across them possible. This project is still liberal, nourished by the American and French revolutions, plus the drive to abolish slavery. The liberal legacy emphasises personal responibility for ones actions, especially in common law traditions, where intention is key to legal culpability. Civil law traditions, as in Continental Europe, retain a strong division between law and right, lex and ius, loi et droit.

Continue reading ‘Responsibility in finance’ »

Ronald Coase won a Nobel prize in economics for inventing the idea of transaction costs in his famous paper “The nature of the firm” (1937). He has just announced his desire, with Ning Wang, to found a new journal called “Man and the economy”. Their manifesto, “Saving economics from the economists”, was published in the Harvard Business Review for December 2012. Coase argues 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. This separation of economics from the working economy has severely damaged both the business community and the academic discipline. “.

He continues, “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 diversities (sic). 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.”

This plea echoes a movement of economics students a decade ago, calling itself “post-autistic economics”, which later took the form of the real-world economics review. In addition, the legions of heterodox economists multiply and an interdisciplinary World Economics Association, formed in 2011, soon acquired over 10,000 members. So there is plenty of resistance within the profession to an economics whose dominant model is one of rational choice in “free” markets. From Coase’s summary and these other developments we may infer several priorities: to reconnect the study of the economy to the real world; to make its findings more accessible to the public; and to place economic analysis within a framework that embraces humanity as a whole, the world we live in. A century ago, Alfred Marshall defined economics as “both a study of wealth and a branch of the study of man” in his synthesis of the marginalist revolution, Principles of Economics (1890). Marshall was Keynes’ teacher at Cambridge, a cooperative socialist who also developed a Hegelian theory of the welfare state.

The “human economy” approach shares all these priorities. Our focus definitely draws inspiration from and seeks to contribute to the tradition of economic thought, but, more explicitly than the currents within economics described above, we are open to other traditions in the humanities and social sciences, notably anthropology, history and development studies. The Human Economy Program at the University of Pretoria has been shaped more directly by another movement of the last decade which now goes by the name of “alter-globalization”. It is the third phase of an international project that originated in the first World Social Forum held in Porto Alegre in 2001. The first phase (2002-2009) was a series of volumes in several languages, produced by a network of researchers and activists in Latin America and France, which aimed to introduce a wide audience to the core themes that might organize alternative approaches to the economy. These books, called Dictionary of the Other Economy, brought together short essays on the history of debate on particular topics and offered some practical applications of concepts relevant to building economic democracy. Taken together they pointed to a new language for addressing common problems of development. Continue reading ‘Manifesto for a human economy’ »

I am a fully paid-up member of the Karl Polanyi fan club. In the past few years I have published, with my collaborators, a collection of essays on the significance of The Great Transformation for understanding our times (Blanc 2011, Holmes 2012) and have made him a canonical figure for my versions of economic anthropology, the human economy and the history of money. I have also published two short biographical articles on him. I have contributed in this way to the recent outpouring of new work on Polanyi to which this book is a significant addition. I am a believer, but some believers also have doubts. I still have reservations about a Polanyian strategy for achieving economic democracy and these are linked to his historical vision of “market society”.  Theories are good for some things and not for others and, in my view, the plural economy would be best served by a plural approach to theory and politics. But first let me summarise what I most value personally in what I have learned from Polanyi.

Most anthropologists take their lead from the academic work done by Polanyi and his collaborators at Columbia University after the war. Trade and Market in the Early Empires (1957) established the “substantivist” school of anthropologists and historians who were committed to analysing the economies of “non-industrial” societies. I reject that division of economic anthropology’s subject matter and so did Polanyi when he wrote The Great Transformation (1944). I love his masterpiece for its vivid, erudite and passionate writing. It is truly a work of literature as well as being visionary. I know of few works of any kind with similar power to make such an impact on first-time readers. His discussion of money there is a source of endless inspiration for me and I have recently drawn on a late paper, “Money objects and money uses” (1964), to explain the collapse of the twentieth-century money system. Polanyi, with Georg Simmel, is the key figure for me in helping to explain the current world economic crisis. Polanyi sees money and markets as ways of extending societies beyond their local insularity, thereby introducing a permanent tension between their external and internal dimensions. If nature, humanity and society should not be treated as “fictitious commodities” (land, labour and capital), Polanyi implies that money is the most inclusive means of our social interdependence and must not be bought and sold like a sack of potatoes.

I have never found much use for Polanyi’s typology of modes of transaction as a set. But his vision of human economies as being articulated by a limited number of institutional forms found widely across human history is an essential part of how I think now. So too is his reminder that the social solidarity embodied in associational life is as vital for economic democracy as the interaction of states and markets. The concepts of “solidarity economy”, “plural economy” and “human economy” overlap considerably and find common inspiration in Polanyi’s work, possibly more than any other single author. This undoubtedly accounts for his current popularity at a time when many people around the world are seeking to move beyond the sterile contrast between “revolutionary” and “reformist” approaches to improving the economy.

The core of a “human economy” approach (Hart, Laville and Cattani 2010), in my view, is its emphasis not just on local institutional particulars or its humanism, reflecting what people concretely do, think and want wherever they live, but also on the need for an economic vision to bridge the gap between everyday life and humanity’s widest associations which are inevitably impersonal and lie beyond the actor’s point of view. It is urgently imperative (a “new human universal”) for all humanity to learn how to live together in world society. Polanyi, writing towards the end of what has been described as “the second thirty years war”, epitomises this idea in his masterpiece, where the word “human” crops up repeatedly in the context of economy. The question is how far opposition to large-scale bureaucracies, whether governments or business corporations, along with a preference for initiatives grounded in local social realities, can take us when our aspirations for economic democracy must somehow embrace the movement of the world we live in. And here Polanyi’s theoretical framework shares some deficiencies with other strands of the socialist tradition. Continue reading ‘The limits of Karl Polanyi’s anti-market approach in the struggle for economic democracy’ »