Article rejected by Archives Européennes de Sociologie, January 2006
My first systematic attempt to approach money as an object of anthropological enquiry was a Malinowski lecture given two decades ago (Hart 1986). Malinowski (1922) set a trend for anthropologists to dispute economic universals in polarized terms, juxtaposing exotic facts and western folk theories, without acknowledging the influence of contemporary history on their own ideas. My lecture had three parts which, taken together, constituted a method for rectifying this habit.
First, we should be more explicitly aware of the concrete conditions which stimulate our interest in some abstract problems rather than others. This means asking what it is in the world as we experience it that informs our researches, whether directly or indirectly. Second, it is no good taking potshots at vulgar reductions of economic ideas, when the intellectual history of western economic thought is itself extremely plural, even contradictory. A constructive reading of that intellectual history might have served Malinowski’s ethnographic analysis better than the straw man he chose to attack. Finally, when historical awareness and a more sophisticated intellectual apparatus are combined with our discipline’s standby of ethnographic fieldwork, the resulting anthropological analysis offers a more secure foundation for critical understanding of the world in which we live. (Hart 1986:637).
So I first located the problem of money in contemporary economic history, arguing that offshore banking, computerized barter and plastic credit cards were undermining state control of money in the leading capitalist societies. Then I traced two influential strands in the history of western monetary theory explaining money in terms of states and markets respectively as a token of authority or as a commodity. These strands came together in the writing of Keynes (1930), the most significant economist of the twentieth century. But economic policy has swung wildly between the two extremes, rather than acknowledge the interdependence of top-down and bottom-up social organization (‘heads and tails’). In the final section I showed that the token/commodity pair could inform an illuminating reanalysis of Malinowski’s Trobriand ethnography. The anthropological study of exchange in stateless societies adds an essential dimension to the search for effective understanding of the forces shaping our world.
Anthropologists have to be capable of comparing their exotica with a more profound picture of ideas and realities in the industrial world that sustains us. Conventional economic reasoning fails to enlighten us because it is so unremittingly one-dimensional. The coin has two sides for a good reason – both are indispensable. Money is at the same time an aspect of relations between persons and a thing detached from persons….Today’s effort is an act of bricolage rather than brokerage, formed from a vision of the anthropologist as a handyman who can help repair the damage done by professionals. (Ibid: 638-9).
This article, unsurprisingly, made no impact on the economists; but it has had a fair measure of success with the anthropologists (e.g. Parry and Bloch 1989; Foster 1999; Guyer 1995, 2004). Generally speaking, however, the latter have taken from my argument the application of its conceptual framework to a dynamic analysis of particular ethnographic settings, not the methodological recommendation to embrace contemporary world history and the theories of professional specialists outside our discipline. In other words, the academic division of labour still reigns supreme and most anthropologists prefer to stay on familiar ground rather than risk being exposed as naïve interlopers on territory made familiar through common journalism or already colonized by other experts.
Closed Systems and Open Minds (Gluckman 1964), a collaboration between an anthropologist and an economist, Max Gluckman and Eli Devons, remains the most coherent exploration of what they called ‘the limits of naivety’ in social anthropology (see also Bateson 1959, Rapport 2001). They argued there that anthropologists, given their discipline’s pretension to address humanity as a whole, are obliged to open themselves up to the full complexity of social reality. At some stage they must seek analytical closure in order to draw simple patterns from these open-ended inquiries and these abstractions may often seem to be naïve from the perspective of other disciplines. Gluckman and Devons had in mind the rich texture of ethnographic encounters that Geertz later identified with ‘thick description’ (Geertz 1973). What I was referring to is the need to be open to contemporary world history and to the intellectual history of relevant disciplines, even if the anthropologist’s summaries can easily be demonstrated to be naïve from some other specialist point of view. Specialization can be an obstacle to the growth of knowledge; for specialists become prisoners of their expertise (Popper 1997). I have in mind the cultivation of a certain intellectual freedom by anthropologists, a freedom from orthodoxy that can be invigorating for the more conventional sciences.
In The Order of Things, Foucault (1973, originally Les mots et les choses, 1966) ended his ‘archaeology of the human sciences’ with some reflections on why psychoanalysis and social anthropology (ethnologie) ‘…occupy a privileged position in our knowledge’:
…because, on the confines of all the branches of knowledge investigating man, they form a treasure-hoard of experiences and concepts, and above all a perpetual principle of dissatisfaction, of calling into question…what may seem, in other respects, to be established. (1973:373)
[They] are not so much two human sciences among others, but they span the entire domain of those sciences, they animate its whole surface, spread their concepts throughout it and are able to propound their methods of decipherment and their interpretations everywhere…[They] are ‘counter-sciences’; which does not mean that they are less ‘rational’ or ‘objective’ than the others, but that they flow in the opposite direction, that they lead them back to their epistemological basis, and that they ceaselessly ‘unmake’ that very man who is creating and re-creating his positivity in the human sciences. (Ibid:379)
Foucault attributed social anthropology’s originality to its being both ‘traditionally the knowledge we have of the peoples without histories’ and ‘situated in the dimension of historicity’, by which he meant ‘within the historical sovereignty of European thought and the relation that can bring it face to face with all other cultures as well as with itself’ (ibid:376-7). He wrote at a time when 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 object for our discipline, but also a theory and method appropriate to it. This means identifying the historicity of our own moment, as well as complementing ethnographic fieldwork with world history and humanist philosophy (Hart 1990, 2003a).
I propose that the object of anthropology should be the making of world society or the human universal. One name for this is ‘humanity’, at once a collective noun, a moral quality and a historical project for our species. Another is ‘the people’, whom contemporary ethnographers have studied assiduously in all their difference, but without much sense of what makes them the same. Anthropology’s object in the nineteenth century was world history, but this became discredited by its evolutionary racism. Before that, the liberal philosophers found speculation about humanity as a whole, what Kant named ‘anthropology’ (1798), indispensable to the making of democracy. How might these older traditions be reconciled with the fragmented cultural relativism of 20th century ethnography? We should not repudiate the revolutionary principle of joining the people where they live in order to find out what they think and do. This reflects the relatively new focus in politics on what matters to most people – the risk of losing their jobs, the interest rate for housing loans and the loss to families of soldiers killed on a foreign battlefield. Contemporary anthropologists have justly celebrated cultural variety in the here and now, but they have neglected longer term perspectives on human history and have privileged collective norms over the personal experience of individuals.
In addition to drawing eclectically on the whole sequence of dominant paradigms for anthropology to date, I would add for our century the existentialist or romantic quest for understanding how individuals can make sense of their relationship to the human predicament in general. Humanity is after all facing a highly uncertain future affecting all life on this planet; and we are increasingly aware that each of us is a unique personality with the chance to make a difference. Such a focus could be labeled ‘self in the world’ or ‘the subject in history’; and it should lead anthropologists to take a greater interest than before in biography, autobiography and fictional narrative.
Each of us embarks on a journey outward into the world and inward into the self. We are, as Durkheim (1912) said, at once collective and individual. Society is mysterious to us because we have lived in it and it now dwells inside us at a level that is not ordinarily visible from the perspective of everyday life. Writing is one way we try to bring the two into some mutual understanding that we can share with others. Ethnographic fieldwork, requiring us to participate in local society as we observe it, adds to our range of social experience and brings lived society into our sources of introspection. One method for understanding world society would then be to make an ongoing practice of trying to synthesize these varied experiences. This is to some extent what I attempted in The Memory Bank (Hart 2000).
I wrote this (republished as Money in an Unequal World) towards the end of the liberating 90s and I asked what future generations would consider distinctive of our times. I came up with the digital revolution in communications, manifested as the rise of the internet in that decade. The half-century begun by the anti-colonial revolution had seen the formation of world society as a single interactive network. My question was how the digital revolution was affecting the forms of money and exchange. I concluded that the impersonal conditions of personal economic agency were shifting in profound ways (also the theme of Hart 2005).
I had previously written a draft of a text-book showing how anthropologists can and do address the economic institutions of modern society, both in the capitalist heartlands and the post-colonial states. But I rejected this effort because it was too impersonal. I could not identify myself in it. I based the successor volume on personal memory – of my own teaching and research over three decades and especially on my own encounters with the economy as a gambler, journalist, consultant, publisher and academic entrepreneur. The idea of a memory bank comes from computing; but banks are also where money is kept. I came to see our time as one in which the great memory banks, language and money, were converging as information in the internet; and of course the book itself was my memory bank. Soon afterwards I developed a website for the diffusion of this and other texts under the same name (www.thememorybank.co.uk).
For much of my professional life, I have shadowed the African diaspora through an Atlantic world whose defining moment was slavery (Hart 2003b). I can place myself imaginatively at different points in this journey by an act of the imagination, a process I think of as ‘cubist’. Caribbean people, whose history of movement never allowed them to view the world from one place, developed this capacity without the benefit of anthropology as a guide.
There are as many worlds as there are individuals and their journeys. This could be our starting point; but it will not do for the study of world society. For this we need to enter the objective world of money, markets, digital communications, ecology, cities, population statistics, trading blocs, nation-states, corporations and networks, all the while risking exposure of our professional naivety. Making a better society also means using the imagination for purposes of fiction, the construction of possible worlds out of actual experience. Thinking about the macrocosm is made easier through contemplation of microcosms. Novels and movies compress the world into a narrow format that we enter subjectively on our own terms, allowing us to make a meaningful connection with history. In the past, human universals have sought to extinguish or dominate the cultural particulars through which human beings live. The principle of the new universal is, I believe, already revealed to us in great literature. It is that human universals must not just tolerate cultural particulars, but can only be realized through them. Thus, the most creative writers reach general truths by digging deeply into particular places and personalities. So too must we.
The success of British social anthropology in the interwar period derived from the unity of its object, theory and method (Hart 2004). The object was ‘primitive societies’, far-flung peoples of the empire encountered in the here and now. The theory was ‘functionalism’, the idea that customary practices, however bizarre, make sense and fit together, since daily life would be impossible otherwise. And the method, as their successors repeat in an unchanging mantra, was ‘fieldwork-based ethnography’, joining people where they live to find out what they do and think, then writing it up in universities back home. Even if I consider that anthropology has one ultimate object (to study and enable world society), I do not believe that one theory or method is adequate to the task. I have been compelled to make a virtue of being methodologically and theoretically eclectic. Like my contemporaries in the British school, I have been drawn into the long struggle to reinvent the discipline of our training in the face of post-colonial realities.
2. The anthropology of money: some thematic guidelines
This section is divided into four sub-sections as follows:
Money as memory, a meaningful link between persons and communities
Money as idea and object: the rise of virtual economy
Money as ‘heads & tails’, the impersonal expression of states and markets
Money as what people use it for: the potential for economic democracy
I continue in part 3 with reflections on the long historical process of social abstraction that I first approached in ‘On commoditization’ (Hart 1982), an explicit attempt to bring Marx’s analysis of ‘commodities’ in Capital (1867) up to date. Then, in Part 4, I assess the euro in the light of these three sections, asking whether it offers something new in the way of money or rather looks more to the past than the future.
(a) The meaning of money
The word money comes from Moneta, whose temple in Rome was their mint. Most European languages retain ‘money’ for coinage (French monnaie), using another word for money in general, such as silver, cattle or payment. Moneta was the goddess of memory and mother of the Muses. Her name was derived from the Latin verb moneo whose first meaning is ‘to remind, bring to one’s recollection’. For the Romans, money was an instrument of collective memory that needed divine protection, like the arts. It was both a memento of the past and a sign of the future.
Money’s prime function could thus be said to help us keep track of those exchanges we wish to calculate. But a lot more circulates by means of money than what it buys. Money conveys meanings and these tell us a lot about the way human beings make communities. Money expresses both individual desires and the way we belong to each other. In this it resembles language, the other great means of communication. How do meanings come to be shared and memory to transcend the minutiae of personal experience? Memory was central to Locke’s philosophy of money (Caffentzis 1989:53ff.). For him property belonged to a person who made it his own by performing labour on what nature gave humanity in common. But for a claim on property to endure, that person has to remain the same; and this depends on memory. So money expands our capacity to stabilize personal identity by holding something that embodies the desires and wealth of all members of society.
Communities exist by virtue of their members’ ability to exchange meanings that are substantially shared between them. People must understand each other for practical purposes. And that is why communities operate through culture (meanings held in common). Money is an important vehicle for this collective sharing as well as for the differentiation of individuals.
Communities operate through implicit rules (customs) rather than state-made laws. In the 19th century, few believed that the state, an archaic institution of agrarian civilization, could govern the restless energies of urban commercial society. Accordingly, ‘primitive’ communities were studied to throw light on the task of building modern societies along democratic lines. After the first world war, the modern state came to be seen as inevitable and small-scale alternatives were irrelevant. But now large states are in disarray. The word is out for devolution to less rigidly organized ‘communities’. Market networks seem to offer more direct access to the world at large. Cheap information allows relations at distance to be made more personal. So we have to rethink how societies can best be organized for their development.
The meaning of money is that each of us makes it, separately and together. It is a symbol of our individual relationship to the community. This relationship may be conceived of much as in existing states — as a durable ground on which to stand, anchoring identity in a collective memory whose concrete symbol is money. Or it may be viewed as a more creative process, allowing each of us to generate personal credit linking us to multiple forms of association. But few are yet ready to accept that society rests on nothing more solid than our transient exchanges.
(b) Money as idea and object
Keynes held, against the myth that has money evolving from the barter of commodities by savages, that states invented money. In A Treatise on Money (1930), he distinguished how purchasing power is expressed (‘money-of-account’) from what the currency that is actually held (‘money-proper’, what Dodd (2005) calls ‘the monetary medium’). These are money’s insubstantial and substantial forms, respectively. It was thus always both an idea and an object; we might say, virtual and real.
Money as a convenient means of exchange on the spot seemed to Keynes less important than the emergence of a money standard named by law. Moreover, the acknowledgment of private debts (‘bank money’) has long been used in the settlement of transactions expressed through the money of account.
Modern state money is currency of little or no worth is offered to a people by its government in payment for real goods and services, as the sole legal means of exchange within the territory and with the obligation to pay taxes on all transactions using it. Central banks jealously guard the national monopoly, policing the banks who actually issue most of the money. Most currencies today are a hybrid between commodity-money (based on gold for example) and fiat-money (paper money).
From the beginning, states and markets were symbiotic. Rulers needed the revenues from taxation of trade and some imported commodities as symbols of power; merchants needed the protection of law and the establishment of a public standard. Each rest on an individualized concept of society: the state was society centralized as a single agency and the market rested on private property in commodities and money. Each excluded the possibility of society being conceived of as people belonging to particular communities.
(c) Heads or tails?
The coin has two sides (Hart 1986; 2000:245-256). One contains a symbol of political authority (heads); the other tells us what it is worth, its quantitative value in exchange for other commodities (tails). The two sides are related to each other as top to bottom. One carries the virtual authority of the state; it is a token of society, the money of account. The other says that money proper is itself a commodity, lending precision to trade; it is a real thing.
Victorian civilization based its market economy on money as a commodity, gold. For much of the 20th century, under Keynes’s influence, political management of money was normal. Now there is talk again of ‘the markets’ reigning supreme and of states losing control over national currencies in a process of globalization. Yet the evidence of our coinage is that states and markets are or were each indispensable to money. What states and markets share is a commitment to founding the economy on impersonal money. If you drop the coin and someone else picks it up, they can do exactly the same as you with it. This absence of personal information from the currency is what recommends cash to people who prefer their transactions to be invisible. But economic democracy is more likely if people participate in exchange as themselves, not just as the anonymous bearers of cash.
What if money came from the people instead? The German romantic, Adam Müller (1816) thought money expressed the accumulated customs of a nation (Volk); while Simmel (1900) and (Mauss 1925) conceived of money as an expression of trust within civil society, locating value in personal management of credit and debt. In the age of digital communications, other possibilities present themselves. If money is a way of keeping track of what people do with each other, it is above all information, a measure of transactions. Money should not be left to the death struggle of the disembodied twins, states and markets. It might even become more meaningful than it has been of late.
(d) People’s money
The bureaucratic power of states rests on coercion. Revenue collection, both public and private, depends on the authorities being able to force people to pay through the threat of punishment; and territorial monopoly is indispensable to both. This, for all their conflicts of interest, underlies the continuing alliance between large corporations and national governments. The issue is whether borderless trade at the speed of light will permit governments and corporations still to compel payment of their dues. This is the subject of my latest long essay, The Hit Man’s Dilemma (2005) in the context of contemporary conflicts over intellectual property.
How might public economies be organized without effective means of coercing payment? Some Swiss cantons have recently released their stock exchanges from government supervision, because they could not make good the threat to punish offenders. The exchanges were asked to draw up their own rules with the only sanction that of excluding transgressors. This is likely to become much more widespread with the erosion of territorial power. People will then have to turn to their own forms of association and to more informal means of regulation. We can participate, on our own terms, in many forms of money and in the circuits of exchange corresponding to them.
Modern bureaucracy, as embodied in law, markets and science, has undermined the meaningful attachment of persons to the social order of which they are a part. It follows that, when bureaucracy fails, the means of personal connection will have to be reinvented. There are many antecedents for building communities on the basis of individual members’ moral and religious commitment. The growth of NGOs financed by charitable donations supports this point. Mauss (1925) was far-sighted when he traced the origin of the modern economy to the gift, rather than to barter of conventional wisdom.
Mauss’s emphasis is consistent with the idea of money as personal credit, linked less to the history of state coinage than to the acknowledgement of private debt. Our need to keep track of proliferating connections with others is mediated by money as a means of collective memory. People will increasingly enter circuits of exchange based on special currencies. At the other extreme, we participate as individuals in global markets of infinite scope, using international moneys of account (such as the euro), electronic payment systems of various sorts or even direct barter via the internet.
In many ways, it is a world whose plurality of association, even fragmentation, will resemble feudalism more than the Roman empire. In such a world, one currency cannot possibly meet all the needs of a diversified region’s inhabitants. The shift to ever more intangible versions of currency — from metals to paper to bits — has exposed the limitations of central bank monopolies. In response, people have already started generating their own money in the form of a variety of community currencies often using sophisticated electronic payment systems.
We should also note in conclusion that, even when they don’t issue their own money instruments, people do make their own social uses of it. This line is associated most prominently with the sociologist, Zelizer (1994; 2005), who argues that monetary flows are best approached through understanding the social practices of ordinary people. An anthropology of money would be bound to take this perspective into account. Much as economic democracy, however, might be said to have its origin in such practices, my concerns here have been mainly with the prospects for people to make money rather than take it for their own ends.
3. Commoditization: the dialectics of social abstraction
Although it may not be immediately obvious, this exercise rests heavily on Marx’s (1867) analysis of the historical relationship between people, machines and money in Capital. People ought to control machines and through them the money, to be distributed in the general interest; but in fact it is the other way round — the money controls the machines and the people, with unequal and often socially disastrous results. Our political task is to reverse this situation. His book was intended to be a means to that end and he began it with the famous chapter on ‘commodities’ which deserves our close attention, especially the opening pages of Section 1: ‘The two factors of a commodity: use-value and value (the substance of value and the magnitude of value)’.
A commodity is, in the first place, an object outside us, a thing that by its properties satisfies human wants of some sort or another….Every useful thing may be looked at from the two points of view of quality and quantity….Use values become a reality only by use or consumption: they also constitute the substance of all wealth, whatever its social form. In this society, they are, in addition, the material depositories of exchange-value. Exchange value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use of some sort are exchanged for those of another sort, a relation constantly changing with time and place. Hence exchange-value appears to be something accidental and purely relative, and consequently an intrinsic value, i.e. an exchange-value that is inherent in commodities, seems a contradiction in terms… First: the valid exchange-values of a given commodity express something equal; secondly, exchange-value generally is only the mode of expression, the phenomenal form, of something contained in it, yet distinguishable from it…The exchange values of commodities must be capable of being expressed in terms of something common to them all, of which thing they represent a greater or less quantity….The exchange of commodities is evidently an act characterized by a total abstraction from use-value (my italics). .. As use-values, commodities are, above all, of different qualities, but as exchange-values they are merely different quantities, and consequently do not contain an atom of use-value. If then we leave out of consideration the use-value of commodities, they have only one common property left, that of being products of labour. If we make abstraction from the material elements and shapes that make the product a use-value,…we put out of sight the useful character of the various kinds of labour embodied in them; …all are reduced to one and the same sort of labour, human labour in the abstract…It consists of the same unsubstantial reality in each, a mere congelation of homogeneous human labour…When looked at as crystals of this social substance, common to them all, (commodities) are – Values. The total labour-power of society counts here as one homogeneous mass of human labour-power, composed though it be of innumerable individual units…That which determines the magnitude of the value of any article is …the labour-time socially necessary for its production. A thing can be a use-value without having value. This is the case whenever its utility to man is not due to labour. A thing can be useful and the product of useful labour without being a commodity. Whoever directly satisfies his wants with the produce of his own labour, creates indeed use-values, but not commodities. In order to produce the latter, he must not only produce use-values, but use-values for others, social use-values. (And not only for others…[payments in kind as rent are not commodities]. To become a commodity a product must be transferred to another, whom it will serve as a use-value, by means of an exchange.) Lastly, nothing can have value without being an object of utility. If the thing is useless, so is the labour contained in it. (Marx 1970:35-41)
From this I take the following features to be intrinsic to Marx’s definition of the commodity: it is a useful product of labour which, by a social means of abstraction, is endowed with value in exchange. In my essay ‘on commoditization’, I sought to improve on this definition in two ways, first by making the process involved more explicitly a historical dialectic and then updating it in the light of developments since Marx’s time, especially in recent decades. I recast the commodity as a process, ‘commoditization’, defined as “the progressive abstraction of social labour” (Hart 1982:40). The word ‘labour’ is heavy and anachronistic. What I meant was that, in order for us to do things for each other in society, the services we perform have to be detached from what we do for ourselves within the confines of whatever small groups we live in. This is a process of abstraction which draws us into ever-widening circles of interdependence, the most inclusive of which are defined by calculated exchange. At each stage in this process it is possible to identify what the commodity is in part by contrast with what it is not.
The commodity is progressively (but not necessarily in a historical sequence):
Some useful thing external to the producer;
Made social by becoming available to outsiders;
Specialisation extends exchange to an inter-community level;
Sometimes persons circulate, not things (e.g. marriage exchange);
Products of socially divided labour are circulated by means of gift-exchange, barter or payments of rent;
This may be elaborated as markets, exchange at negotiated rates, not the gift;
Then special- and general-purpose monies enter into the circuit of exchange;
Money is the commodity crystallized as pure exchange value (Marx);
Now money can take the form of capital to make profit;
Eventually ‘industrial capital’ employs human labour, as opposed to finance and merchant capital;
Passing beyond Marx’s time, services come to outweigh goods in the world market (things are replaced by what people do for each other);
Now commodities have become ideas and work for society is recognized by a wholly abstract cipher, money as information flying in bits around cyberspace;
The world market for money is dominated by derivatives – secondary contracts that gamble on the future prices of commodities that are actually bought and sold;
But people still do many things for themselves; make gifts; some transactions use old-fashioned cash; computers have allowed barter to make a comeback etc.
This is, of course, a bourgeois just-so story; but it is based on Marx’s and it does illuminate a basic trend that he predicted, the apotheosis of capital as money being exchanged for money in a pure form detached from what people do. It is consistent with Mauss’s (1925) argument that gift-exchange and market contracts rest on a shared logic of reciprocity; but not with the opposition between ‘gift economies’ and ‘commodity economies’ that animates so much anthropological discussion these days, taking the contrast from Gregory (1982) who has since repudiated it (1997: chapter 2).
It is interesting that, in a section of his introduction to Grundrisse, ‘The method of political economy’ (1973 :100-108), Marx states that we must start from the concrete conditions of our moment in history and then draw some analytical abstractions from them. For some the whole aim of the exercise is to achieve abstract ideas (he falsely accuses Hegel of this: see James 1980); but Marx insists that the point is to insert these simplified abstractions back into their concrete starting-point. Yet he opens Capital with this wholly abstract discourse on ‘commodities’ and the three volumes never get to where he was aiming for in Grundrisse, ‘the world market and its crises’.
Both Marx (1867) and Simmel, in The Philosophy of Money (1900: chapter 6), noticed that social abstraction through capitalist markets seemed to go along with intellectual abstraction as philosophy and science in cases such as ancient Athens, Renaissance Florence, England in the 17th century and, we might say, the USA in the 20th. But we should not lose sight of the dialectics involved. The commodity remains something useful and in that use lies its concrete realization. Marx refers early on to a ‘commercial knowledge of commodities’ (we might say ‘salesmanship’ or ‘advertising’) that manipulates their use in consumption under the fiction that ‘everyone as a buyer possesses an encyclopedic knowledge of commodities’ (1970:36 and note). The reality is the mutual determination of the abstract and the concrete and our method has somehow to reproduce that.
Trade in commodities and money as information is linked to more people being able to do things with and for each other of increasing specificity and at great distances. In other words, we rely on the products of abstraction to engage with others in highly concrete ways. This can provoke considerable anxiety, when we don’t understand the machines we rely on; but it also supports rewarding interactions at distance that were unimaginable a short time ago. Thus I have a service contract for my website with a firm in Bangalore. I can talk to the webmaster there by internet telephone, while he shows me various design possibilities through our browsers– all in real time and at no cost. It is getting close to what we could do to if we were in the same room together, except that two communicating machines have more potential than me leaning over his shoulder while he works on one machine.
The digital revolution in communications is as radical a change as any in human history, comparable to the invention of agriculture. The internet went public only a dozen years ago and the basic technologies were invented in the mid-20th century. We are like the first digging-stick operators who stumbled into a revolution whose culmination thousands of years later in Chinese agrarian civilization was unimaginable to them. This discussion of ‘commoditization’ is one way of trying to think about the direction of movement in contemporary events.
4. A case study: the euro
I have chosen to insert these abstractions, or some of them, into the concrete history of the euro. At this stage the exercise is merely indicative, since this paper is more about intellectual strategy than any particular application. There are grounds, however, for taking this example as a central phenomenon of the contemporary monetary scene. It is not only linked directly to my own social circumstances, since I am a citizen of Britain (which has so far rejected it) and a resident of France (which has adopted it). It is one of two principal examples (the other being the US dollar) of what Dodd (2005) calls the ‘homogenization’ of money in recent times, the tendency for currencies to become more alike and in some cases for national currencies to take shelter with a stronger one of global scope. It is also a very recent experiment which has already gone through some remarkable shifts, losing 20% of its value against the dollar when it was only a virtual currency (money of account), regaining more than that after its launch as notes and coins (monetary medium), only to slide back in 2005.
The European Union is the most dynamic political experiment in the world right now, with its rapid enlargement being associated with increasing debate over economic policy. The French and Dutch rejection of the new constitution this year showed that many people are concerned that European governance is too remote, perhaps elitist and too bureaucratic. I have long been committed to the project of European unification as an antidote to backward-looking nationalisms; but I share some of these views and would like to see the process made more flexible and democratic, a Europe of the cities and regions more than of one of nation-states. The ‘no’ votes opened up more sharply than before the issue of Europe’s ‘social model’ and its accommodation of the neo-liberal world economy. The monetary union conceived of in the Maastricht treaty was a factor, especially in the Netherlands which had exchanged the second strongest currency in Europe for a euro that had imported inflation, some of it due to overspending by the German and French governments to prop up their own weak economies. Italians, faced with Asian competition for their manufactures and escalating economic mismanagement, have begun to express nostalgia for the old technique of lira devaluation that is now denied them.
As Europe and America have developed widening foreign policy differences since the end of the Cold War, there is much public discussion of the strengths and weaknesses of the economic models allegedly pursued by each. The most aggressive market liberals see only decadence in Europe and a euro that is a dead duck before it has even got started. Some US radicals, on the other hand, have a euro conspiracy theory for the Iraq war, claiming that Bush invaded because Saddam was switching his oil money into euros, thereby undermining the global hegemony of the dollar. In the meantime, no-one knows how long Japan and China will finance the US trade and budget deficits nor what will happen to the world economy if they pull out. And the rise of Brazil, China and India as the cheapest producers of agriculture, manufactures and information service respectively is the biggest shift in global capitalism since the USA and Germany challenged Britain’s commercial ascendancy a century ago. At the very least, by focusing on the euro, we can simplify this bewildering situation. And that is after all one of money’s principal functions. So is the euro a new form of money and what difference has it made in those countries that have adopted it so far?
An editorial in Libération, of 1st January 2002, celebrated the euro as a revival of the spirit of the Roman empire under the heading ‘Rubicon’:
La marche de César sur Rome fut l’acte fondateur d’une Pax romana qui étendit son empire plusieurs siècles durant d’un bout à l’autre de l’Europe, garantissant au continent prospérité et civilisation. Les Européens n’ont jamais tout à fait perdu le souvenir de cet âge d’or….L’euro, véritable icône de l’Union européenne, est une nouvelle réincarnation de l’éternel projet d’unité d’un vieux continent hanté par sa longue histoire de conflits sanglants… (p. 3)
Moneta returns to claim her cultural legacy and a newspaper of the left temporarily abandons its republicanism to invoke the idea of empire. If money is memory, then the euro provokes very long memories indeed, as well as a degree of amnesia. Whatever we may think of Rome’s political system, the promise of overcoming the fragmentation of European sovereignty inherited from feudalism is indeed the huge symbolic prize conferred by monetary union. The European Union is a community, not a state; and its founding principle of subsidiarity ensures that there is room for many levels of community underneath. Ironically, by suppressing their own national currencies, some EU countries may encourage the formation of parallel exchange circuits, employing virtual deutschmarks or francs as community currencies. There is a good deal to be said for European unity in the face of the world economy today; but there is bound to be scope for less inclusive monetary instruments to complement the euro, just as French or Parisian identity is hardly erased by a currency that crosses borders in Europe.
Having mentioned the collective memory invoked by the euro, has it made any difference to the personal memory of individual Europeans? Their travels between member countries have been simplified, but not much else has changed. In most respects the system of banking remains the same and this reflects the conservatism of Maastricht and the European central bank it eventually created.
The technical form of money is becoming ever more insubstantial — from precious metals to paper notes to ledger entries to electronic digits. In the process money is revealed as pure information and its function as an accounting device (money of account) takes precedence over its form as circulating objects (the monetary medium). The euro began life, for two years, in a wholly virtual form, as money of account, without an objective existence as currency. Its loss of value against the US dollar in this period reflected global financial markets driven by exchange of derivative instruments based in all sorts of imagined ways from assets with a monetary value, including money itself. Since money futures markets were invented in 1975, international exchanges of money have passed from being 99% used to pay for traded goods and services to being 99% money exchanged for money in any form. In this way the money circuit, sometimes known only as ‘the markets’ has become almost wholly detached from real production and trade.
This gave the arrival of the euro notes and coins in January 2000 a tangible objectivity in a world of runaway intangibles. The banks of course still create over 90% of all euros in the form of paper loans (or more often as bits in cyberspace), but the actual currency seemed above all to be a symbol of a new political era. Some people were reported to have used their starter kits to make a display on the living room table. Almost all suppliers took advantage of the switch to round prices upwards. Apart from this, given that the participating national currencies had been linked together within EMU for a decade or more, the euro seems to have made little difference to people’s experience of money either as an idea or as an object.
What about heads or tails? Has the euro altered the balance between states and markets on which so much of twentieth century economic history hinged? The euro may not be a national currency, but it does aim to be federal, like the dollar, and the twelve participating countries represent in effect a league of states. Joining a larger currency bloc is a way of trying to cope with ‘the markets’ — the global tide of virtual money which threatens to swamp the independence of national economies. But the euro is still a form of state money and its management is likely to be even less democratically accountable to the public than its national precursors. The euro is in principle a throwback to the Bretton Woods era of fixed parity exchange rates, at least for the participating countries, and it does not take much imagination to figure out that some parts of the European economy will suffer from its rigidity. At least the euro coins have generally dispensed with the heads of rulers.
The economic destiny of 300 million Europeans is now tied to the fortunes of a single currency whose management cannot possibly meet their varied needs and interests. If government of modern societies from a fixed central point has always been anomalous, this is even more likely to be true of Europe in the near future. Its constituent states will come under pressure from their own people for more flexible instruments of economic management. The euro cannot do the job all by itself. National monopolies of money have in any case only been around since the 1850s. Now would be a good time to recognize the need for a variety of monetary instruments, for as many in fact as our communities.
Is the euro a step towards money that genuinely reflects the interests of people in general? The technical forms of currency are relatively insignificant — notes, coins, cheques, ledgers, plastic, digits — and the euro embraces them all. The most important forms concern the money of account and, after several thousand years of state money linked to markets for scarce commodities, it will take some effort to embrace another form, people’s money. Territorial states are an anachronism today. Digitization encourages a growing separation between society and landed power. The euro involves only a limited break with the territorial principle. Its logic is still that of a central bank monopoly within an expanded territory. The best that can be said for it is that the national governments of Euroland are likely to be more constrained in their ability to raise taxes beyond the norm for the region. And of course, travellers throughout Europe will be less subject than before to usurious exchange rates. But against this, the management of the European economy from a single fixed point will impose costs on regions ill-suited by the common monetary policy. And it is still the case that people will finance governments and the banks through the imposition of a monopoly currency as sole legal tender.
There are other democratic possibilities. We can make our own money rather than pay for the privilege of receiving it from our rulers (Hart 2006). Already social experiments involving community currencies are breaking new ground, thanks to the possibilities inherent in the new information technologies. The next chapter of monetary history will be written by new approaches addressing the parts that the euro alone cannot reach. But the euro itself will probably be with us, well, for as long as European people think of themselves as a community for some purposes. Meanwhile its movement through our turbulent world offers us a glimpse of where human society is heading – perhaps to a totalitarian and fragmented future, but just possibly towards greater economic democracy and human unity.
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1 Hart (2002) was a short exploratory version of this paper. I refer here throughout to ‘anthropology’, but much of the argument could apply to ‘sociology’, as conceived of in the French tradition of Durkheim and Mauss.