<nettime> money is always personal and impersonal

[Keith Hart <keith@thememorybank.co.uk>]

Apologies for inflicting yet another rumination on this topic to the 
list. I just wonder if I am making progress with my idee fixe.

Keith


Money is always personal and impersonal

/Money, society, religion/

Money is often portrayed as a lifeless object separated from persons,
whereas in fact it is a creation of human beings, imbued with the
collective spirit of the living and the dead.

Money, as a token of society, must be impersonal in order to connect
each individual to the universe of relations to which they belong. The
economists capture this aspect of money in their abstract models of
universal exchange. But people make everything personal, especially
their relations with the conditions of their collective existence.
Anthropologists and sociologists are sensitive to the meaning of money
in the context of people?s everyday lives. The unity of this two-sided
relationship is universal, but its incidence is highly variable,
providing a thread for the study of human history as a whole and in
all its diversity.

The ways we combine the personal and impersonal aspects of money
have much in common with religion. Religion /binds/ each of us to an
external force, lending stability to our meaningful interaction with
the world and providing an anchor for our volatility. What we know
intimately are our own everyday lives, the mundane features of our
personal routines; but these lives are subject to larger forces whose
origins we do not know ? natural disasters, social revolutions and
death. We recognize these unknown causes of our fate to be at once
individual and collective; and religion is the organized attempt to
bridge the gap between the known and the unknown, between the world
of ordinary experience and an extraordinary world that lies beyond
it. Emile Durkheim held that what is ultimately unknown to us is
our collective being in society. The chaos of everyday life thus
attains a measure of order to the extent that it is informed by ideas
representing the social facts of a shared existence. Humanity?s task
today is to assume responsibility for life as a whole on this planet
and religion is indispensable to that end.

Given the obscene inequality and destructiveness of a world society
whose driving force is capitalism, it is not surprising that many
consider the system of money today to be the opposite of religious
or at least to constitute a false religion whose priests are the
economists. Indeed religion itself has a fairly murderous reputation.
But markets and money are essential, indeed universal means of
connecting the everyday life of each individual to the widest horizons
of our collective existence. They form a field of social experience
where the personal and the impersonal, the inside and the outside, the
known and the unknown inevitably are joined, requiring us to devise
effective ways of bringing them together as a meaningful whole. This
may ? probably should ? entail making a break with the organization
of money as we know it. But it will do us no good to repudiate money
or markets as such, since they are central to human civilization,
past, present and future. I attribute this position to Marcel Mauss,
Durkheim?s nephew and collaborator. It is well-known that Mauss
considered /The Gift/ to embody personal, social and spiritual ties
in economic life; but he also aimed to show how impersonal money and
markets already contain these qualities and might, with appropriate
social engineering, develop them more fully.

/Mauss on money and markets/

Malinowski says in the /Economic Journal/ (1923), ?/Currency/ as a
rule means a medium of exchange and standard of value, and none of the
Massim valuables fulfill these functions?. But Mauss replies,

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.

He argues rather that valuables used in archaic exchange are like
money in that they ?...have purchasing power, and this power has a
figure set on it.?. He also takes Malinowski to task for reproducing
in his typology of transactions the ideological opposition between
commercial self-interest and the free gift.

Durkheim, in seeking to refute the utilitarian individualism of
English economics, claimed that this approach obscured the social
glue of ?the non-contractual element in the contract? which made
the economy possible ? a combination of law, state, customs,
morality and shared history that it was the sociologist?s task
to make more visible. Mauss later had to take a position on the
Bolshevik revolution and its aftermath. He was highly critical of the
Bolsheviks? coercive resort to violence, especially against the most
active classes, and of their destruction of the market economy along
with confidence and good will. He advocated an ?economic movement from
below?, in the form of syndicalism, co-operation and mutual insurance.
His greatest hopes were for a consumer democracy driven by the
co-operative movement. He even enjoyed a brief period as a financial
commentator on the exchange rate crisis of 1922 and argued that
?economic revolutions are always monetary?. This economic movement
from below was for him a secular version of what can be found in the
religions of archaic societies, as well as in the central phenomena of
exchange described in /The Gift/. They are all ?total social facts?,
in the sense that they bring into play the whole of society and all
its institutions ? legal, economic, religious and aesthetic.

Against the contemporary move to replace markets with authoritarian
states, Mauss insisted that the complex interplay between individual
freedom and social obligation is synonymous with the human condition
and that markets and money are universal, if not in their current
impersonal form, because they give vent to this interplay. He
concluded that the attempt to create a free market for private
contracts is utopian and just as unrealizable as its antithesis, a
collective based solely on altruism. Human institutions everywhere
are founded on the unity of individual and society, freedom and
obligation, self-interest and concern for others. Modern capitalism
rests on an unsustainable attachment to one of these poles and it will
take a social revolution to restore a humane balance.

Perhaps the chief message of /The Gift/ concerns method. We must
follow the example of the historians and observe what is given, rather
than split up social phenomena into separate abstractions. The reality
is always a concrete person acting in society ? ?the middle-class
Frenchman, the Melanesian of this or that island?. Then sociologists
and anthropologists will furnish psychologists with material they can
use, while maintaining their distinctive pursuit of the social whole
and of group behavior as a whole. This is Marcel Mauss?s manifesto for
how he will carry forward his uncle?s academic legacy.

/Impersonal money and its critics/

So where did impersonal money and markets come from and how impersonal
are they? Money was traditionally impersonal so that it could retain
its value when it moved between people who might not even know each
other. If you drop a coin or banknote on the floor, whoever picks it
up can spend it just as easily as you can. Money in this form is an
instrument detached from the person who uses it. The expansion of
trade often depended on this objectivity of the medium of exchange and
economists have long debated whether money?s value derives from its
being a scarce commodity or from the guarantees made by states who
issued it. Bank credit on the other hand has always been more directly
personal, being linked to the trustworthiness of individuals and, in
the case of paper instruments such as cheques, issued by them. The
idea that transactions involving money are essentially amoral comes
from its impersonal form, but until recently, in most societies, the
bulk of economic life was carried out by people who knew each other
and were able to discriminate between individuals on the basis of
experience.

Keynes held that modern money was as old as the invention of cities
and, with them, the state, that is to say, as old as agrarian
civilization. Bank money is almost as ancient, but it took on renewed
significance for western economic history in the Renaissance. Modern
national currencies are the result of a merger of state and banking
systems, leading some authors, especially French, to stress the
importance of sovereignty in the making of impersonal money.

This strand of thinking is very much in a minority today, when the
market model of an eighteenth century revolution in political economy
holds undisputed sway, especially in the English-speaking world.
In liberal ideology, money is a commodity just like any other; its
payment in exchange releases buyer and seller from the need for any
ongoing relationship, allowing both the money and what it buys to be
separated from their owners as private property. The parties to the
exchange are conceived of as individuals devoid of social or cultural
ties. The origin of such markets is said to lie in the ?natural
economy? of primitive barter, where the only thing missing is the
money, which appears later to make good the inefficiencies of the
older system. The impersonality of money and of the transactions it
facilitates is here derived not from a universal sovereign, but from
the anonymity of homogeneous individuals meeting in the marketplace,
with price resolving their superficial differences. The value of
commodities is traced to a common origin in human labour. This is less
a description or analysis of money and markets than an ideological
programme for displacing states from their central position in
the economy, a programme that was later reversed in the alliance
between states and corporations that spawned what I call ?national
capitalism?.

Mainstream economics has always had its critics, led by Karl Polanyi
who, in /The Great Transformation/, developed a line of attack on
liberal capitalism and the economists that proved to be remarkably
durable. For him, impersonal markets and money have only recently
displaced more humane institutional arrangements from the social
organization of economy. These were society?s way of ensuring material
provisioning for its members and they subjected exchange to moral,
i.e. personal considerations. The self-regulating market dehumanized
exchange. This would be bad enough if it were limited to what people
make, like hats and shoes; but the market principle was extended
to the conditions of our collective existence and these are not
consciously made by human beings ? Nature, Society (in the form of
Money) and Humanity, reduced to the ?fictitious commodities? of
land, capital and labour. Impersonal markets thus threatened human
survival itself and inevitably provoked a social reaction in the form
of people?s numerous attempts to restore a measure of personal and
collective control over their lives.

Polanyi drew on the examples of ancient Greece and pre-colonial West
Africa to show the historical limits of /homo economicus/. In both
cases, marketplaces were peripheral and relations within them were
social and personal. Money was largely restricted to ?special-purpose?
forms, with ?general-purpose money? being associated with the European
powers. His approach has subsequently come to be identified with the
claim that the economy in non-industrial societies is ?embedded?
in social institutions and that ?the great transformation? of the
nineteenth century consisted in the self-regulating market becoming
?disembedded? from society. The idea of ?embeddedness? has become
the calling sign of all those, especially economic sociologists, who
reject the impersonal model of money and markets offered by mainstream
economics.

Chief of these is Viviana Zelizer, whose /The Social Meaning of
Money/ takes the fight to the core of contemporary capitalism, the
United States, at a time when the dollar?s national monopoly was
being forged, the decades following the Civil War. Zelizer shows that
the achievement of centralized control over money had to overcome
a plethora of institutional alternatives and sustained political
resistance. Moreover, even when the idea of a single currency had
been more or less accepted, American commerce still spawned parallel
currencies in the form of trading tokens and the like, as a way of
dividing the market through particularistic ties. Her main finding
is that people in general refused to treat the impersonal money in
their possession as an undifferentiated thing, choosing rather to
?earmark? it for their own purposes, keeping some separate for paying
the food bills, some as savings for a holiday and so on. Her focus is
mainly on areas that remain invisible to economists? gaze: domestic
transactions, gifts, charities.

There can be little dispute that people everywhere personalize
money, bending it to their own purposes and devising numerous social
instruments to do so. To the extent that the functioning of money and
markets is understood exclusively in terms of impersonal models, the
neglect of this dimension is surely significant. But critics sometimes
claim that the economists? impersonal approach is irrelevant or even
harmful to human interests. The economy exists at a number of levels
and not just those of the person, the family or local groups. The more
inclusive levels are made possible to a substantial degree by the
relative impersonality of money and markets. It will not do to replace
one pole of a dialectical pair with the other. We are today more than
ever aware of our economic interdependence in a world of markets and
money that has been unified by a digital revolution in communications.
We need to understand this emerging universe of virtual abstraction in
order to make meaningful connection with it from the perspective of
our everyday lives.

/Money in the digital revolution/

The world economy is being transformed once more by radical reductions
in the cost of producing a basic commodity, in this case the
transfer of information. There was a time when commodities traded
internationally were things extracted from the ground and services
were performed locally in person. Now the person answering your
business call could be located anywhere in the world and a growing
number of service jobs are exposed to global competition. Vast profits
are to be made in entertainment, education, the media, finance,
software and all the other information services. But the digital
revolution poses specific problems for accumulation. The saying goes
that ?information wants to be free? and certainly there is continuous
downward pressure on prices in this sector arising from the ease
of copying proprietary products. And there is another aspect of
this revolution that bears directly on the relationship between the
personal and impersonal dimensions of social life.

The cheapening of the cost of information transfers has considerable
consequence for the character of long-distance market relations. The
era of mass production and consumption may be ending as a result.
It is now possible to attach to transactions at distance a lot of
information about individuals. For example, amazon.com keeps a record
of every book bought from them and they make recommendations for new
purchases on this basis. This is similar to the small bookseller who
reserves a book for a favorite customer, but now it all takes place
anonymously at distance. Some firms are already moving towards a
system known as Customer Relations Maintenance (CRM) based on data
banks that know no limit in scope. This enables them to target buyers
who generate above average revenues, to remind them of the need
to buy something for their wife?s birthday and so on. Nowhere has
this process gone further than in the market for personal credit. A
generation ago personal purchasing power could only be extended by
approaching ones bank manager for an overdraft. Now the number and
variety of financial instruments on offer is growing exponentially and
these are often customized to individual needs. It is not quite the
same as ordering a suit from Savile Row in the nineteenth century,
but the trend is definitely to restore personal identity to what
were until not long ago largely impersonal contracts. Of course,
powerful organizations have access to huge processors with which to
manipulate an often unknowing public; and rich individuals have always
experienced markets and money as personalities in their own right.
But for many people these developments have introduced new conditions
of engagement with the impersonal economy. The line between personal
and impersonal society is shifting, with significant implications for
individual and collective agency.

Twentieth century society was based on impersonal economic
institutions that made most people feel largely powerless. The idea is
now slowly taking root that society is less an oppressive structure
out there and more a subjective capacity that allows each of us to
learn how to manage our relations with others. Money is a good symbol
of this shift. It first took the form of objects outside ourselves
(coins) of which we usually had a greater need than the available
supply; but of late it has increasingly been manifested as personal
credit, in the form of digitalized transfers mediated by plastic cards
and telephone wires, thereby altering the notions of economic agency
that we bring to participation in markets. If modern society has
always been supposed to be individualistic, only now perhaps is the
individual emerging as a social force to be reckoned with. This claim
rests on a single overwhelming fact, that large amounts of information
can now be processed cheaply, making possible the repersonalization of
complex economic life. In the process the assumptions that supported
mass society for a century are being undermined.

To speak of ?repersonalization? is probably misleading, since society
and the individual, the impersonal and the personal, are equally
necessary to human existence; and working out specific ways of
combining them is problematic. We have to take society as it comes,
but we can also try to make it. If repersonalization means the
declining effectiveness of the bureaucratic powers with which we
are familiar, it also opens the way perhaps to a new feudalism.
That is why we should not think of the present as a shift from the
impersonal to the personal, but rather as a change affecting the
construction of the relationship between the two. If economy has
become more impersonal, responding in part to the increased scale and
complexity of exchange, this does not mean that the personal basis of
economic relations has been displaced, nor indeed that the dialectic
of individual and collective agency was ever absent from societies
where modern money and markets were marginal. Economic history is
dialectical. Most people are quite anxious about being economically
dependent on impersonal and anonymous institutions. This is an immense
force for reversing the historical pattern of alienation on which
the modern economy has been built. So any renewed emphasis on human
personality and concrete social relations in economic life depends on
the search for forms of impersonal society appropriate to such a goal.

/Conclusion: what is money?/

What then is money? All the textbooks give the same definitions: it is
a means of payment; a unit of account; a standard of value; a store of
wealth. These conventions do not capture the most important feature of
money, its evolution as a means of human interaction in society. Money
is /made/ by us, but for most people it has long been something scarce
which we /take/ passively whenever possible, without any sense of its
being our collective creation. From having been an object produced
by remote authorities, it is becoming more obviously a subjective
expression of our own will; and this development is mirrored in the
shift from ?real? to ?virtual? money. In the last 300 years or so, the
money form has evolved from metallic coins and ledger entries through
paper notes to electronic digits. In the process, money is becoming
dematerialized, losing any shred of a claim that it is founded on the
natural scarcity of precious metals. Even the authority of states,
who stamped coinage and issued the notes with which we are still most
familiar as money, cannot long survive the electronic blizzard that is
money in the age of the internet.

Money is a universal measure of value, but its specific form is
not yet as universal as the method humanity has devised to measure
time all round the world. It is purchasing power, a means of buying
and selling in markets. It counts wealth and status. It is a store
of memory linking individuals to their various communities, a
kind of memory bank and thus a source of identity. As a symbolic
medium, it conveys information through a system of signs that relies
more on numbers than words. A lot more circulates with money than
the goods and services it buys. Money?s significance lies in the
synthesis it promotes of impersonal abstraction and personal meaning,
objectification and subjectivity, analytical reason and synthetic
narrative. Its social power comes from the fluency of its mediation
between infinite potential and finite determination.

In /The Memory Bank/, I sketched a possible scenario of financial
history that leads from state-made money to greater reliance on
personal credit. This does entail, to a degree, a repersonalization
of economic life, as exchange absorbs more and more information
about persons. Plastic credit cards are just the first step in this
process. But if this could be represented as a step towards greater
humanism in economy, we need to recognize also that it entails
increased dependence on the impersonal organization of governments and
corporations, on impersonal abstraction of the sort associated with
the computing operations and on the need for impersonal standards and
social guarantees for contractual exchange of wide scope. If persons
are to make a comeback in the post-modern economy, it will not be on a
face-to-face basis, but as bits on a screen who sometimes materialize
as living people in the present. In the process we may become less
weighed down by the concept of money as an objective force, more open
to the idea that it is simply a way of keeping track of complex social
networks that we each generate as active individual subjects. This
should give reason for optimism that money could once again take a
wide variety of forms compatible with both personal agency and human
interdependence at every level from the local to the global. But we
should not imagine that such a process is likely to be achieved soon
or easily.

Marcel Mauss was far-sighted when he sought to trace the foundations
of the modern economy to its origin in the archaic gift, rather than
in primitive barter as the liberal myth holds. The idea of money as
personal credit, linked less to the history of state coinage than
to the acknowledgement of private debts, is consistent both with
Mauss?s emphasis and with my argument here. If the meaning of money
lies in the myriad acts of remembering that link individuals to
their communities, money in its many forms helps us keep track of
connections with others as the principal instrument of collective
memory. We can now enter circuits of exchange based on voluntary
association and defined by special currencies of the sort pioneered
in LETS schemes. At the other extreme, we will participate as
individuals in global markets of infinite scope, using international
moneys-of-account, such as the dollar and euro, electronic payment
systems of various sorts or even direct barter via the internet. In
many ways, it will be a world whose plurality of association, even
fragmentation, will resemble feudalism more than the Roman empire.
This is an unsettling prospect; for who would want to be prey to
personal rule by gangsters unrestrained by impersonal law? That is why
we urgently need to harness the potential of current economic trends
to develop more effective impersonal institutions (?the state?) at
the level of world society as well as below. In money?s potential to
sustain universal connection lies one indispensable means to that end;
but this will not be realized if it retains its modern form.**

In our rapidly urbanizing world, people will expect to use any
economic freedom they win for themselves to calculate the costs and
benefits of the many contracts they enter in the course of normal
daily life. By emphasizing the means of extending social credit to
responsible persons, we may be able to address more effectively the
causes and remedies of what makes contemporary society so unequal. The
sociologists, anthropologists and alternative economists will not get
far by harping on about how people already impose personal and social
controls over money and exchange. That is the everyday world as most
of us know it. We need ways of reaching the parts we don?t know and of
averting the ruin they could bring down on us all.

Searching for the significance of money or for its wider social
meaning is like asking why anyone would believe in God. Of course we
made Him up, just as we made and make Money up. We believe because we
have to ? and faith is the glue sticking past and future together in
the present. Since our ephemeral economic transactions depend on using
money, it seems to be more stable than the relations it expresses.
Whether we like it or not, money is the ocean we swim in these days.
Despite or because of this, its role in human affairs continues to be
demonized and the attempt to return it to the marginal role it was
confined to in agrarian civilizations always finds a ready audience.
Money surely generates value and significance in human interactions as
much as it erodes them. It is a symbol of each person?s relationship
to society. This may be conceived of as a durable ground on which to
stand, anchoring identity in a collective memory whose concrete symbol
is money; or as the outcome of a more creative process in which we
each generate the personal credit linking us to society. The second
view requires us to abandon the notion that society rests on abstract
grounds more solid than the transient exchanges we participate in. Few
people at present are prepared to take that step. When the meaning
of money is seen to be what each of us makes of it, we may be less
inclined to think of Money as the somewhat archaic God of capitalism
that it has become.





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