Money in the making of world society, K Hart

Tags: world society, digital revolution, Karl Polanyi, world economy, capitalism, Marcel Mauss, gold standard, purchasing power, human economy, Viviana Zelizer, market economy, personal experience, exchanging money, Richard Nixon, global money transfers, money market futures, money flows, money and markets, human evolution, world currency markets, universal belief, personal, human universal, Ibid, Token money, domestic market system, the nineteenth century, Karl Marx, world market, global civil society, human unity, federal world government, John Locke, Keith Hart, humanity works
Content: Money in the making of world society1 Keith Hart A `Magellan moment' According to writers as varied as John Locke and Karl Marx, ours is an age of money, a transitional phase in the history of humanity. Seen in this light, capitalism's historical mission is to bring cheap commodities to the masses and break down the insularity of traditional communities before being replaced by a more just society. It matters where we are in this process, but the answers given differ widely. When a third of humanity works in the fields with their hands and a similar number has never made a phone call in their lives, I would say that capitalism still has quite a way to go. This chapter takes off from Karl Polanyi's perspective on his moment in history, in The Great Transformation, for analysis and inspiration when addressing our own moment. I will also draw on the work of Marcel Mauss (Hart 2007a), whose name is increasingly joined with Polanyi's by those who advocate more socially responsible versions of economy. My focus will be on the evolution of money at a time when world society is being formed rapidly at considerable risk to us all. I prefer to call this `the new human universal' rather than the normal term, `globalization'. Magellan's crew completed the first circumnavigation of the planet some thirty years after Columbus crossed the Atlantic. At much the same time, Bartolomй de las Casas opposed the racial inequality of Spain's American empire in the name of human unity. We are living through another `Magellan moment'. In the second half of the twentieth century, humanity formed a world society ­ a single interactive social network ­ for the first time. This was symbolized by several moments, such as when the 60s space race allowed us to see the earth from the outside or when the internet went public in the 90s, announcing the convergence of telephones, television and computers in a digital revolution of communications. Our world too is massively unequal and the voices for human unity are often drowned. 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 1
principles of association. The task of building a global Civil Society for the twenty-first century, perhaps even a federal world government, is an urgent one. Money, instead of being denigrated for its exploitive power, should be recognized for its redemptive qualities, particularly as a mediator between persons and society. Money -- and the markets it sustains ­ is itself a human universal, with the potential to be emancipated from the social engines of inequality that it currently serves (Hart 2000). A lot hinges on where in the long process of human evolution we imagine the world is today. The Victorians believed that they stood at the pinnacle of civilization. I think of us as being like the first digging-stick operators, primitives stumbling into the invention of agriculture. In the late 90s, I asked what it is about us that future generations will be interested in and settled on the rapid advances then being made in forming a single interactive network linking all humanity. This has two striking features: first, the network is a highly unequal market of buyers and sellers fuelled by a money circuit that has become progressively detached from production and politics; and second, it is driven by a digital revolution whose symbol is the internet, the network of networks. So my research over the last decade has been concerned with how the forms of money and exchange are changing in the context of this communications revolution. My case for a recent speed-up of global integration rests on three developments of the last two decades: 1. the collapse of the Soviet Union, opening up the world to transnational capitalism and neoliberal economic policies; 2. the entry of China's and India's two billion people, a third of humanity, into the world market as powers in their own right; and 3. the abbreviation of time and distance brought about by the communications revolution and the population's restless mobility. The corollary of this revolution is a counter-revolution -- the reassertion of state power since September 11th and the imperialist war for oil in the Middle East. Certainly we have regressed significantly from the hopes for equality released by the Second World War and the anti-colonial revolution that followed it. On the other hand, growing awareness of the risks for the future of life on this planet entailed in current levels and forms of economic activity might encourage more people to take globalization seriously. The ecological (`green') paradigm -manifested as concern for global warming and for total food, water and energy supplies ­ is powerful enough to replace market fundamentalism as the natural religion of this emergent world society. 2
Marcel Mauss's position on markets and money is a persuasive basis for an `institutionalist political economy', complementary to Polanyi's ideas. The Gift (1990) is an extended commentary on Durkheim's (1893) argument that an advanced division of labour is sustained by `the non-contractual element in the contract', a largely invisible body of state-made law, custom and belief that could not be reduced to abstract market principles. Mauss held 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. The pure types of selfish and generous economic action obscure the complex interplay between our individuality and belonging in subtle ways to others. Mauss (1997) was highly critical of the Bolsheviks' destruction of confidence in the expanded sense of sociability that sustained the market economy. In his view, markets and money were human universals whose principal function was the extension of society beyond the local sphere, even if they did not always take the impersonal form we are familiar with. This was why he disputed Malinowski's (1921) assertion that kula valuables could not be considered to be money (Mauss 1990: 102n). Mauss advocated an `economic movement from below', in the form of syndicalism, co-operation and mutual insurance (Fournier 2006). His greatest hopes were for a consumer democracy driven by the co-operative movement. The true significance for him of finding elements of the archaic gift in contemporary capitalism was to refute the revolutionary eschatology of both right and left. Most of the possibilities for a human economy already coexist in our world; so the task is to build new combinations with a different emphasis, not to repudiate a caricature of the market in the name of a radical alternative. Here Mauss follows Hegel (1821) -- rather than Aristotle (Polanyi 1957a) and Marx (1867) -- in seeking the integration of institutional possibilities that have been variously dominant in history rather than representing them as mutually exclusive historical stages. Mauss (1924) was interested in how we make society where it didn't exist before. Hence we offer gifts on first dates or on diplomatic missions to foreign powers. How do we push the limits of society outwards? For him money and markets were intrinsic to this process. Hence giving personalized valuables could be considered to be an exchange of money objects if we operate with a broader definition than one based on impersonal currencies and focus rather on the function of their transfer, the extension of society beyond the local level. This helps to explain 3
his claim that "the great economic revolutions are monetary in nature" (Fournier 2006: 212), meaning that they push us into unknown reaches of society and require new money forms and practices to bridge the gap. The combination of neoliberal globalization and the digital revolution has led to a rapid expansion of money, markets and telecommunications, all reinforcing each other in a process that has extended society beyond its national form, making it much more unequal and unstable in the process. Social and cultural theorists talk of little else these days than `financialization' (Epstein 2005), the idea that financial services have become the dominant arm of capitalism; and the media are obsessed, as I write, with `the credit crunch', the first sign that this period of dominance is coming to an end. Money has acquired its apparent preeminence because the economy was being extended rapidly from a national to a global level without any of the social regulation that existed before or will likely follow eventually. Naturally, the specialists in money used their newfound freedom from the Keynesian consensus of the 1940s to 70s to loot the world in scandalous and damaging ways that we will have to repair, if we can. But, in addition to drawing people en masse into unsustainable credit schemes, they also began to put in place some of the institutional mechanisms that will be necessary if we wish to make the market work for all of us and not just for them. A lot of the wealth piled up in recent decades came from exploiting discrepancies (`arbitrage') in a world market that was rationalized and made more unitary in the process. Capitalism clearly is instrumental in making world society. It is unlikely to be the basis for its stable functioning, but it does get us some of the way there. That is what future generations will say of us; but they will be most interested in the new social and cultural forms we are making, probably not in the money as such. In what follows, I seek to throw light on our moment in history, first by examining Polanyi's analysis of the part played by money in `the great transformation' of the nineteenth century and in the disaster that followed from it (1914-1945). Then I will sketch my own version ­ which takes off from Polanyi's emphasis, even as it differs from his -- of `the long twentieth century' going back to the revolutions of the 1860s.2 From this I will develop some general arguments concerning money's role in `the human economy', a concept that Polanyi sometimes referred to. I end with some remarks about the political lessons to be gained from revisiting The Great Transformation today. 4
Money in The Great Transformation Karl Polanyi's masterpiece (1944) opens with a highly selective account of the making of world society in the nineteenth century, a society that Polanyi not unreasonably considered to be lying in ruins as he wrote. Money was a central feature of all four pillars of this civilization (see Hann and Hart above). Polanyi identified the interest that had sustained a century of peace with what he insisted on calling haute finance, an institution sui generis, peculiar to the last third of the nineteenth and the first third of the twentieth century, [which] functioned as the main link between the political and economic organization of the world in this period (1944: 10). The international gold standard "was merely an attempt to extend the domestic market system to the international field"; the balance-of-power system was a superstructure built on its foundation; and the gold standard's fall "was the proximate cause of the catastrophe" (ibid: 3). The selfregulating market was "the fount and matrix of the system"; it had "produced unheard-of material welfare", but it was utopian in its pursuit of an autonomous circuit of commodities and money. The liberal state, in the name of market freedom, forced all other interests in society to submit to the freedom of capital, another word for money. Later in the book, Polanyi listed money as one of the three "fictitious commodities". Labour, land and money are essential to the industrial system; they must therefore be bought and sold, but they were definitely not produced for sale. Labour is human activity that is part of life itself; land is another word for nature; and "actual money is merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanism of banking or state finance" (ibid:72). Here Polanyi comes close to suggesting that a free market in money entails buying and selling society itself. Consistent with this approach, Polanyi inverts the liberal myth of money's origin in barter: The logic of the case is, indeed, almost the opposite of that underlying the classical doctrine. The orthodox teaching started from the individual's propensity to barter; deduced from it the necessity of local markets, as well as of division of labor; and inferred, finally, the necessity of trade, eventually of foreign trade, including even long-distance trade. In the light of our present knowledge [Thurnwald, Malinowski, Mauss etc], we should almost reverse the sequence of the argument: the true starting point is long-distance trade, a result of the geographical location of goods and of the "division of labor" given by location. Long-distance trade often engenders markets, an institution which involves acts of barter, and, if money is used, of buying and selling, thus, eventually, but by no means necessarily, offering to some individuals an occasion to indulge in their alleged propensity for bargaining and haggling (ibid: 58). 5
Money and markets thus have their origin in the effort to extend society beyond its local core. Polanyi believed that money, like the sovereign states to which it was closely related, was often introduced from outside; and this was what made the institutional attempt to separate economy from politics and naturalise the market as something internal to society so subversive. Polanyi distinguished between "token" and "commodity" forms of money.3 "Token money" was designed to facilitate domestic trade, "commodity money" foreign trade; but the two systems often came into conflict. Thus the gold standard sometimes exerted downward pressure on domestic prices, causing deflation that could only be alleviated by central banks expanding the money supply in various ways. The tension between the internal and external dimensions of economy often led to serious disorganization of business (Polanyi 1944: 193-4). Another way of putting this contradiction is to oppose the liberal definition of money as just a "medium of exchange" to one as a "means of payment". Money was thus ...not a commodity, it was purchasing power; far from having utility itself, it was merely a counter embodying a quantified claim to things that could be purchased. Clearly, a society in which distribution depended on possession of such tokens of purchasing power was a construction entirely different from market economy (Ibid: 196). Here Polanyi echoes Keynes's (1930) contrast between "money proper" (medium of exchange) and "money of account" (unit of account and means of payment), with the emphasis on the latter, similarly drawing attention to the political possibilities for state manipulation of "purchasing power". The final collapse of the international gold standard was thus one consequence of the ruinous attempt to delink commodity and token forms of money. In a trenchant discussion of the economic crisis of the 1930s that has echoes of the world economy today, Polanyi highlighted the separation of the money system from trade. As restrictions on trade grew, money became more free: Short-term money moved at an hour's notice from any point of the globe to another; the modalities of international payments between governments and between private corporations or individuals were uniformly regulated....In contrast to men and goods, money was free from all hampering measures and continued to develop its capacity to transact business at any distance at any time. The more difficult it became to shift actual objects, the easier it became to transmit claims to them....The rapidly growing elasticity and catholicity of the international monetary mechanism was compensating, in a way, for the ever-contracting channels of world trade....Social dislocation was avoided with the 6
help of credit movements; economic imbalance was righted by financial means (Ibid: 205-6). But of course, in the end, political means of settling the imbalance outweighed market solutions and war was the result. Polanyi concluded in his notes to The Great Transformation that money is not a decisive invention; its presence or absence need not make an essential difference to the type of economy...Money, like markets, is in the main an external phenomenon, the significance of which to the community is determined largely by trade relations. (Ibid: 276-7). When he returned to the subject, as an American academic after the war (Polanyi 1977), much of his polemical intensity had been replaced by a more dispassionate concern to launch the comparative study of pre-industrial economies by anthropologists and historians (see Hann and Hart above). In "Money objects and money uses" (Ibid: 97-121), Polanyi approaches money as a semantic system, like language and writing (cf. Polanyi 1968, Hart 2009). His main point is that only modern money combines the functions of payment, standard, store and exchange and this gives it the capacity to sustain the set of functions through a limited number of "all-purpose" symbols. Primitive and archaic forms attach the separate functions to different symbolic objects which should therefore be considered to be "special-purpose" monies. Here too Polanyi is arguing against the primacy of money as a medium of exchange and for a multi-stranded model of its evolution. There is no sense now, as there was in his passionate war-time book, that the future of civilization depends on getting this question right. The 1940s did indeed see a world revolution. Its immediate outcome was not foreseen by Polanyi. Yet interest in his work has never been greater than now and this may be related to his prophetic value in the present crisis of world economy. Since the last three decades have seen a replay of the "self-regulating market" scenario and possibly the beginning of its demise, Polanyi's vision offers one perspective on the political and economic origins of our own times. But other visions are possible and for my own we need first to retrace our steps to the great transformation of the mid-nineteenth century. The origins of our times revisited The1860s saw a transport and communications revolution (steamships, continental railways and the telegraph) that decisively opened up the world economy (Hart 2000:123ff). At the same time 7
a series of political revolutions gave the leading powers of the coming century the institutional means of organizing industrial capitalism. These were the American civil war, the culmination of Italy's Risorgimento, the abolition of serfdom in Russia, the formation of the Anglo-Indian super-state, Britain's second reform act and Japan's Meiji Restoration. German unification at the end of the decade spilled over into the 1870s through the Franco-Prussian war, the Paris commune and the formation of the French Third Republic. Karl Marx published Capital in the same decade (1867) and the First International was formed in 1864. The concentration of so many epochal events in such a short time would indicate a degree of integration of world society even then. But in the 1870s, international trade accounted for no more than 1% of GNP in most countries (Lewis 1978); and the most reliable indicator of Britain's annual economic performance was still the weather at harvest-time. Capitalism has always rested on an unequal contract between owners of large amounts of money and those who make and buy their products. This contract depends on an effective threat of punishment if workers withhold their labour or buyers fail to pay up. The owners cannot make that threat alone: they need the support of governments, laws, prisons, police, even armies. By the mid-nineteenth century, it became clear that the machine revolution was pulling unprecedented numbers of people into the cities, where they added a wholly new dimension to traditional problems of crowd control. The political revolutions of the 1860s were based on a new and explicit alliance between capitalists and the military landlord class to form states capable of managing industrial workforces and of taming the criminal gangs that had taken over large swathes of the main cities.4 Germany and Japan provided the clearest examples of such an alliance which took a specific form in each country. Before long, governments provided new legal conditions for the operations of large corporations, ushering in mass production and consumption through a bureaucratic revolution. The implicit author of this new synthesis ("national capitalism") was Hegel who argued in The Philosophy of Right (1821) that states, run by university-trained bureaucrats, should regulate capitalist markets with a view to containing their extreme consequences, while allowing their material benefits to accrue to the people as a whole. The national system became general after the First World War and was the dominant social form of twentieth-century civilization. Its apogee or "golden age" (Hobsbawm 1994) was the period 1948-1973. This was a time of strong states and economic expansion when the idea of `development' (poor nations growing richer 8
with the help of the already rich) replaced colonial empire for most `Third World' countries. When, shortly before his downfall, Richard Nixon announced that "We are all Keynesians now", he was reflecting a universal belief that governments had a responsibility to manage national capitalism in the interests of all citizens. The 1970s were a watershed. United States expenditure on its losing war in Vietnam generated huge imbalances in the world's money flows, leading to a breakdown of the fixed parity exchange-rate system devised at Bretton Woods during the war. America's departure from the gold standard in 1971 (Gregory 1997) triggered a free-for-all in world currency markets, leading in 1975 to the invention of money market futures in Chicago to stabilize export prices for Midwestern farmers. At the same time, the world economy was plunged into depression in 1973 by the formation of OPEC and a hefty rise in the price of oil. `Stagflation' (high unemployment and inflation) increased, opening the way for conservatives such as Reagan and Thatcher to revive the strategy of giving economic priority to `the market' rather than `the state'. The economic conditions of three decades ago and the policies devised then find their denouement today. In 1975, all but a minute proportion of the money exchanged internationally paid for goods and services purchased abroad. Thirty years later, this function in turn accounted for only a small fraction of global money transfers, the vast bulk being devoted to exchanging money for money in another form. This rising tide of money, sometimes known as `the markets', represents the apotheosis of financial capitalism, with the actual production and sale of commodities and political management of currencies and trade virtually abandoned in favour of an autonomous global circuit of capital. The conditions Polanyi described above for the decades leading up to the First World War have been closely replicated in the last quarter-century. As the smoke rises from the rubble of neoliberalism's demise, we should revisit the story of national capitalism's rise and fall; and Polanyi's account of that earlier cycle has lost none of its fascination for us. Money in the human economy To call the economy `human' is to insist on putting people first, making their thoughts, actions and lives our main concern (Hann and Hart above). Such a focus should also be pragmatic: making economy personally meaningful to students or readers, relating it to ordinary people's practical purposes. `Humanity' is a moral quality, implying that, if we want to be good, we 9
should treat other persons, people like ourselves, kindly. Since theoretical abstraction is impersonal and leaves no room for morality, a human economy would have to pay attention to the personal realm of experience; but it would be a mistake to leave it there. Humanity is also a collective noun, meaning all the people who have existed or ever will. So the human economy is inclusive, in the sense reinforced by our contemporary witness to the formation of the new human universal that is world society. Anthropologists and sociologists have long rejected the impersonal model of money and markets offered by mainstream economics. Viviana Zelizer (1994), for example, shows that people refuse to treat the cash in their possession as an undifferentiated thing, choosing rather to `earmark' it -- reserving some for food bills, some as holiday savings and so on. Her examples generally come from areas that remain invisible to the economists' gaze, especially domestic life. People everywhere personalize money, bending it to their own purposes through a variety of social instruments. This was the message too of Money and the morality of exchange (Parry and Bloch 1989). When money and markets are understood exclusively through impersonal models, awareness of this neglected dimension is surely significant. But the economy exists at more inclusive levels than the person, the family or local groups. This is made possible by the impersonality of money and markets, where economists remain largely unchallenged. Money, much as Durkheim (1912) argued for religion, is the principal means for us all to bridge the gap between everyday personal experience and a society whose wider reaches are impersonal. Money is often portrayed as a lifeless object separated from persons, whereas 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 individuals to the universe of relations to which they belong. But people make everything personal, including their relations with society. This two-sided relationship is universal, but its incidence is highly variable (Hart 2007b). Money in capitalist societies stands for alienation, detachment, impersonal society, the outside; its origins lie beyond our control (the market). Relations marked by the absence of money are the model of personal integration and free association, of what we take to be familiar, the inside (home). This institutional dualism, forcing individuals to divide themselves every day, asks too much of us. People want to integrate division, to make some meaningful connection between their own subjectivity and society as an object. It helps that money, as well as being the means of separating public and domestic life, was always the main bridge between the two. That is why 10
money must be central to any attempt to humanize society. It is both the principal source of our vulnerability in society and the main practical symbol allowing each of us to make an impersonal world meaningful. Money thus expands the capacity of individuals to stabilize their personal identity by holding something durable that embodies the desires and wealth of all the other members of society. Money is a `memory bank' (Hart 2000), a store allowing individuals to keep track of those exchanges they wish to calculate and, beyond that, a source of economic memory for the community. The modern system of money provides people with a wide repertoire of instruments to keep track of their exchanges with the world and to calculate the current balance of their worth in the community. In this sense, one of money's chief functions is remembering. If the proliferation of personal credit today could be seen as a step towards greater humanism in economy, this also entails increased dependence on impersonal governments and corporations, on impersonal abstraction of the sort associated with computing operations and on impersonal standards and social guarantees for contractual exchange. If persons are to make a comeback in the post-modern economy, it will be less on a face-to-face basis than as bits on a screen who sometimes materialize as living people in the present. We may become less weighed down by money as an objective force, more open to the idea that it is a way of keeping track of complex social networks that we each generate. Then money could take a variety of forms compatible with both personal agency and human interdependence at every level from the local to the global. The reality of markets is not just universal abstraction, but this mutual determination of the abstract and the concrete (Hart 2007b). If you have some money, there is almost no limit to what you can do with it, but, as soon as you buy something, the act of payment lends concrete finality to your choice. Money's significance thus lies in the synthesis it promotes of impersonal abstraction and personal meaning, objectification and subjectivity, analytical reason and synthetic narrative (Wardle 2005). Its social power comes from the fluency of its mediation between infinite potential and finite determination. To turn our backs on markets and money in the name of collective as opposed to individual interests reproduces by negation the bourgeois separation of self and society. It is not enough to emphasize the controls that people already impose on money and exchange as part of their personal practice. That is the everyday world as most of us know it. We also need ways of reaching the parts of the macro-economy that we don't know, if we wish to avert the ruin they could bring down on us all. Perhaps this was what 11
Simmel (1900) had in mind when he said that money is the concrete symbol of our human potential to make universal society. The two great means of communication are language and money (Hart 2009). Anthropologists have paid much attention to the first, which divides us more than it brings us together, but not to money whose potential for universal communication is more reliable, in addition to its welladvertised ability to symbolize differences between us.5 We cannot afford to neglect money's potential for universal connection, choosing rather to demonize it as the source of our vulnerability to people with a lot more of it. It is high time for anthropologists to return to an earlier philosophical tradition, building on Kant's (2006) example, but also on the early twentieth-century neo-Kantianism of Durkheim (1912), Mauss (1924) and Simmel (1900). I have been driven to this conclusion by studying money as the most tangible manifestation of the new human universal that is our shared occupation of the planet. Mauss (Hart 2000: 191-196; 2007a) held that there are two prerequisites for being human: to be self-reliant to a high degree and to belong to others, merging our identities in a bewildering variety of social relationships. Much of modern ideology emphasizes how problematic it is to be both self-interested and mutual, to be economic as well as social. When culture is set up to expect a conflict between the two, it is hard to be both. Yet the two sides are often inseparable in practice and some societies, by encouraging private and public interests to coincide, have managed to integrate them more effectively than ours. Confronting the money crisis then and now Jean-Louis Laville has recently reminded us of the two lessons to be drawn from the history of the twentieth century: First, market society sustained by a concern for individual freedom generated huge inequalities; then submission of the economy to political will on the pretext of equality led to the suppression of freedom. These two solutions called democracy itself into question, whether in the form of totalitarian systems or, with a similar result, through the subordination of political power to that of money. If we reject both of these options, it is then a question of developing institutions capable of guaranteeing a plural economy within a democratic framework, exactly what is compromised when the rationale of material gain without limit has a monopoly. 6 Laville, following Mauss and Polanyi, pillories those who would reject a caricature of the economy in the name of some future alternative, since all economic possibilities coexist now, 12
including those that have been variously dominant in history. Our task is to build economic solidarity (йconomie solidaire)7 through new institutional combinations and with a new emphasis. This means combining the equal reciprocity of freely self-organized groups with the redistributive powers of the state. It is, however, no longer obvious, as it was for Mauss, Polanyi and Keynes, where the levers of democratic power are to be located, since the global explosion of money, markets and telecommunications over the last quarter-century has severely exposed the limitations of national frameworks of economic management. We are clearly witnessing the start of another long swing in the balance between state and market. Central banks are pumping liquidity into failing asset markets, especially housing. The rapid switch by the `masters of the universe' from market triumphalism to the public begging bowl would be surprising, if it were not so familiar. The banks want to privatize their profits and nationalize their losses; but such a political recipe may be running out of popular support. Before long, a genuine revival of Keynesian redistributive politics seems to be inevitable. But the imbalances of the money system are now global, as the financial rescue operation recently performed on failing American banks by the `sovereign funds' of some Asian and Middle Eastern governments shows. Society is already taking the form of large regional trading blocs like the EU, NAFTA, ASEAN and Mercosul; and the Bretton Woods institutions (World Bank, IMF, WTO) promote no interest beyond that of western capital. The strength of any push to reform global institutions will depend on the severity of the current economic crisis. A return to the national solutions of the 1930s is bound to fail. So what are the lessons to be drawn from comparing our situation with the one Polanyi depicted before; and how might the analysis of money offered here help us to find an orientation to the present crisis? Polanyi explained the world crisis then as the outcome of a previous round of what many today would call "globalization". There are substantial parallels between the last three decades and a similar period before 1914. In both cases, market forces were unleashed within national societies, leading to rapid capital accumulation and an intensification of economic inequality. Finance capital led the internationalization of economic relations and people migrated in large numbers all over the world. Money seemed to be the dominant social force in human affairs; and this could be attributed to its greater Freedom of movement as the boundaries of society were extended outwards, then by colonial empire, now by the digital revolution and transnational corporations. The main difference is that the late nineteenth century 13
saw the centralization of politics and production in a bureaucratic revolution, while a century later these same bureaucracies were being dismantled by neoliberal globalization. Moreover, the immediate winner of "the second thirty years war" (1914-1945) was a strengthened national capitalism whose synthesis of state and market was hardly anticipated by Polanyi. It is odd that Polanyi appears sometimes to reduce the structures of national capitalism to an apolitical "self-regulating market". For his analysis of money, markets and the liberal state was intensely political, as was his preference for social planning over the market. His war-time polemic, reproducing something of his opponents' abstractions, was more a critique of liberal economics than a realistic account of actually existing capitalism. This would explain the lingering confusion over whether he thought a "disembedded" market was possible or just a figment of liberal ideology, "market fundamentalism" (see Hann and Hart above). Similarly, one could argue either that neoliberalism did effectively disembed the market economy or that its claim to have done so was a mystification of the fact that Markets were still embedded in largely invisible political processes. In either case, the postwar turn to "embedded liberalism" (Harvey 2005) or social democracy -- what I have called the apogee of national capitalism -- is only weakly illuminated by The Great Transformation. I have made much here of Mauss's idea, cousin of Durkheim's (1893) concerning the organic division of labour (see Robotham below), that the principal function of money and markets is to extend society beyond its existing limits. Thus Malinowski's (1922) ethnography of the kula ring could be taken as a metaphor for the world economy of his day, with island economies that were not self-sufficient being drawn into trade with each other by means of personalized exchange of valuables between local leaders. These canoe expeditions were dangerous and magical because their crews were temporarily outside the realm of normal society. This always happens when society's frontiers are pushed rapidly outwards, as they have time and time again in the last two centuries and long before that. The period of "neoliberal financialization" could be compared with previous episodes in the history of global capitalism, such as the dash to build continental railroads, the gold strikes in California, Alaska and SOUTH AFRICA or the wild rubber boom of the mid- to late nineteenth century. There are many analogous episodes to be found in the mercantilist economies that emerged during the period 1500-1800, notoriously the "South Sea bubble" and the "Tulips craze". Similarly, the last three decades saw a rapid extension of society's frontiers after the postwar convergence of state and market in national capitalism 14
reached its limit in the 1970s. The quick wealth and cowboy entrepreneurship we have just witnessed was made possible by the absence of regulation in a period of global economic expansion. The end of the bubble marks an opportunity to consider how world markets might now be organized in the general interest. It is easy enough to harp on the irrational excess and sheer inequality of the neoliberal era -the heedless speculation, corporate skullduggery, outrageous looting of public assets, not-socreative destruction of nature and society. But there are lasting institutional effects, just as there were to previous booms which generated transport and communication systems; a mildly inflationary gold standard; new industrial uses for rubber; stock markets and colonial empires. I have suggested here that the extension of society to a more inclusive level has positive features; and, before we demonize money and markets, we should try to turn them to institutional ends that benefit us all. The world economy is more integrated than it was even two decades ago; we need new principles of political association with which to put in place more effective regulatory frameworks. Fragmentation would be a disaster. I for one would not wish to return to currency controls and state-managed money, even if it were feasible. Clearly the political questions facing humanity today concern distributive justice. The long period of Western dominance of the world economy is coming to an end. New actors on the World Stage will have their say about who gets what. An escalation of war and general fractiousness is quite likely. Under these circumstances, a focus on the socially redemptive qualities of money and markets might be quite salutary. In this constructive sense, I depart from Polanyi's conclusions; but I fear that his time as a prophet is yet to come. The new combinations of money, machines and people emerging today must be addressed squarely. The world society that has developed in the last half-century has some features never seen before and many that are perennial. Any way forward will be worked out by China, Europe, the USA and regional leaders such as India, Brazil, Russia and South Africa. They will build on an existing diversity that is hardly illuminated by catchall phrases like "neoliberalism". People everywhere are already asking loudly "What happened to our money, our jobs and our houses? Why did we let them get away with it? How can we make sure it doesn't happen again?" Debates about political economy today could use the historical substance and prophetic vision that Karl Polanyi brought to the last time our incipient world society was threatened with disintegration. I 15
have suggested here that, whatever the deficiencies of his analysis, The Great Transformation is still a crucial resource for the making of the new human universal. 1 A chapter in C. Hann and K. Hart (eds) Market and Society: The Great Transformation today (Cambridge UP, 2009). I am grateful to Eric Worby and the School of social studies, University of the Witwatersrand, Johannesburg for the visit there in April-May 2007 when I wrote and presented the first versions of this chapter; also to Alain Caillй for posting a version online on La revue du MAUSS permanente at that time; and to my colleagues and students at Goldsmiths College who suffered a semi-improvised inaugural lecture in October 2007. 2 Shortly after the collapse of the Soviet Union, Eric Hobsbawm (1994) published The Age of Extremes: the short twentieth century, 1914-1991. Giovanni Arrighi (1994) came out simultaneously with The Long Twentieth Century in which he sought to place recent capital accumulation within a historical framework of 700 years. My own approach to the twentieth century focuses on the rise and fall of `national capitalism'(see Hann and Hart above), a process whose origins lie in the 1860s and whose demise is not yet complete, despite three decades of subversion by neoliberal globalization (Hart 2000: 123-130). 3 I borrowed these labels for my own analysis of the two sides of the coin as symbolic of the state/market pair (Hart 1986). 4 Martin Scorsese's 2002 film Gangs of New York (based in part on Herbert Asbury's 1927 book of the same name, whose subtitle is An informal history of the underworld) shows how the Irish gangs of Southern Manhattan were subdued in the context of the civil war by shelling from battleships in the East River. Mass protest over conscription was put down by the army shooting into crowds on Fifth Avenue and this spilled over into America's first urban riots involving poor whites and black refugees from the South. The movie's final scene fades in Manhattan's contemporary skyline over its 1860s predecessor, suggesting that capitalism today was made possible by state violence then. The American civil war wasn't just about conquering the slave owners; there was unfinished business in the industrial North too. 5 The word money comes from Moneta, a name by which the Roman queen of the gods, Juno, was known (Silver 1992). Moneta was a translation of the Greek Mnemosyne, the goddess of memory and mother of the Muses, each of whom presided over one of the nine arts and sciences. For the Romans at least, money was an instrument of collective memory that needed divine protection, like the arts. As such, it was both a memento of the past and a sign of the future. 6 I am grateful to Jean-Louis Laville from whom this quote is taken: `Towards a theory of plural economy: in the footsteps of Mauss and Polanyi' (Laville n.d.), . 7 This notion, originating in the World Social Forum at Porto Alegre, Brazil in 2000, has entered English, via Portuguese and French (Laville and Cattani 2006), rather awkwardly as `solidarity economy'(Allard, Davidson and Matthaei 2008). 16

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