<nettime> money is always social, global and virtual

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

http://www.thememorybank.co.uk/2007/10/09/money-is-always-social-global-and-virtual/

*Summary*

The term “social money” suggests that some money, such as the form
we are familiar with, is not social, even anti-social. With Mauss,
I consider that money’s principal function, like that of the gift,
is the extension of society, just as Simmel saw society’s potential
for universality reflected in money. People have always made money
personal and social by adapting it to their own special purposes,
but this was in dialectical tension with its ability to reach the
most inclusive levels of association. It is therefore mistaken for
proponents of “Local Exchange Systems” (SEL) to imagine that the
principles they wish to introduce are something new; and, by designing
money as a closed local circuit, they have failed to harness money’s
global potential. Too often, in unconscious mimicry of national
currencies, these introverted initiatives stand alone and fail as
a result. The movement to reform money needs to embrace the power
of federation more wholeheartedly in future. This in turn requires
us to engage with the virtual society opened up by the internet.
Money’s ability to make social connection has been vastly expanded
by the “network of networks” and those who wish to work for economic
democracy cannot afford to turn their backs on these developments.
Michael Linton, who founded LETS 25 years ago, is now pioneering
this next phase — developing smart-card technology, new software and
multiple domain naming systems as the means of sustaining money on an
open source basis.

*The text*

When Bronislaw Malinowki published /Argonauts of the Western Pacific
/in 1922, he revealed a world economy in microcosm. No island was
self-sufficient, but each depended on a complex overseas trade
organized without markets and money, capitalists or states. Rather,
big men and chiefs provided the peace for the trade by giving
each other valuables (known as /kula/). Their ethos was one of
ceremony, altruism and generosity. /Homo economicus/ was restricted to
individual barter between the lowly followers of these aristocrats.
Malinowski insisted that the valuables were not currency since they
were not an impersonal medium of exchange or standard of value. He
was not alone in promoting the values of a past era. Socialists had
long advocated a return to non-market economy. Even bourgeois ideology
sometimes imagined a time of primitive communism which had been
replaced by our own regrettably selfish but more efficient economy.

Marcel Mauss drew the opposite conclusion when comparing the archaic
gift with contemporary western economy. We tend to emphasize how
problematic it is to be both self-interested and mutual; yet the two
are often inseparable in practice. Mauss held that 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 to others
in subtle ways. Rather than oppose gift and market, he preferred
to see them both as instances of a universal human propensity for
exchange. Markets and money are necessary for the extension of human
society, but their contemporary impersonal form is unsustainable. The
/kula/ valuables might well be considered a form of personal money.
Capitalist institutions too combine self-interest and elements of the
gift; and sociologists should make this more visible, while rejecting
the one-sided accounts generated by capitalism’s apologists and
detractors alike.

To speak of ‘social money’, therefore, suggests that some money, such
as the form we are familiar with, is not social, even anti-social.
It may be that the word ‘capitalism’ has become too familiar and
general for specific analytical purposes, but it certainly evokes
both the economic inequality and innovation that are endemic to our
world. In /The Memory Bank/ (2000), I tried to separate the idea
of ‘markets’ and ‘money’ from their association with ‘capitalism’.
With Mauss, I consider that money’s principal function, like that of
the gift, is the extension of society, just as Simmel saw society’s
potential for universality reflected in money. As sociologists like
Zelizer (1994) have shown, people have always made money personal by
adapting it to their own special purposes. It is almost a cliché of
anthropology and history that money is usually subordinated to social
ends in non-capitalist economies (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 money and markets in their more
abstract dimensions; and the economists remain unchallenged there. It
will not do to replace one pole of a dialectical pair with the other.

When Michael Linton invented LETS in British Columbia a
quarter-century ago, he had in mind Let’s go! Let’s do it! instead
of passively allowing the money shortage of a recession to keep
people unemployed. But, when pressed for its meaning as an acronym,
he allowed that it might be understood as ‘Local Exchange Trading
System’ and this meaning has been taken up in France where “Systèmes
d’échange locale” (SEL) evoke an ancient salt currency. It has
become conventional that to design money as a closed circuit means
restricting participation to the local level. This goes along with
a reification of society as face-to-face relations, even though
anthropologists have long known that small-scale societies (such as
families or villages) often sustain the most intractable conflicts.
Consistent with this emphasis, local exchange systems have often
become introspective clubs where an active few alienate the many with
their endless manoeuvring for control. Most of these systems choose
to stand alone in unconscious mimicry of the national currencies they
claim to oppose; and the failure rate is high. The movement to reform
money needs to embrace the power of federation more wholeheartedly in
future.

The classical economists focused on the commodity’s higher-order
ability to enter into abstract relations of exchange with other
commodities through money (quantity) rather than on its concrete value
in use (quality). But the commodity remains something useful and in
that use lies its concrete realization. The reality of markets is
not just universal abstraction, but this mutual determination of the
abstract and the concrete. 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. Its social power comes from
the fluency of its mediation between infinite potential and finite
determination. It is not enough to retreat into the local; we urgently
need to develop more effective institutions at the level of world
society too. Money’s ability to sustain local meaning and universal
connection at the same time is an indispensable means to that end.
Local money without global pretensions is as sexy as kissing your
sister.

If money is global as well as social, we must also recognize that it
is virtual. Keynes (1930) distinguished between its abstract function
as ‘money of account’ and the thing that passes between hands, ‘money
proper’. Identification of currency with precious metals – either as
coinage or later as the gold standard – lent credence to the idea of
money as a scarce natural resource, obscuring its more fundamental
role simply as a measure. We may lack the raw materials to build a
house, but we can never be short of the metres, kilos and litres to
measure the wood, cement and paint. So too it is with money; and this
has become more evident as transactions have become increasingly
virtual. The society opened up by the digital revolution now offers
universal means for the expression of universal ideas. Money’s ability
to make social connection has been greatly amplified by the internet,
“the network of networks”, so that markets, world society and virtual
reality feed each other’s explosive growth at this time.

Those who wish to work for economic democracy cannot afford to turn
their backs on these developments. Yet many of them are unfortunately
wedded to reactionary ideologies that owe more to Aristotle and the
medieval schoolmen than to contemporary social possibilities. Linton
has always regretted the narrow localism that has plagued the movement
for ‘social money’ in its first two decades. He is working with a
number of colleagues (http://openmoney.info) to pioneer the next
phase — developing smart-card technology, new software and multiple
domain naming systems as the means of sustaining money on an open
source basis. Some of the principles remain the same – the design of
money as a closed circuit, the money issued by each participant as
a promise to contribute their own goods and services – but others,
such as sophisticated communication between circuits, are new. Now
individuals may join any number of these circuits at once, reflecting
their interests at several levels, not just the local, with a single
smart card able to support simultaneously 15 or more of the circuits.
It is lonely work and there is still much to be done; but without it
‘social money’ will remain an irrelevance to a world rapidly moving in
a different direction.

Keith Hart

Universite populaire et citoyenne de Paris,

L'argent autrement

La monnaie peut-elle etre sociale?

La finance peut-elle etre solidaire?

le 13 octobre 2007, de 10 h a 13 h







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