[PDF]Advancing Money Talks

© Copyright, Princeton University Press. No part of this book may be
distributed, posted, or reproduced in any form by digital or mechanical
means without prior written permission of the publisher.


INTRODUCTION

Advancing Money Talks

Nina Bandelj, Frederick F. Wherry
& VivianaA. Zelizer


money mesmerizes and mystifies. Its influence extends far beyond
the steely confines of numbers, ledgers, and rational calculations. Yet, for a
long time economists managed to keep monetary analysis safely constrained
within technical territory. Coinciding with Gertrude Steins (1936: 88) sober
dictum that “whether you like it or whether you do not, money is money and
that is all there is about it,” economic analyses demystified moneys range.
They did so by certifying that a dollar is a dollar, no matter how it is earned,
who earns it, or how it is spent. In short, when it behaved, money functioned
as an impersonal medium of exchange and, therefore, could move efficiently.

But money has been escaping its narrow domain. At the start of the twenty-
first century, novel investigations challenge and reshape our understandings
of how money works. Breaking down artificial barriers between the worlds of
money and social life, analysts from multiple disciplines document money’s
integration into the spheres of interpersonal relations, cultural practices,
moral concerns, legal regulation, historical variation, religious meaning, and
political disputes. Within economics itself, new analyses of money have re¬
shaped the conversation. Most notably, the influential mental accounting
theory developed in the late 1970s to early 1980s by Richard Thaler, Daniel
Kahneman, and Amos Tversky, redirected economic thinking about money by
introducing unexpected evidence about monetary differentiation.

Monetary innovations transcend academia. In recent years, the surge of
new currencies and payment systems has transformed how we use money and
how we think about it. Along with cash, credit cards, debit cards, and checks,
we can now pay with Square, Google Wallet, Apple Pay, Venmo, as well as with
a multiplying set of cryptocurrencies, most notably Bitcoin. Or consider how

For general queries, contacfvtafcmaster@press.princeton.edu


© Copyright, Princeton University Press. No part of this book may be
distributed, posted, or reproduced in any form by digital or mechanical
means without prior written permission of the publisher.

[2] INTRODUCTION

m-pesa, the mobile phone-based money transfer service, has opened up a cru¬
cial new form of payment for people in developing economies. And around the
world, emerging local currency communities, barter arrangements, and other
peer economies further broaden forms of exchange and payment. Meanwhile,
leading economist Kenneth Rogoff in his The Curse of Cash (2016) advocates
doing away with paper money.

Bringing together a set of scholars from seven disciplines—namely, eco¬
nomics, anthropology, communication, sociology, political science, philosophy,
and law —Money Talks represents a pioneering effort to document the multi¬
ple advances in monetary analysis and the changes in monetary forms. As they
draw from a dazzling panoply of theories and empirical cases, the chapters
illuminate money’s past, present, and future. Along the way, our authors grap¬
ple with perennial questions but also confront novel dilemmas about money’s
constitution, its effects, and how we account for it.

The chapters explore the vagaries of monetary practices. What explains the
multiple ways in which we use, give, or save money? Are the monies we ex¬
change in our private transactions fundamentally different than those used to
trade in financial and corporate markets? Under what conditions, to what ex¬
tent, and how does the expansion of monetary exchanges transform the prevail¬
ing quality of social life? Given the availability of money, how do people incor¬
porate it into transactions that are not explicitly for market exchange? They
also tackle macro-level issues involving the creation of money. What are the
historical, institutional and political processes underlying the making of state
money, and can its fungibility actually be understood as a political and legal
construction? Does the expansion of more extensive politically backed mone¬
tary systems constrict the range within which local monetary arrangements
operate? If yes, does the state dominate as the exclusive creator of money? If
not, when, how, and why do new currencies emerge? Should we welcome mon¬
etary innovations, such as Bitcoin, or should we be alarmed? When does money
offer freedom and equality and when does it serve to oppress?

These questions find surprising answers in this volume, enriched by its
unique multidisciplinary dialogue. Our authors bring to the discussion not
only varied analytical frameworks but a diverse set of methodologies, includ¬
ing interviews, ethnographies, experiments, and archival historical research.
While the book may not provide conclusive answers to every question sur¬
rounding money, it launches a provocative research agenda that should invigo¬
rate the field on two broad fronts: for those interested in the social meaning
and relational earmarking of multiple currencies, as well as those concerned
with money as a matter of law and the state. As this volume’s contributions
attest, the relational creation and the state creation of money are not at odds
with one another but represent different features of money that an interdisci¬
plinary approach reveals.


For general queries, contactwebmaster@press.princeton.edu


© Copyright, Princeton University Press. No part of this book may be
distributed, posted, or reproduced in any form by digital or mechanical
means without prior written permission of the publisher.

ADVANCING MONEY TALKS [3]

Together the chapters radically depart from standard accounts of modern
money, which rest on four entrenched assumptions: first, that money is a neu¬
tral, asocial, medium of exchange; second, that money ultimately refers back
to a single standard most often identified with government-backed legal ten¬
der; third, that money is fungible across uses and contexts; and fourth, that
money possesses extraordinary powers to shape social life by reducing it to
economic calculation.

In their effort to revamp what money is and what it does, contributions to
this volume challenge all four assumptions. As such, they belong to a much
broader and also multidisciplinary critique of orthodox economic approaches
to markets and economic activity. This critique pushes us beyond the indi¬
vidual as the primary unit of analysis to the ongoing social relations and insti¬
tutions that shape money. Our book’s efforts to rethink money thus become a
centerpiece for broader attempts to offer new visions of economic life.

The book, moreover, builds on revisionist interpretations of money in the
social sciences that began taking shape in the late 1980s, significantly expand¬
ing in the 1990s and into the early decades of the twenty-first century. As late
as 1979, for example, Randall Collins had complained that sociologists ignored
money “as if it were not sociological enough” (190). That changed as new stud¬
ies recognized money’s social and moral realities, demonstrating that money
bears culture and carries a history. Important contributions within sociology
and anthropology included two edited collections, Jonathan Parry and Mau¬
rice Bloch’s (1989) Money and the Morality of Exchange and Jane Guyer’s
Money Matters (1994); Viviana Zelizer’s The Social Meaning of Money (1994);
Nigel Dodd’s The Sociology of Money (1994); and Bruce Carruthers’s City of
Capital (1996).

Since the beginning of the twenty-first century, innovative accounts of
money have picked up speed, with contributions such as Keith Hart’s Money
in an Unequal World (2001), Michel Aglietta and Andre Orleans La monnaie
entre violence et confiance (2002), Arlie R. Hochschild’s The Commercializa¬
tion of Intimate Life: Notes from Home and Work (2003), and Geoffrey Ing¬
ham’s TheNature of Money (2004). Most recently, Nigel Dodd’s The Social Life
of Money (2014), Christine Desan’s Making Money: Coin, Currency, and the
Coming of Capitalism (2014), and Bill Maurer’s How Would You Like to Pay?
How Technology Is Changing the Future of Money (2015) have brought forth
fresh theoretical insights and empirical findings.

Recognizing money’s malleability, social scientists across disciplines have
thus begun exploring money’s sociality, functions, and its varied forms in
modern settings. Notably, within anthropology, scholars disputed long¬
standing assumptions about money’s “grand transformation” from the so¬
cially embedded primitive currencies to socially detached capitalist money
(Weber and Dufy 2007). (For a multidisciplinary bibliography on money fo-


For general queries, contactwebmaster@press.princeton.edu


© Copyright, Princeton University Press. No part of this book may be
distributed, posted, or reproduced in any form by digital or mechanical
means without prior written permission of the publisher.

[4] INTRODUCTION

cusing on work published after 2000, see the Selected References at the end
of this volume).

These studies launched a radical debunking of standard assumptions
about money. Our book forcefully moves the agenda forward. Indeed, its con¬
tributors put minor effort into critiquing what’s wrong with classical notions
of money and instead propose alternative frameworks. On the whole, they do
so in five key areas. First, explaining monetary differentiation: they acknowl¬
edge that challenging fungibility is only a first step and propose varied ac¬
counts of how monetary diversity actually works in intimate as well as market
transactions. Second, they historicize money’s neutrality along with the fungi-
bility paradigm. When, how, and why, they ask, did the assumption of mone¬
tary fungibility and impersonality emerge, and what accounts for its enduring
power? Third, they challenge time-honored theories that assert state monop¬
oly of monetary creation. Taking seriously the significance of alternative mon¬
ies, they advance an expansive definition of money. Money, from this perspec¬
tive, includes state-issued legal tender but also other currencies, including
credit and debit cards, electronic currencies, frequent flier points, food stamps,
gift certificates, and more. 1 Fourth, our authors reassess standard commodifi¬
cation theories, vividly documenting varied ways in which money mingles with
intimate transactions. Fifth, they tackle contemporary innovations in forms of
money and forecast money’s possible futures.

Notice a historical paradox: while turn-of-the-twentieth-century analysts,
including Georg Simmel in his magisterial 1900 Philosophy of Money, asserted
money’s singular and impersonal character, deeply worrying about money’s
seemingly unstoppable raid into social spheres, our twenty-first-century ex¬
perts portray an increasingly diversified monetary world and reveal its social
grounding. Most notably, as they document the cultural, political, and legal
processes involved in creating state money, they trace the unexpected increase
of personalization in emerging monetary arrangements.

Collectively, the chapters also demonstrate why, during times of growing
economic inequality, when money’s symbolic and social meanings may seem
irrelevant, they still matter. Concern with poverty and income disparities by
class should not mislead us into assuming that the form and significance of
different kinds of money make no difference. As Jennifer Sykes, Katrin Kriz,
Kathryn Edin, and Sarah Halpern-Meekin (2015) discovered in their analysis
of the Earned Income Tax Credit (EITC) refund’s special meaning for its re¬
cipients, those distinctions can be consequential, often shaping institutional
and social practices.

Our introduction identifies major themes in the burgeoning literature on
money in order to guide further work. Our hope is that Money Talks will re¬
verberate, opening up opportunities for a more focused interdisciplinary dia¬
logue that can lead to joint future investigations. The sections in the remain¬
der of this introduction orient our path.


For general queries, contactwebmaster@press.princeton.edu


© Copyright, Princeton University Press. No part of this book may be
distributed, posted, or reproduced in any form by digital or mechanical
means without prior written permission of the publisher.

ADVANCING MONEY TALKS [5]

1. Beyond Fungibility: Moving away from money as a homogeneous me¬
dium, we explain in what ways social relations, emotions, and moral
beliefs create profound differentiations among categories of monies.

2. Beyond Special Monies: We debunk the view that nonfungibility ap¬
plies only to special cases or to money in households and other inti¬
mate economies by demonstrating the pervasive earmarking of market
monies.

3. Creating Money: We challenge conventional explanations of money’s
emergence as a unit of account by presenting alternative historical,
cultural, and political interpretations.

4. Contested Money: Having established relational, emotional, moral,
and political dimensions of money, we examine the conditions under
which it becomes morally contested. Are there things money shouldn’t
buy? When does money serve to reinforce moral values and relations?

5. Money Futures: How have technological innovations and emerging so¬
cial arrangements transformed money? And what is the impact of the
new twenty-first-century currencies on our social relations?

Our agenda is ambitious. It pushes us toward a view of money and more
broadly economic behavior as socially grounded as well as historically and
politically constructed. And it forces us to take seriously the significance of
monetary objects beyond legal tender. We turn first to fungibility.


Part 1. Beyond Fungibility

Classical economists proclaimed money as a neutral medium of exchange
serving as a universal payment instrument, a source of stored value and means
of accounting. Money was theorized to emerge in response to the need for
equivalence in economic transactions. Its fungibility was declared indispens¬
able: money remained the same, regardless of the particular social setting or
the specific participants in the exchange.

The staunch fungibility assumption began to crumble in the 1990s as social
scientists rediscovered money as a social, cultural, and political object of anal¬
ysis. People and organizations, they noted, regularly mark consequential dis¬
tinctions among categories of monies. The challenge, however, was explaining
why and how people introduce such distinctions into a seemingly anonymous
medium of exchange. Two main reasons have emerged: one, the mental ac¬
counting theory that focuses on individual cognitive patterns, and two, a the¬
ory of relational earmarking centered on how social relations shape monetary
differentiation.

Introducing the concept of mental accounts, behavioral economists under¬
mined fungibility by demonstrating a pervasive range of monetary distinc¬
tions. Thaler, the field’s pioneer, defines mental accounting as “a set of cogni-


For general queries, contactwebmaster@press.princeton.edu


© Copyright, Princeton University Press. No part of this book may be
distributed, posted, or reproduced in any form by digital or mechanical
means without prior written permission of the publisher.

[6] INTRODUCTION

tive operations used by individuals and households to organize, evaluate, and
keep track of financial activities” (1999:183). People, for instance, often allo¬
cate their rent money, entertainment money, or investment money to separate
nonfungible mental accounts in ways that influence their consumption and
savings choices. Thaler recognizes that these budgetary compartments often
lead to questionable, suboptimal spending decisions. But Thaler also acknowl¬
edges the efficiency of such strategies, suggesting they “evolved to economize
on time and thinking costs and also to deal with self-control problems” (1999:
202). Social class matters as well. Sendhil Mullainathan and Eldar Shafir
(2013), for instance, find that poor people who experience scarcity and the
necessity of making trade-offs are less likely to segregate accounts, and are less
susceptible to cognitive biases (see also Shah, Shafir, and Mullainathan 2015).
This does not mean that poor people do not have a meaningful relationship
with money; it does suggest that the set of practices attached to mental ac¬
counts sometimes resemble those of a textbook economic actor. With its vivid
examples and practical applications, mental accounting theory has become an
influential view that frequently informs policymakers about how individuals
use their money. 2

The second explanation, relational earmarking, moves beyond the individ¬
ual cognitive process by focusing on the social ties and dynamic interactions
that shape how people make sense of money and spending. Earmarking is a
>>>