Money in a Human Economy

Keith Hart's, Keith Hart

• Publisher: Berghahn Books
• Year: 2017
• ISBN:
  9781785335600
• Edition: 1
• Topic: Sozialwissenschaften
• Subtopic: Kultur- & Sozialanthropologie

A human economy puts people first in emergent world society. Money is a human universal and now takes the divisive form of capitalism. This book addresses how to think about money (from Aristotle to the daily news and the sexual economy of luxury goods); its contemporary evolution (banking the unbanked and remittances in the South, cross-border investment in China, the payments industry and the politics of bitcoin); and cases from 19th century India and Southern Africa to contemporary Haiti and Argentina. Money is one idea with diverse forms. As national monopoly currencies give way to regional and global federalism, money is a key to achieving economic democracy.

Part I

Introduction

Introduction

Money in a Human Economy

KEITH HART

This book is the third in a series of volumes (Hart and Sharp 2014; Hart 2015) exploring the idea of a human economy as a way of thinking about a better world. These first two chapters explore the tension between money as a human universal and its historical manifestation as capitalism. Inevitably, conceiving of money in abstract and general terms lends a more benign perspective to it, whereas capitalism offers a more divisive and critical perspective. Our aim is not to choose one over the other—a move that is commonplace in ideological conceptions of money—but rather to keep a dialectical focus on both poles, to keep two ideas in our head at once. For if any topic resists reductive treatment, money’s essence lies in movement between the extremes that constitute its character.

We tend to think of money as one thing, akin to the national monopoly currency we are familiar with. It is the same with theories of money. Most people stick with their favorite, to the exclusion of all others. But this monolithic assumption concerning money is losing its power in our time. Singular conceptions of money are giving way to plural versions not just of money but of the kinds of society that it supports. This raises the question of how our various concrete examples relate to “money,” whatever that may be.

We could make of money an analytical construct with some pretension to being money—debt, for example. But then money as the object of our common inquiries would be lost. Once we accept that many thousands of social things can be money, the pursuit of a solid middle ground becomes increasingly implausible. We must admit therefore that each case bites off a chunk of money that combines general and particular dimensions of the enquiry that we share. We must then add the historical complexity of modern money, which is global in scope and goes by the name of capitalism. Finally, as our title indicates, we do have an analytical take on money—its place in something we call “a human economy.” This is what readers will get from this book: a wide-ranging and open-ended set of particular inquiries into money as a feature of the human economy. It doesn’t get more specific than that.

Money is, with language, one of humanity’s two great means of communication. Take a look again at the preceding paragraphs and substitute “language” for every incidence of “money.” The presumption of unity in the case of money is replaced by one of diversity. This is our method. We take something assumed to be generically the same and explore its diversity.

For many, the idea of money in a human economy makes no sense, for what could be more inhuman than money? On the whole, money gets a bad press. Why? For thousands of years property in money fought property in land, and most often the latter was politically dominant (Hann and Hart 2011; Hart and Sharp 2014). Markets and money were denigrated as antisocial elements in economic texts written by supporters of the military-­agrarian complex. The poor have had little love for the rich through the ages and several world religions make a point of stressing this. The idea has entered the modern era in the form of socialist or communist thinking, most strikingly in the Soviet anti-market economy inaugurated by the Bolshevik revolution and later by Mao’s Cultural Revo­lution. There have also been countless utopian experiments that were aimed at making money marginal to their societies. Intellectuals habitu­ally join this chorus, as they have little money and resent having less public influence than those who do have it. The popular saying “money is the root of all evil” has deep cultural resonance, both ancient and modern. Finally—and less pejoratively—money was an impersonal instrument and therefore, in a way, inhuman. It had to be impersonal in order to reach people faraway whom the sender didn’t know and so it stood for the opposite of humanity, even as it served wider human purposes.

In order to identify money’s human side, we must decide what an “economy” is. Is it a species of rationalism, as the economists claim, or a social object as featured nightly on the national news? It is both, a subject-­object relationship that takes the form of a strategy meant to guide the behavior of a class opposed to other classes. Thus the Greek military aristocracy fought the great trading cities in the name of ­oikonomia—economy as household management. Political economy, the opposite of its ancient domestic rival, argued that economic growth required the diversion of funds from land rents to commercial profit. National economy and urban economy unified classes against “the world.” The recent idea of “world economy,” however, has so far disguised highly unequal interests, mainly European and North American to date. Humanity’s task in the twenty-first century is to make a more equal version, but its contours are still vague.

The principles of an economy, conceived of as a specific strategy, must be discovered, articulated, and disseminated. To be useful, an economy should be based on general principles that guide what people do. It is not just an ideology or a call for realism. The social and technical conditions of our era—urbanization, fast transport, and universal media—must underpin any inquiry into the principles of human economy. We do not assume that people know best, although they usually know their own interests better than those who presume to speak for them.

In origin, “economy” privileged budgeting for domestic self-sufficiency; “urban economy” represented the collective interests of a city’s population; “political economy” promoted capitalist markets over military landlordism; “national economy” sought to equalize the chances of a citizen body. Perhaps “human economy” could be a way of envisaging the next stage, linking unique human beings to humanity as a whole by articulating a sequence of social extension, involving its principal predecessors, “house-city-market-nation-world.”

So a human economy is, lest we forget, an economy. But what makes it human? First, it engages with human beings in their everyday lives. As such it feeds off the ethnographic impulse to join people where they live in order to find out what they do, think, and want. Everyday life consists of many small-scale activities, a plethora of economic enterprises and institutions. Economic analysis, moreover, should aim to reach people in ways that make sense to them.

All of this is consistent with a humanist view of the economy. It must be so, if the economy is to be returned from remote experts to the people who are most affected by it. But humanism by itself is not enough. To be human also involves participating in the widest circles of humanity, in world society. So a human economy must seek to build bridges between different levels of association. This is a process of extension and it is closely linked to markets and money, which are an intrinsic part of the human economy. The social dimension of human economy therefore lies not in local and global spheres considered separately, but in movement between them. It must be informed by an economic vision capable of bridging the gap between everyday life (what people know) and humanity’s common predicament, which is inevitably impersonal and lies beyond the actor’s point of view (what they don’t know).

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 prin­ciples of association. We urgently need to make a world where all people can live together. Small may be beautiful and a preference for initiatives grounded in local social realities is essential, but large-scale bureaucracies are also necessary if economic democracy is to embrace the movement of the world we live in.

Since 1800, energy production has grown at twice the rate of the population. Many people now live longer, work less, and spend more than they did before. But the distribution of this extra energy has been grossly unequal. A third of humanity still works in the fields with their hands. Americans each consume four hundred times more energy than Ugandans. This hectic dash of humanity from the village to the city is assumed to be driven by an engine of economic growth and inequality known as “capitalism.” But several social forms have emerged to organize the process on a large scale: empires, nation-states, cities, corporations, regional federations, international organizations, capitalist markets. We need more effective social coordination at the global level and the drive toward local self-organization is strong everywhere. Progressives denigrate the dominant bureaucratic institutions while tending to promote small-scale self-organized groups and networks. Yet no future society could dispense with the principal forms that have brought us to this point. So we need to work out how states, cities, and big money might be selectively combined with citizens’ initiatives to promote more demo­cratic societies at every level. A first step would be to stop viewing the economy exclusively in national terms.

Many progressives, not to mention more radical groups, would not consider working with states and firms. Yet the French revolution was backed by the slaving shippers of Nantes and Bordeaux, the Italian revolution by the industrialists of Milan and Turin. You need a lot of money to raise an army and rich backers whose interests coincide with the revolution are hard to find. Kenya’s world-leading experiment in mobile money, M-Pesa, was launched by a subsidiary of Vodacom. Hewlett-Packard has developed research stations in outlying areas to make computers accessible to the world’s “poorest four billion.” The notion of a “popular economy” has emerged in Latin America since the 1990s, bringing new coalitions (peasants, urban informal workers, unions) into an alliance with progressive governments. Brazil under Lula introduced a community banking system combining microfinance and complementary currencies. The government of Uruguay sponsored a “3C” alternative circuit for SMEs based on unpaid invoices as currency. South Africa is speeding up SMEs’ access to liquidity through a Validation Clearing Bureau.

This dialectic of small-scale humanism and large-scale institutions is central to any version of human economy with a constructive purpose.

Given our preference to anchor economic strategies in people’s everyday lives, aspirations, and local circumstances, the focus must be on extension from the local toward the global. We can’t arrive instantly at a view of the whole, but we can engage more with less familiar worlds. Humanity has developed three preeminent means of moving continuously between extremes of scale and register: music, math, and money. Money and markets are intrinsic to our human potential, not antihuman. Of course they should take forms that are more conducive to economic democracy. It helps to recognize that they span the extremes of human existence: they link us to the universe of our social relations and give precise definition to our most intimate circumstances. As Simmel (1978 [1900]) suggested, money reflects our human potential to make universal society.

What then is money? It is a universal measure of value, but its specific form is not yet as universal as the method humanity has devised to measure time around 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 (Hart 2000) 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.

Huon Wardle has this to say about “drop pan,” a Jamaican numbers game played daily for money:

Under modern conditions, Simmel (1900) argues, money becomes the most objective gauge of human relationships; and control over money is the chief marker of the self’s ability to validate its existence in a shared social framework of space and time. . . . To play drop pan is to search for signs which connect the immediate and utterly contingent elements of Creole experience within an ordering of meaning which, nonetheless, is itself gauged against the shifting evaluations of money as a social principle. Lévi-Strauss describes totemism as a concrete vehicle for understanding abstract relational systems. Simmel’s analysis of money reverses this. Money is a (relative) abstraction, which works because it is able to encompass concrete human connections. Drop pan is a game of concrete symbols played against the abstract master index, money. (2005: 88–89).

Money—the main device in capitalist societies for making social relations objective—is at the same time a benchmark for concrete narratives of subjective attachment. That is why, in far-reaching conflicts like divorce, the argument often focuses on money as a proxy for personal pain. Money’s power lies in this synthesis of impersonal abstraction and personal meaning, objectification and subjectivity, analytical reason and synthetic narrative. It comes from the fluency of its mediation between infinite potential and finite determination. Money has some of the qualities of religion in this regard, the aspiration and ability to link inner subjectivity to the object world that we all share (but would like to establish a meaningful connection with). Once we are open to the possibility, we will discover a number of money’s redemptive features, while recognizing that none of them is more intrinsic to money in isolation than its characterization as “the root of all evil.”

Finally, the human economy idea clarifies a vexatious political issue of our times. Ronald Coase (1937) asked why, if markets are efficient, any self-employed person would choose to work in a collective rather than outsource what they can’t do themselves. Oliver Williamson (1996) takes what is internal and external to the firm to be entirely flexible and extends this idea to relations between corporations and governments. The Fordist phase of internalizing transaction costs is over, not least because the digital revolution has cheapened the cost of transferring information reliably. This does not mean that corporations have ceased to be large and powerful. Of the one hundred largest economic entities on earth, two-thirds are corporations and one-third are governments, half each if national economies are included. All but one of the top 150 firms are financial. Moreover, we are witnessing a drive for corporate political independence that would leave the corporations as the only citizens in a world society made to suit their interests. This is the logical conclusion of the collapse of the difference between real and artificial persons in law, granting business corporations the legal standing of individual citizens (Hart 2005). Thomas Jefferson identified commercial monopolies (“pseudo-aristocrats”) as a powerful threat to democracy—mere human beings cannot compete with organizations of their size, wealth, reach and longevity.

Coase and Williamson imagine a world where companies control the marketing of their brand, outsource production, logistics, and much else, and internalize government. Why rely on nation-states for conflict reso­lution? After all, corporations also have to handle conflicts internally. Why have more state-made and international laws, when what the world needs most is moral law? Corporate Social Responsibility (Salmon 2010) is a major field for negotiating changes in the relationship between firms and society. What kinds of political mobilization could challenge the power of corporations at every level from the local to the global?

The human economy idea may have its origins in small-scale informal activities and a humanist ideology, but effective resistance to a corporate takeover will require selective alliances between self-organized initiatives on the ground and large-scale public and private bureaucracies. It will also require the development of global social networks. There are powerful anti-humanist forces in the world we share. So we must build bridges between local actors and the new human universal, world society. To be human is to depend on and make sense of impersonal social conditions in order to act effectively. Individual rational choice does not come close to approximating this situation.

Human beings need to feel “at home in the world.” The twentieth century opposed state and market as two principles that came into ruinous conflict, whereas they are indispensable to each other, even if they leave out people much of the time. “Society” bridges these extremes and, following Marx, people, machines, and money matter most in our societies, even if the order of their priority is the opposite of what is desirable. Money buys the machines that control people’s access to work. Humanity’s task is to reverse that order.

Money in Society

At the University of Pretoria we have organized a research team to develop a “human economy” approach to development (Hart et al. 2010; Hart and Sharp 2014; Hart 2015). As we have seen, this starts from an ethnographic approach that addresses the variety of particular institutions through which most people experience economic life. We aim to promote economic democracy by helping people to organize and improve their own lives. Our findings must therefore be presented to the public in a spirit of pragmatism and made understandable for readers’ own practical use. The human economy must also be informed by a vision capable of bridging the gap between everyday life and our common predicament. For this purpose a variety of methods might be drawn from philosophy, world history, literature, and grand social theory. Initiatives grounded in local social realities are unchallengeable, but large-scale bureaucracies are also essential if we are to embrace the movement of the world we live in.

In defending ourselves from corporate domination, we need to be very sure that we are human and they are not. The drive for economic democracy will not be won until that confusion has been cleared up.

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. It 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 belo...