by From Ken Zimmerman A few basics for economists on money. Money is not a thing or even a physical object (although money may use physical objects). Money is a cultural process (institution) created to credit and clear, satisfy and impose obligations, duties, and responsibilities. Historians often misunderstand money because they focused too much on what it leaves behind, coins, contracts, pay and tax records, etc., rather than the networks created via money and their working out over time. Along with economists and social scientists, historians sometimes fail to examine money because they are the fish of the Chinese proverb, “The fish is the last to know water.” Humans are the last to know money. The closer an institution is to the center of our daily lives, the trickier it is to step
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from Ken Zimmerman
A few basics for economists on money. Money is not a thing or even a physical object (although money may use physical objects). Money is a cultural process (institution) created to credit and clear, satisfy and impose obligations, duties, and responsibilities. Historians often misunderstand money because they focused too much on what it leaves behind, coins, contracts, pay and tax records, etc., rather than the networks created via money and their working out over time. Along with economists and social scientists, historians sometimes fail to examine money because they are the fish of the Chinese proverb, “The fish is the last to know water.” Humans are the last to know money. The closer an institution is to the center of our daily lives, the trickier it is to step outside of it in order to study it—and the more controversial will be attempts to do so. As with all institutions, views of money become clearer and more accessible when the institution of money is under construction and when that institution fails.
How the money institution is framed and operates is historically contingent. But not generally an historical accident. For the past several thousand years the arrangements of money networks (credit and clear, satisfy and impose obligations, duties, and responsibilities) have been in the hands of “elite” groups. There’s never going to be a “fair” sharing of the money pie between elites and non-elites without specific changes in American culture. These elites do not base their actions on economic theories, of any sort but a rather simple factor – who controls the keys to the banks. That control rests with economic, political, and military elites. To maintain peace within these elite groups, money (objects) is distributed in ways that favor members of one or all these elites. The two main problems with these distributions is hiding what is happening and defending it, in the name of science if possible. The banks take care of the first, while economists take care of the second.
As a cultural creation, the fundamental purpose or money is to provide a means for people to satisfy their needs for physical products and services. As a cultural device, money only exists in the in-betweens of people, in their interactions. For most of its history money has had a physical form and presence, e.g., the bill, the coin. Today money also exists digitally on computers and electronic storage media. Of all the cultural devices or tools humans have created money is thus far the most flexible. It can be used in almost any exchange. Early money simply circulated continually from exchange to exchange, some involving some form of market, but most not. Later those favoring capitalist markets seized money to provide the dynamic for their markets and ownership. But money is separate from and does not require capitalism. Also, because of its flexibility and appropriation by capitalism, money was made into a measuring tool to establish cultural status of groups and individuals. And thus, plutocracy and plutocrats are added to human culture.
Money also is a powerful ideology of our time, a single, interchangeable, impersonal instrument — the very essence of our rationalizing modern civilization. Money’s “colorlessness,” as Georg Simmel saw it at the turn of the 20th century, repainted the modern world into an “evenly flat and gray tone.” All meaningful nuances were stamped out by the new quantitative logic that asked only “how much,” but not “what and how.” Whether conservative or liberal, all saw the expanding cash/money nexus as the source of evil. But Simmel and the others are wrong. Examining how people use money contradicts all of this. People fit money not only to their needs but also to their dreams, fears, loves, hates, and desires. Re-purposing it for new futures or failed pasts. Making all kinds of what Zelizer calls “special” monies. From domestic and foreign money to gifted money and charity money. From poor peoples’ money to stolen money and war money. This social lexicon of monies shows that money itself is nothing. It is how people shape it and use it that makes money whatever it is. This richness is lost when we accept Simmel’s gray and flat world created by a money economy. In their everyday existence, people understand that money is not fully fungible, that despite the anonymity of dollar bills, not all dollars are equal or interchangeable. Some money is more limited in who or what gives and receives credit, debt, and obligations. This is developing a new research focus for historians and anthropologists, but not for economists.