The great economic revolutions are monetary
Money in the making of world society; conclusions; references
Money in the making of world society
What light do Mauss and Polanyi throw on the part played by markets and money in the making of world society? 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 based 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. He was critical of the Bolsheviks’ destruction of confidence in the expanded sense of sociability that sustained the market economy [Mauss 1997].
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 an impersonal form. This was why, in a long footnote to The Gift [Mauss 1990, 100-102], he disputed Malinowski’s [1921] assertion that kula valuables are not money. Mauss advocated an ‘economic movement from below’, in the form of syndicalism, co-operation and mutual insurance. 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. The possibilities for a human economy already co-exist in our world; 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 rather than Aristotle or Marx in seeking the integration of institutional possibilities that have been variously dominant in history rather than representing them as mutually exclusive historical stages.
Mauss was interested in how we make society where it did not exist before. 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 an exchange of money objects, if we operate with a broader definition than one based on impersonal currencies and focus on the function of their transfer, the extension of society beyond the local level. This helps to explain his claim that the great economic revolutions are monetary in nature, 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.
All economic possibilities coexist now, including those that have been variously dominant in history. Our task is to build economic solidarity [économie solidaire in Laville and Cattani 2006] through new institutional combinations and with a new emphasis. This is a concept that animates progressive intervention in Brazil and France, as well as a new collection produced by the US Social Forum. It 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 public levers of democratic power are to be located, since the global explosion of money, markets, and telecommunications over the last three decades has severely exposed the limitations of national frameworks of economic management.
We are witnessing the start of another long swing in the balance between state and market. Before long, a genuine revival of Keynesian redistributive politics is 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 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.
Conclusions: Polanyi’s prophecy then and now
What are the lessons to be drawn from comparing our situation with Polanyi’s in 1944? He explained the world crisis then as the outcome of a previous round of what today we call globalization. There are substantial parallels between the last three decades and a similar period before 1914. In both cases, national societies unleased market forces, 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 was the dominant social force in human affairs; and this was 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 from today is that the late nineteenth century saw the centralization of politics and production in a bureaucratic revolution, while neoliberal globalization dismantles bureaucracies. Moreover, Polanyi did not anticipate that the immediate winner of what Winston Churchill called “the second thirty years war” (1914-1945) was a strengthened national capitalism.
It is odd that Polanyi [1944] 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 his opponents’ abstractions, was more a critique of liberal economics than a realistic account of 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’ (Hart 2018). Similarly, one could argue either that neoliberalism did effectively separate the market economy from society or that its claim to have done so was a mystification of the invisible political processes that shaped markets. In either case, The Great Transformation only weakly illuminates the postwar turn to “embedded liberalism” [Harvey 2005] or social democracy—what I have called the apogee of national capitalism.
I have made much here of Mauss’s idea that the principal function of money and markets is to extend society beyond its present limits. Malinowski’s ethnography of the kula ring is 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 in the last two centuries and long before that.
We could compare the period of neoliberal financialization 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 analogous episodes 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 reached its limit in the 1970s. The absence of regulation in a period of global economic expansion enabled the quick wealth and cowboy entrepreneurship that we have just seen. The end of the bubble marks an opportunity to organize world markets now 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 criminality, outrageous looting of public assets, the not-so-creative 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. The political questions facing humanity today concern distributive justice. The period of Western dominance of the world economy is now ending. 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 [Hart 2008c].
References
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