My case for a recent speed-up of global integration rests on three developments of the last two decades: 1. the collapse of the Soviet Union, opening up the world to transnational capitalism and neo-liberal economic policies 2. the entry of China’s and India’s two billion people, a third of humanity, into the world market as powers in their own right and the globalization of capital accumulation, for the first time loosening the grip of America and Europe on the global economy and 3. the abbreviation of time and distance brought about by the communications revolution and a restlessly mobile population. The corollary of this revolution is a counter-revolution, the reassertion of state power since 9-11 and the imperialist war for oil in the Middle East...
Humanity is now caught between national and world society; and that is why new ways of thinking are so vital.
Classical liberals promoted markets as a means of greater individual freedom from the arbitrary social inequality of the Old Regime. But the industrial revolution brought about a shift to urban commerce that made vast new populations of wage workers rely on markets for food, housing and the rest of their basic needs. Under these circumstances, society itself seemed to retreat from view, being replaced by an ‘economy’ characterized this time by market contracts instead of domestic self-sufficiency. Others hold that society’s remaining defenses are simply too weak to hold out against the rising tide of global money: you can’t buck ‘the markets’. This notion of markets as a natural force beyond social regulation serves to legitimize wealth and even to make poverty seem deserved.
The founders of modern social theory all considered markets to be progressive in that they broke up the insularity of traditional rural society and brought humanity into wider circles of discourse and interaction. But they differed over what should happen next. Marx and Engels considered that private money (‘capital’) was too fragmented to organize the urban societies brought into being by machine production of commodities; so they looked to the large concentrations of workers for a truly collective remedy. Max Weber recognized that the formal rationality of capitalist bureaucracy often led to a substantive deterioration of livelihood for many. But, as a liberal, he considered wholesale state intervention in markets to be a recipe for economic disaster. Durkheim and Mauss were both socialists who emphasized the human interdependence entailed in an expanded social role for markets and money, while rejecting the Social Darwinist claim that capitalism ensures the ‘survival of the fittest’.
Polanyi never denied the utility of markets for the allocation of some goods and services. What he condemned was the elevation of the ‘self-regulating market’ to a position of dominance and the high price the British working classes paid for this. Laissez-faire liberalism was not the necessary, ‘natural’ concomitant of industrialism: the market regime could only emerge and reproduce itself thanks to specific interventions by the state. At the same time, there were counter-movements within society like Chartism, as the victims of the new liberalism sought to defend themselves. This ‘double movement’ constituted the self-protection of society. Polanyi sometimes wrote of the disembedding of economy under laissez-faire liberalism; but the market remained thoroughly ‘embedded’ in two senses: first, in its dependence on the state and second because it was associated with a range of social institutions, including some formed to counter allegedly impersonal and ‘natural’ market forces. Polanyi’s real objection was not to the market as such, but to ‘market fundamentalism’.
I find Marcel Mauss’s position on markets and money to be more persuasive than Polanyi’s as a basis for ‘institutionalist political economy’. The Gift is an extended commentary on Durkheim’s argument that an advanced division of labour could only be sustained by ‘the non-contractual element in the contract’, a largely invisible body of state-made law, custom and belief that could not be reduced to abstract market principles. 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 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 in subtle ways to others.
Mauss was highly critical of the Bolsheviks’ destruction of confidence in the expanded sense of sociability that sustained the market economy. In his view, markets and money are human universals whose principal function is the extension of society beyond the local sphere, even if they do not always take the impersonal form we are familiar with. This was why he disputed Malinowski’s assertion that kula valuables could not be considered to be money. Mauss advocated an ‘economic movement from below’, in the form of syndicalism, co-operation and mutual insurance. His greatest hopes were for a consumer democracy driven by the co-operative movement. 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. Most of the possibilities for a human economy already co-exist in our world; so 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, Marx and Polanyi — in seeking the integration of institutional possibilities that have been variously dominant in history rather than representing them as mutually exclusive historical stages.
When the market is represented, as in neo-liberal ideology, as a force of nature giving expression to individual interests outside society, political opponents are apt to advocate either its abolition or at least closer control by collective interests. But this generates unrealistic and unsustainable programs that reproduce the neo-liberal model by negation. Mauss’s approach draws our attention to the institutional complexity of markets, while emphasizing their evolutionary function as means of drawing humanity into society on an ever-widening scale. Markets are thus an essential and dynamic feature of the human economy.
Money in the human economy
By calling the economy ‘human’ we insist on putting people first, making their thoughts, actions and lives our main concern. Such a focus should also be pragmatic: making economy personally meaningful to students or readers, relating it to ordinary people’s practical purposes. ‘Humanity’ is a moral quality, implying that, if we want to be good, we should treat other persons, people like ourselves, kindly. Since theoretical abstraction is impersonal and leaves no room for morality, a human economy would have to pay attention to the personal realm of experience; but it would be a mistake to leave it there. Humanity is also a collective noun, meaning all the people who have existed or ever will. So the human economy is inclusive in a sense reinforced by our contemporary witness to the formation of world society...
Money 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 each individual to the universe of relations to which they belong. But people make everything personal, including their relations with society. This two-sided relationship is universal, but its incidence is highly variable. Money in capitalist societies stands for alienation, detachment, impersonal society, the outside; its origins lie beyond our control (the market). Relations marked by the absence of money are the model of personal integration and free association, of what we take to be familiar, the inside (home). This institutional dualism, forcing individuals to divide themselves, asks too much of us. People want to integrate division, to make some meaningful connection between their own subjectivity and society as an object. It helps that money, as well as being the means of separating public and domestic life, was always the main bridge between the two. That is why money must be central to any attempt to humanize society. It is both the principal source of our vulnerability in society and the main practical symbol allowing each of us to make an impersonal world meaningful.
Money thus expands the capacity of individuals to stabilize their own personal identity by holding something durable that embodies the desires and wealth of all the other members of society. Money is a ‘memory bank’, a store allowing individuals to keep track of those exchanges they wish to calculate and, beyond that, a source of economic memory for the community. The modern system of money provides people with a wide repertoire of instruments to keep track of their exchanges with the world and to calculate the current balance of their worth in the community. In this sense, one of money’s chief functions is remembering. If persons are to make a comeback in the post-modern economy, it will be less on a face-to-face basis than as bits on a screen who sometimes materialize as living people in the present. We may become less weighed down by money as an objective force, more open to the idea that it is a way of keeping track of complex social networks that we each generate.
The reality of markets and money is not just universal abstraction, but the 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. To turn our backs on markets and money in the name of collective as opposed to individual interests reproduces by negation the bourgeois separation of self and society. It is not enough to emphasize the controls that people already impose on money and exchange as part of their personal practice. That is the everyday world as most of us know it. We also need ways of reaching the parts we don’t know, if we wish to avert the ruin they could bring down on us all.
