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’.
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.
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.
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 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.
