Towards a Social History of Money

“What is money? Put simply,” reasoned Diane Morgan’s comic creation, Philomena Cunk, “money is the best way we have of telling how much money you’ve got”. This works as comedy because it sounds absurd, and it is. But it’s also more-or-less the premise on which much Western thinking about money and its social function has been based for the past two centuries.

Among modern social historians, money is an oddly overlooked subject. That may sound like nonsense. After all, economies are fundamental to the political histories of nations and the social histories of families, while the history of consumption has been a notable area of insightful study in recent years. The focus, however, is rarely on the act of payment itself – on money as a social technology.

This is despite a healthy literature on business culture in the past, in which paying as promised was important for merchants in building trust; and another emerging on the sale of slaves, bound up uncomfortably with calculations of human worth and utility. But these are isolated examples of historical awareness that the act of handing over money is rarely, if ever, a value-neutral act; even though the ubiquity of payment in modern life renders this a reality hidden in plain sight.

In other words, Philomena Cunk was wrong. No surprise there. But so were a great many other, more esteemed commentators. Money can tell us a lot more than how much money we have, if we consider the rituals of handing over of money, offering or refusing it. Social interactions involving money can be hugely revealing about the relationships that populate our lives, today and in the past. And social history is a field of study unusually well-suited to evidencing this, by virtue of examining the contexts within which payment takes place; although doing so will mean social historians taking seriously some of the excellent work done over the past thirty years in the new economic sociology.

Photograph taken near Queen St South in Hamilton, Ontario by 'Undustrial'.
Photograph taken near Queen St South in Hamilton, Ontario by ‘Undustrial’.

There’s a long-standing and influential idea that money is simple. It’s not. Yet the idea has a lineage stretching back throughout the history of sociology. One of its founding fathers, Georg Simmel, wrote in his The Philosophy of Money, that money is “the value of things without the things themselves” and “a concrete instruction which is absolutely identical with its abstract concept”. Because money is “a pure instrument” – that is, it says nothing more than how much money you’ve got – it can be both leveller and liberator. Likewise, Max Weber’s sociological explanation of payment as an economic action recast it not as a feature of industrialisation, but as a universal form of social interaction. It was crucial to historical movements and changes, but not of their making. This meant it could be a tool equally used to act upon the Calvinist calling, to replace feudalism with individualism, or to bring about the modern machinery of bureaucracy.

This line of thinking was rehashed in American sociology when Talcott Parsons treated money as a language that can communicate value, but is silent on values. It’s a neutral medium of exchange, a token that can be used without any change to the economy or society within which it’s used. Then again, this side of the pond, by Anthony Giddens, for whom the dominance of money over social context was one of a range of disembedding mechanisms so crucial to modernity.

The seminal work that set a different course was Mark Granovetter’s 1985 article on ‘embeddedness’.  He rejected what he called “the majority view among sociologists, anthropologists, political scientists, and historians” that modernisation disembedded economic behaviour from social relations, but also rejected the utilitarian (neo)classical economic view that universalised independent, rational and self-interested economic behaviour. He critiqued both approaches for treating people as atomised actors, even if acting according to internalised rules of behaviour, and called instead for a far greater focus on the immediate social context.

Granovetter was picking up a theme from Karl Polanyi, but the two seem to me to be pulling in slightly different directions. Polanyi’s The Great Transformation offered a warning that, according to “the market pattern” of the capitalist economy, “social relations are embedded in the economic system” rather than the reverse. This echoed an older, utilitarian body of thought on money and meaning. The central premise of this was that the complex social relationships of the pre-industrial era had been flattened and replaced with a crude cash nexus. The terminology appears to have come from Thomas Carlyle, who in the early years of Victoria’s reign lamented the new reality of “Cash Payment” as “the universal sole nexus of man to man”. His notion that money had come to be the one mediator of rich and poor was picked up by Engels and Marx, and despite the influential work of Emile Durkheim, reinterpreting the change as new solidarities replacing old, concerns of discarded social ties have echoed down the generations.

In setting the stage for the new economic sociology, Granovetter was rejecting this view of money as the inevitable colonizer as much as the notion of money as the colourless leveller.

Mark Granovetter, Viviana Zelizer, David Graeber
Mark Granovetter, Viviana Zelizer, David Graeber

This has been taken in many different directions within and beyond sociology. Anthropologist David Graeber’s history of debt turned on its head the old narrative of the evolution of economic relationships: from barter to money exchange. He says there is simply no evidence this is the order of developments. Instead, he begins with credit and debt – with the social ties and obligations – as the fundamental of economic relationships over thousands of years.

Meanwhile, a host of sociologists have produced work that has sought to understand better the relationship between the economic, the social and cultural. To my mind, the best of these, whose work speaks most directly to social historians – concerned with the everyday lives of people in the past – is  Viviana Zelizer. In her 1994 book, The Social Meaning of Money, she looked at the everyday ways people collect, request, store and use money. In the practice of earmarking she found that not all money is treated the same. The very fact we can talk of dirty money or keep cash in different jars for different purposes, shows that we assign to money values as well as value. She has produced an impressive body of work examining meeting points between money and personal relationships. I find it hard to think of an area of social history, the history of the family or the history of everyday life that wouldn’t run into these issues at some point. Economic Lives serves as a reader for Zelizer’s influential work, and I’d recommend it to anyone wanting to understand the lives people lived and the relationships they forged in the past.

To put it plainly, the fundamental insight I’ve gained from my reading of the new economic history is that the economic is social. The economic behaviour of individuals in the past is, therefore, the proper study social historians. This is so because economic decisions and actions can only be fully explained in social context, but also because they are not a category essentially different or separate from any other type of social activity. Rational economic calculations come into the equation, of course, but historians are used to weighing up the varying impact of numerous factors, all at play at once. Social historians might not always realise it, but writing the history of economic life is very much our job.

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