A prose poem by Mairéad Byrne.
- The gold and silver trees in C.S. Lewis’s The Magician’s Nephew (1955).
- Clifford D. Simak, ‘The Money Tree’ (1958).
- Leaf currency on primordial Earth in Douglas Adams’s The Restaurant at the End of the Universe (1980).
- The money tree in Nalo Hopkinson’s ‘Money Tree’ (1997).
- Leaf currency on the planet Rain in Adam Roberts’s Stone (2002).
You can read more about leafy and other organic currencies at Economic Science Fiction and Fantasy.
The not-for-profit organisation Positive Money have used the recent chatter about magic money trees as a teachable moment. Money does grow on branches: bank branches. More here.
F.A. Walker’s maxim that “money is what money does” is frequently cited within the fairly scanty literature that orthodox economics devotes to the nature of money. (Although in some respects, of course, orthodox economics is all about money).
Walker’s quotation usually comes into play to help join the dots between the question, “What is money?” and an answer enumerating the three or four major functions of money (as a medium of exchange; as a unit of account; as a store of value; sometimes as a standard of deferred payment). Some critics (e.g. Geoffrey Ingham) complain that the functional “definition” actually fails to specify money: saying what money does doesn’t really tell us what it is, and furthermore, doesn’t money do a few other important things that are mysteriously left out of the canonical three or four functions of money?
When Walker’s quotation is invoked, the implication is often that we should be open-minded in definitional matters. Otherwise we risk being blindsided by the dynamism and adaptability of money. If something doesn’t strike us as money, but one day starts acting as a medium of exchange, a unit of account, and a store of value, then we had better sit up and start taking it seriously as money. (A piece of advice that seems all the more pertinent with the rise of cryptocurrency and other forms of digital value). The precision yet flexibility we get from the concentric, increasingly permissive stipulative measures of the money supply (M0, M1, et al.) support the same attitude. It is fascinating, therefore, to see Walker’s words in their original context.
When Walker wrote “money is that money does,” what kind of money did he have in mind?
Walker is arguing for an extremely narrow definition of money by modern standards, distinguishing it from bills of exchange and checks. He would perhaps not think of it as narrow himself, since he was still tacitly tussling with theorists who thought fiat paper money was not really money. Walker is also explicitly leaving out bank deposits, which nowadays are usually held to constitute the bulk of the middling-to-narrower measures of the money supply. For Walker, bank deposits do not perform the function of money, but “save the use” of money.
Walker is not rigidly dogmatic: he recognizes that treasury notes may be more money-like or less, depending on whether they actually circulate (which he suggests, on the next page, in turn depends on whether they are issued in big or small denominations, and whether or not they are interest-bearing). And bank-notes, “from the ill repute of the issuers, might conceivably become of such slow, difficult and limited currency, as to fall out of the category of money” (p.401).
But Walker is certainly not saying, “I can’t offer you hard-and-fast rules for what is or isn’t money; money is whatever fulfills the functions of money.” What he’s actually saying is something more like, “if it discharges debts and purchases things just like money, don’t be hasty! We shouldn’t really say it’s fulfilling the functions of money unless it actually is money.”
So what actually is money? The phrase “from hand to hand” is key for Walker, and he does not count the “mutual cancellation of vast bodies of indebtedness” as something passing from hand to hand (nope, not even invisible ones). Money must not only discharge debts and purchase things, it must circulate.
This might be pushing it a little, but you might even interpret him to be saying the very opposite of what he is supposed to have said. It is not that money is intricate and multifarious and adaptable and difficult to identify with confidence, whereas the functions of money are abstract and easy-to-identify things, so that anything we find fulfilling those functions has every right to be called money. Rather, it is the functioning of money that is a bit tricky to identify — Condy Raguet and Amasa Walker seem to have got it wrong — whereas there is at least some money that is very easy to identify: the coins that everyone knows and uses. To determine if some borderline phenomenon is actually functioning as a medium of exchange or merely ‘saving the use’ of a medium of exchange, we compare it with what we already know is money. (Of course, this isn’t mere morphological fetishism: coins that came in huge denominations, and were interest-bearing, just like treasury bills with those features, would presumably be less valid as money for Walker).
“I make my own money so I spend it how I like.”
“For those that doubted me, yeah this is payback.”
“The cash make us equal.”
“I’m probably just saying that because I don’t have to buy it.”
“Zama-Zam’uthath’ama chance cause in life I opportunity yok’fikela once.”
“I am serious bout my money.”
“All we know is that mula, benjis, franklins, & that guala, fetti.”
“What are those?”
“Nice cars, nice houses. So we’re going around …”
“I got the kind of money the bank can’t hold.”
“The bullshit, save it.”
“My seconds, minutes, hours, go to the almighty dollar.”
“I want art money.”
“I think y’all should give him his money.”
“Don’t act like you forgot.”
How many kinds of capital are there? How should we differentiate them? Why should we call them all capital? Do some kinds include or overlap with other kinds? Do they all share features in common, and/or do they exhibit family resemblance?
Consider the list below of kinds of capital. Which are more important, and which are less important? Which contribute the most to productivity, and which contribute the least, and under what circumstances would this priority change? Are there some kinds of capital that are missing from this list? Are some of these terms fake? Are some of these terms suggestive, but not generally used? Do some of them have different senses in different contexts? Should some of them be further subdivided? If some of them overlap with others, how would you assemble them as a Venn diagram, or a different kind of diagram, or several diagrams? If you had to pick one, which one would you be?
- Tangible capital
- Intangible capital
- Built capital
- Natural capital
- Financial capital
- Human capital
- Social capital
- Institutional capital
- Reputational capital
- Reputational collateral
- Organizational capital
- Instructional capital
- Entrepreneurial capital
- Intellectual capital
- Agnatological capital
- Public capital
- Ecological capital
- Climate capital
- Green capital
- Cultural capital
- Cross-cultural capital
- Diversity capital
- Defense capital
- Constant capital
- Variable capital
- Fictitious capital
- Monopoly capital
- Fixed capital
- Circulating capital
- Labor capital
- Land capital
- Resilience capital
- Venture capital
- Symbolic capital
- Academic capital
- Educational capital
- Working capital
- Liquid capital
- Patient capital
- Sexual capital
- Racial capital
- Identity capital
- Political capital
- Geographical capital
- Game theoretic capital
- Aid capital
- Technological capital
- Embodiment capital
- Capital FM
- Capital capital
- Capital One
- Network capital
- Discursive capital
- Individual capital
- Historical capital
- Hegemonic capital
- Moral capital
When I read discussions of different forms of capital, particularly in the context of development economics, I often see the same pattern. First, let’s put financial capital aside, since it has so many complexities, and I’m not sure they’re relevant to what I’m talking about.
When we look at what’s left, we usually see: natural capital, built capital … and then one or more types of capital which, although they’re not usually named as such, I would describe as moral capital. By this I don’t mean that the countries which “possess” such capital really are filled with moral people. I mean that the way in which theorists imagine such capital is driven by their unacknowledged belief that if some countries are more productive than others, that’s because they probably deserve to be more productive.
For instance, the way in which most theorists imagine human capital, social capital, institutional capital, and instructional capital, puts emphasis on honesty, hard work, imagination, intelligence, courage, self-discipline, self-denial, individual autonomy, and rationality. No doubt there is some truth in this. But it intrigues me how closely this list resembles the reverse of a set of longstanding racist stereotypes, which have been thoroughly interrogated and critiqued at the interpersonal level, while perhaps still flourishing at the supra-individual, macroeconomic level. What if you were to flip it round, and say that the most productive countries are those holding the least of the following types of capital?
- Deceit capital
- Laziness capital
- Hideboundedness capital
- Stupidity capital
- Cowardliness capital
- Lack of discipline capital
- Lusts and appetites capital
- Need for the collective and/or strong authority capital
- Brutishness capital
When Mr. Thang approached me for money the first time, he did so cautiously, explaining that he needed a hundred dollars to purchase material for school uniforms and pay tuition for his two daughters in high school. At the end of his story, he punctuated his story with a “what do you think of that,” as if he did not quite believe it himself. The image of his school-age daughters caught me off-guard. I quickly convinced myself that I was learning something from him and could — perhaps should — pay him for our conversations as I had paid others for more formal language instruction. So I became complicit in the economy of intimacy in which stories could be exchanged for cash, but without ever outright acknowledging what we each thought the money represented.
Allison Truitt, “Hot Loans and Cold Cash in Saigon,” in Money: Ethnographic Encounters, ed. Stefan Senders and Allison Truit (Berg: 2007), p.60.
… people employ money as a means of creating, transforming, and differentiating their social relations. Instead of a single, fungible money that reduces social relations to a thin common denominator, they show us the integration of differentiated monies into the whole range of interpersonal ties. As a consequence, people are constantly creating new monies, and they do so by segregating different streams of legal tender into funds for distinct activities and relations. For example, people regularly distinguish between relations that are short-term or long-term, intimate or impersonal, and broad or narrow in the range of shared activities they encompass. People also mark moral boundaries among categories of money: consider the variable meanings of “dirty” money, “easy” money, or “ blood” money. People often “launder” dubious earnings by making donations to charity or other morally cleansing destinations.
Viviana Zelizer, Economic Lives: How Culture Shapes the Economy (Princeton University Press: 2011), p.89.
Bailey Reutzel is roadtripping across the USA, looking for stories about “people using local currencies, time banks, cooperatives, and other systems that subvert mainstream financial tools.” Interview at The Atlantic.
Money has provided us with the sole possibility for uniting people while excluding everything personal and specific.
The disintegrating and isolating effect of money is not only the general precondition and corollary of this conciliatory and unifying quality; under specific historical conditions, money simultaneously exerts both a disintegrating and a unifying effect. For instance, the organic unity and narrowness of family life has on the one hand been destroyed as a consequence of the money economy, while, acknowledging this as a fact, it has been emphasized that the family has become almost nothing more than an organization  for inheritance. If, among several interests that determine the cohesion of the group, one of them has a destructive effect upon all the others, then this interest will survive the others and become the only bond between the different elements whose other relationships it has destroyed. It is not only because of its immanent character, but precisely because it destroys so many other kinds of relationships between people, that money establishes relationships between elements that otherwise would have no connection whatsoever. Today there probably exists no association between people that does not include some monetary interest, even if it is only the rent for a hall for a religious association.
The more the unifying bond of social life takes on the character of an association for specific purposes, the more soulless it becomes. The complete heartlessness of money is reflected in our social culture, which is itself determined by money. Perhaps the power of the socialist ideal is partly a reaction to this. For by declaring war upon this monetary system, socialism seeks to abolish the individual’s isolation in relation to the group as embodied in the form of the purposive association, and at the same time it appeals to all the most innermost and enthusiastic sympathies for the group that may lie dormant in the individual. Undoubtedly, socialism is directed towards a rationalization of life, towards control of life’s chance and unique elements by the law-like regularities and calculations of reason. At the same time, socialism has affinities with the hollow communistic instincts that, as the residue of times long since past, still lie in the remote corners of the soul. Socialism’s dual motivations have diametrically opposed psychic roots […]
Georg Simmel, The Philosophy of Money (Routledge, 2011), pp.374-275. Translated by Tom Bottomore, David Frisby and Kaethe Mengelberg.