Wednesday, January 30, 2013

A toe-in-the-water Ramble on Einzig's Primitive Money

Actually I'm probably about knee-deep into Einzig's book at the moment as the Money Wisdom quotes will testify. I will write a 'serious' review as I did for Desmonde's book, but I need to have a ramble first.

I'll try to keep it brief this time. (Yeah, right)

As with many of the Money books I read, Einzig stumbles across THE question at an early stage. THE question being 'What is Money?' of course. Now, as most authors tend to, Einzig takes the question 'What is Money?' and switches it around to 'What do we mean by Money?' From there its only a quick jump to the rather more comfortable 'How shall we define Money?'

As you know, I'm still stuck on the first question in that little series.

To give him credit though Einzig seems very aware of the power of definition. You may remember my key criticism of Seaford's Money and the Early Greek Mind is that he sets his terms of reference too early and too narrowly. Einzig avoids this;

"At the very outset of his enquiry the author had to face a particularly difficult dilemma. He had to decide whether to arrive at a preconceived definition [of Money] before embarking on his ethnological and historical research, or whether to allow the definition to emerge subsequently from the material collected. This dilemma which confronts the monetary historian or anthropologist engaged in research on primitive money is clearly stated by Laum in his Heiliges Geld. He points out that unless the meaning of the term "money" is defined in advance, students may extend their research over objects which could not properly be described as primitive money, or they would omit others which should have been included. On the other hand, if they accept any of the innumerable definitions put forward by economists, their research becomes both restricted and prejudiced by that preconceived definition. Most anthropologists considered the first alternative the lesser evil...... As for economists, they usually simply proceed on the basis of their favourite definition of modern money.
In this book an attempt has been made to reconcile the two methods..... It is not until after the presentation of the factual evidence that he attempts to solve the problem of finding a definition on the basis of that evidence."
 Paul Einzig Primitive Money (1948) p.33 & 34

I hate the way he speaks in the third person, but anyway so far so good. Well, much better than most.

So what's my problem? Well, just as soon as we bite into the meat of the book Einzig seemingly arbitrarily introduces another word into play; currency. If you're going to take such care about your definition (or not) of money, you can't just chuck in a word like currency. Although to be fair to Einzig everyone does. I did a couple of posts on it last year Money, Currency and Bitcoin and particularly relevant is This is Currency, that's Value, What's Money?

Now, I've already had a good skim of the final 'Theoretical' section of Einzig. There is reference to the difference between money and currency. He says:

"Money" is both currency and credit. The name "currency" implies objects of physical existence in current circulation. Credit-money consists of documents representing a definite amount of money. p.336

and also...

While the term "currency" implies concrete objects in current circulation, the term "money" includes objects which have no concrete existence but are "abstract", "fictitious" or "ideal units, and also credit which though expressed in currency, has no concrete existence. p335

Apart from the fact that these statements seem to contradict one another, Einzig appears to have got himself in a terrible meta-physical muddle here. It seems like he's saying the stuff in my bank account isn't currency. He shouldn't feel bad though, Money does that. You try to fit it within a subject/object metaphysics and bits of it stick out all over the place. Its not just stuff, and its not just not-stuff.

Now you know my take on this don't you? I've said that currency is a subset of Money (which in a way tallies with what Einzig says) but I can see objections to the idea of a subset. It implies that Money and currency share some 'essence'. And I'm not sure that's too helpful. I have to refer you to my description of money here; Money is an aspect of reality that mediates Value and can enumerate certain relations through currency.

I certainly see currency as a more 'earth-bound' phenomenon. Some of the best reading I've done on currency/money has come from the internet in the last few years. Here's one piece A Broader Definition of Currency by @EliGothill from last year which discusses @Artbrock 's ideas on currency (and the metacurrency project). There's a few others on Eli's site too one or two of which I commented on - its well worth having a good look around. Basically though, I disagree with Eli and specifically the view that sees Money as a type of currency (Art uses the term current-see to describe a current that makes value visible).

It is heart warming though to know that this problem - the difference between Money and Currency - is being noticed and considered. In all honesty I think Einzig just missed it. It's easily done. I still do myself in my writing from time to time. But in terms of thinking about Money its a massive issue. Sweeping it under the carpet by saying 'oh they mean the same thing' is not an option. Because clearly, they do not mean the same thing.

Money is a much bigger word. Currency has a specificity to it. However, using the word currency has a 'technical' aura. Traders and Banker - the priests of Money -  talk in terms of currency. The man in the street talks about Money. But just as the most Bible bashing Priest can no more claim to know God than you, Bankers, Economic Historians, Technologists don't know anything more about Money just because they refer to it as currency. Its a wizard's curtain.

This is what I think is the reality* behind that curtain. Its tricky to describe, but I'll start off as precisely as I can and then loosen up a little to make it easier to explain.

Money mediates value. What it mediates through, is mind(s)** It is Value, Mind and Money that give rise to objects. What is not an object, we call a subject. We have an arbitrary term we apply to an object dependent on our perception of its 'moneyness'***. That term is currency. Like Money, 'Moneyness' can not properly be defined, but it can be described as combining object and subject in a form we refer to as currency. This might seem contradictory; describing currency as an object, and then as both object and subject. But this is the reality of currency. It is both symbol (subject) and thing (object), social relation and commodity, liberator and oppressor. The key is that currency comes into being only after we recognise it as an object. Within a community of mind, thoughts, feelings and emotions can not become manifest without an object to which to attach. A tribe is not a tribe without a totem. 
All objects are currency. They all 'contain' a degree of 'moneyness' (they don't, but this gives you a sense of what I mean). The same argument can be made in respect of commodity. Both terms are in essence arbitrary. 
The common view is that currency arose as a product of the subjective; either as a symbol of social relations made manifest by its use in exchange, or as a thing being exchanged which was made manifest by our demands for it. (The most common story is that price, determined by supply and demand within a market, produces currency). This is incorrect.  
Money exists outside of our subject/object conception of the universe. It is Value mediated by Money through Mind that creates the subjects and objects of our existence. 
If you think Money is currency, if you think that things have an intrinsic value, if you think that Mind is brain you might think the above nonsense. But I'm less with impressed with how materialism explains things. I'd rather follow the tangle of metaphysics thinking about Money creates, than just deny it.

Anyway, I've rambled off again. Let me try and give you a paragraph of something a little more earth-bound and solid. This might sound almost political. It's not meant to.

Currency is the stage for a play of social relations and power. It exists within and partly because of a set of social structures, of ways of thinking about things. It exists within its own circumstances. That's why those of an anarchist/libertarian persuasion like gold or bitcoin. The later exists within a more limited set of structures than any in our history. But it is still impossible, even for bitcoin, to escape being a stage. A platform for the play of social relations and power. It is currency, not Money. Freedom to create a new history comes from writing the play, not acting on the stage. The only possible future, and the only future possible is one in which we understand Money differently to how we do today.

And finally, just for the sake of completeness, I better remind you (and myself) where this ramble started. Einzig and his Primitive Money. You won't mind that in my head I call it Primitive Currency? That way I think me and Einzig will get along just fine for the rest of his rather marvelous book. After all, it was one of those amazing books written in the shadow of the second world war - like Polanyi's Great Transformation, or Hayek's The Road to Serfdom - that share an idea that a deeper understanding of Money is good for mankind.

*  What follows in actually more than anything else a description of reality.
**  There's no way to know if its mind - as in we all share in the mind of God, universal consciousness or whatever - or minds - as in all sentient beings have their own separate mind. We've never figured out the problem of the one and the many but there is an excellent chapter on it - and its relationship to money in Seaford's book. Note: I do not say human mind.
***  The idea of money as an adjective rather than a noun is explored by JP Koning on his blog at

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