Wednesday, April 9, 2014

My Review of 'The Sociology of Money' by Nigel Dodd

This review is on Amazon here. If your finger can stand the clicking do please head on over there and click the like button if my review zigs your zag.

Two things first.

Housekeeping. In the interests of full disclosure I've had some contact with the author, Nigel Dodd. I was in two minds whether I should say so here. But, I prefer to err on the side of honesty. The fact that I thought it a brilliant little book seemed to compound the issue. So, whilst I claim this has no effect the review, you can now decide for yourself more fully in the picture. And I can feel like I'm at least trying to keep a virtuous house.

And the other thing. So, literally just as I began to type this review into Blogger, I pull up Nigel's book in amazon in a new window. I notice that there is one 'collectible' hardback edition available. I have a secondhand softback edition which I picked up nice and cheaply. Unfortunately for me the 'collectible' hardback edition is priced at exactly £23.



I buy books on money and value, I don't 'collect' books per se. But it'd be hard not to interpret that as a direct instruction from Eris herself. So I bought it - just to be on the safe side.

I can't afford for that to happen too often, though.

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 Let's get to the review;

Economic reasoning should be the object, not the foundation, of our understanding of money
The book is squarely an academic text. There are no anecdotal asides, no sugary gifts for the accidental or casual reader. Written early in Dodd's academic career the work is endorsed on the backcover by Geoffrey Ingham ('The Nature of Money') and the late David Frisby (editor and translator of Simmel's 'The Philosophy of Money'). Although absent from the bibliographies of some of the more popular recent works on money, Dodd's book does appear in the bibliography to Seaford's 'Money and the Early Greek Mind'. All good omens for the serious student of money. 
One of the criticisms I level against many books on money is that they fail to distinguish between money and currency. All too often the two words are used interchangeably. Dodd's conceptions of 'money' and 'monetary networks' enable him to deal with 'the idea of money' on the one hand, and money as we experience it in time and space (what I call 'currency') on the other. Making this distinction is crucial to achieving a deep and rigorous analysis. 
Dodd also recognizes the problem of knowledge - he says that 'information about money cannot be said to be distinct from money itself but is integral to its features'. The question of how we come to know the things we claim to know about money is very important. Exactly how deeply is money involved in our thought? This is a theme developed elsewhere in an historical context in the work of Joel Kaye and Richard Seaford. Dodd's examination however - akin to Simmel's - is theoretical and analytical; it's about trying to understand the essential nature of money and its relation to thought.
The benefits of Dodd's ambitious but piercing examination are manifold. 
For me, his early assertion (after Cencini) that money is an 'emission' rather than a 'flow' is particularly important. In a sense, this is a metaphysical observation about how we conceptualize money. But it has profound practical implications for both the Quantity Theorems of Classical and Neo-classical economics, and also for the latest attempts - such as that of Steve Keen - to model the economy using the mathematics of fluid dynamics. This analytic truth about money suggests that ideas of 'flow' maybe fundamentally misconceived. 
Dodd's analysis also serves to expose the limitations of the functionalist approaches to money, both in terms of their explanatory power for money's role in the modern economy and of their usefulness as a tool for distinguishing between modern and primitive money, or indeed between different types of modern money. Dodd is right to critique such approaches; 'money is, what money does' is simply not enough. 
Related to this, Dodd asserts that 'any object could in principle be used as money'. Such an assertion, if taken as seriously as it should be, guards against misconceptions about the nature of money gleaned from the observation of objects we use as currency.
Dodd's reading of Simmel is sophisticated. Simmel is cast by some of his detractors (and less well-informed supporters) as a sort of neo-liberal icon who says economic exchange is what makes us who we are. This is a misreading and simplification that Dodd puts right. When Simmel talks of exchange he means all kinds of interactions - he says explicitly that he regards 'even a glance at another person' as an exchange. Simmel also presumed a social totality, rather than individuals bound only by exchange. Most importantly for me though is Dodd recognizes something deeply psychoanalytical in Simmel's approach, asserting that 'ambivalence is at the core of Simmel's analysis'.
Dodd's discussion of Talcott Parsons and Habermas in relation to money was new to me; excepting that I've encountered Habermas's idea of 'communicative action' in the work of Tim Johnson, an academic who writes on the relation of money to maths and the development of scientific thought. Broadly speaking, Dodd suggests that such systems theory approaches, like their economic counterparts, tend to embody their assumptions within their characterization of money itself. We need rather, claims Dodd, to try to understand the essence of money itself. 
Whether Dodd himself communicates a new and deeper understanding of the essence of money in this short book is another question. And an unfair one. My main criteria for reviewing a book, is whether it works in its own terms. This book does. Fundamentally, it's an exploration of the relationship between money and thought. The density of the book's language is challenging, but then so is the terrain it attempts to map out. Ultimately, the claim made by Dodd on behalf of sociology, and against economics, to a greater share in money's soul is justified.
The good news is that later this year (2014), twenty years after The Sociology of Money, Dodd is publishing a second book on money. I'll be getting that, too.
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I did originally stick this next bit in the review, but it was starting to read more like 'Johnny rambling on about Money' than an actual review, so I cut it out. Still think it's interesting though.
Dodd's observation about emissions, quantum time, and monetary flows are prescient of bitcoin's solution to the double spending problem; it is by recognizing - making visible in the form of a decentralized public ledger - the fact of a transaction from payer to payee (an emission) that bitcoin exists; unsuccessful predecessors tended to regard the digital unit as a symbol of value that flowed around a system.
I quickly latched onto the 'emission' idea when I read Nigel's book. I stuck it straight in as Money Wisdom #252. But of course for me, what sparked my interest was not the implications for monetary theory, but that 'emission' is a dirty word. The footnote in the Money Wisdom quote explains. Consequently, I read Ernest Jones' The Symbolic Significance of Salt. I have so much to say about the spunk/money nexus and the spunk/money/salt triune - I hope one day I'll be able to say it with out it appearing completely convoluted (and crazy). I've tried a few times now, but those attempts are abandoned or lost posts.

The title I gave to the review was remix of this quote from Nigel on the final page;

"[Economic reasoning] should be the object, not the foundation, of the project to explain how money works, to understand its nature and account for its existence in society".

Nigel Dodd The Sociology of Money (1994) p.166

I did end up buying a copy of Alvaro Cencini's Money Time and Income (A Quantum-Theoretical Approach) (1988) which is the work Nigel references in relation to this 'emissions' idea. Here is the introduction to chapter five where he introduces the idea;


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I did write a bunch of stuff expanding (tangentially) on the '23' thing. But as is often the way talking about money, the nature of reality, causation, synchronicity, and thought - mixed in with value, language, salt and spunk - things got a little out of hand. Oh, and visibilty/invisibility & the Myth of Gyges - that's something that keeps popping up in my abandoned rambles. I'll try and get something vaguely readable up in due course. No promises though.

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