Why don’t more people make their own money?

Keith Hart Open Anthropology Cooperative

What can anthropology offer someone who wants to understand money better? Most anthropologists don’t like money and they don’t have much of it. It symbolizes the world they have rejected for something more authentic elsewhere. This lines them up with the have-nots and against the erosion of cultural diversity by globalization. Accordingly, what they had to say about money until recently was the same old story. Bill Maurer, in our conversation on the politics, pragmatics and promise of money, sums up the story as follows:

“Capitalism comes to town and suddenly all that is solid melts into air. Things fall apart. It’s the end of the world. And we already know what happens next: dispossession, exploitation, wealth flows up and so on. Yes, that is what happens. But if we say it is all there is to the kind of monetization or commoditization associated with ‘capitalism’, we’ll never see its other effects, when they are right in front of our noses.”

Modern anthropology had its origins in the democratic revolutions of the eighteenth century. Even in the nineteenth century, anthropologists sometimes studied stateless peoples in search of models for a better society. We lost sight of that possible application of our knowledge in the last century. Economic anthropology today should aim, in part, to help people manage their own economic affairs.

We could, for example, show that the numbers on their financial statements, bills, receipts and transaction records constitute a way of summarizing their relations with society at a given time. (This is what I mean by calling money a ‘memory bank’ ).The next step would be to show where these numbers come from and how they might serve in building a viable personal economy. When individuals are able to take responsibility for their own economic actions, they will understand better the social forces impinging on their lives. Then it might become more obvious how and why ruling institutions need to be reformed for all our sakes.

Immanuel Kant produced the first systematic text in our discipline, Anthropology from a Pragmatic Point of View (1798). Both Kant and his pragmatic perspective have more or less disappeared from anthropology. What is a ‘pragmatic’ approach? The question is not so much ‘How can our knowledge provide an adequate representation of the world?’ but rather ‘Can it help us to get something done that we set out to do?’ Then it would matter less if it is true or not, just whether it works. The closest that my public research has come to such a pragmatic approach has been through the study of community currencies, although I have also found many applications for my knowledge in my own financial practices.

I first heard of LETS, a system for trading with its own money circuit, and its inventor Michael Linton in the mid-80s and later met him in Manchester. I spent two years around the millennium working with him and his partner Ernie Yacub on their Open Money project, sometimes physically, but mostly online. Linton, an engineer, has brought immense creativity and dynamism to developing systems that are suited to the digital age and are scalable; but he has been less successful in persuading people to adopt them. I was supposed to disseminate the results as a writer and this made me focus on the unacknowledged handicaps that people promoting LETS have to overcome. One of these is the dominance of the nation-state as a stand-alone model for forming a community. Another is the deep investment people have in a belief that the money they know is eternal.

I was a professional gambler for a number of years, and I sometimes made the mistake of trying to explain to people how I lived. But all they wanted to know about gambling was that you lose. The only winner is the bookie or the casino. And even the way they gambled was guaranteed to make sure that they lost, so that they really had no alternative than to go back to work and accept the system.

When I wrote about money’s persuasive power (for Steve Gudeman’s Economic Persuasions), I was thinking about LETS. Smith and Keynes changed how we think because they understood that theirs was a rhetorical exercise before anything else. There was a time when I was more sanguine about the immediate prospects of a breakthrough with these community currencies. In my lifetime, these approaches may or may not actually change economic conditions for very many people. But whether they ‘work’ or not, they are a terrific source of political education.

Just by entering a currency experiment, people get to argue about what form the money should take, who should be in the circuit, what is its relationship with the national currency? Should the currency be scrip or something else? But, because these things are usually conceived of as stand-alone and local, the resulting form of association is some kind of micro nation-state. They end up being like every other similar organization in which a few people put in a lot of time and argue about the minutes, so that the whole thing becomes a kind of parish politics and most people get alienated from it. People who entered these self-generated money circuits with real economic purposes get frustrated and move on. Michael Linton knows this and for years now he has been developing multiple-currency systems using internet-based technology. But that is another story.

It is a curious fact that complementary currency schemes seem to flourish more in rich countries than in the poor countries that would appear to need them most. That may now be changing. Maurer’s Institute for Money, Technology and Financial Inclusion at UC Irvine has received a grant from the Gates Foundation to explore, among other things, the impact of mobile telephony on poor people’s access to and use of money. East Africa, and Kenya in particular, has recently emerged as the world’s leading innovator in this area. Africans largely missed out on the infrastructure associated with the development of electricity grids, but they have leaped to grasp the opportunities offered by mobile phones. These, unlike the World Wide Web and other aspects of the digital revolution, have a built-in payment system whose potential has been blocked in more advanced economies by entrenched financial interests.

At a time when the hardware manufacturers in the rich countries are wondering how to sell more and fancier computers in a sated market, Kenyans have taken the lead in adapting cheap old machines for use by the world’s poor masses. Nowhere else has the use of mobile phones for banking, commercial and administrative purposes been taken further than here. M-PESA (short for mobile money in Swahili) was first launched by the Kenyan affiliate of Vodafone  in March 2007. It quickly captured a share of the market for cash transfers and grew rapidly, with 6.5 million subscribers by May 2009 and 2 million daily transactions in Kenya alone. In December 2008, a group of banks successfully lobbied for an audit of M-PESA, in an attempt to slow down its growth; but the audit found that the service was robust.

There is a lot more to this revolution than just banking. Instead of walking to a distant town and queuing to pay taxes and fees, often unsuccessfully, people can now pay them instantly with their mobile phones. Relatives of the victims of road accidents in remote areas can buy blood to be sent from a regional hospital in time to save lives. Farmers can check market prices around the country before deciding when and where to send their produce for sale. Families dispersed by migration can keep in touch by phone, using highly sophisticated methods at little or no cost. Now this is a financial revolution that anthropologists ought to have plenty to say about. And not just because it is in an exotic part of the world.

That’s all folks. It’s been a pleasure.

About Keith Hart

Keith Hart is an anthropologist who lives in Paris, where he has recently entered a number of collaborations with French intellectuals. He is Professor of Anthropology Emeritus at Goldsmiths, University of London and Honorary Professor in both the School of Development Studies, University of Kwazulu-Natal, Durban and the Department of Anthropology and Archaeology, University of Pretoria. He started out studying classical languages and literature and went on to explore Atlantic society from the point of view of Africans in West Africa, North America, the Caribbean, Britain, France and South Africa. Now he contemplates the Indian Ocean from a beach flat in Durban, South Africa. Keith has taught in ten universities on both sides of the Atlantic, for the longest time in Cambridge, where he was Director of the African Studies Centre. He has worked as a consultant, journalist, publisher and gambler. He contributed the concept of the informal economy to development studies and has published widely on economic anthropology, especially about money. His life is now defined by the poles of solitary writing and world travel. In this he is sustained by his family and by the virtual social network in his laptop.
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3 Responses to Why don’t more people make their own money?

  1. *That’s all folks??*

    I’ve really enjoyed Keith’s five-part blockbuster on the Crisis &c, though I’m at a loss to know how to engage with it all in this format. So many things to talk about – like the recent dizzying ascendency of Mauss in the Founding Father galaxy… or why we keep lamenting the eclipse of Marx while continually evoking his relevance – as in every financial crisis for the last century and a half (e.g. in the late ’90s – see Eagleton’s Marx and freedom (1997), Donham’s History, power, ideology (1999), or John Cassidy’s influential essay ‘The return of Marx?’ in The New Yorker, October 20/27 1997, pp 248-256). But that doesn’t feel like bloggy stuff to me. I guess I’m guilty of kicking off ‘The Financial Crisis’ too ponderously in September, though at the time ‘Corporate Greed’ seemed Anthropology Lite to me. The blog has produced some pronouncements which are solid to a fault, and quite a few interesting illustrations, but has never loosened up enough to encourage the bloggy-minded out there to wade in. Or maybe that was never the goal.

    Keith’s major contributions to social and economic theory – encapsulated in the early idea of the ‘informal sector’ – seem perfectly in synch with our desire to break our intellectual and institutional strait jackets. More than that, someone with his intimate knowledge and practical experience of gambling, petty criminality, commodity speculation, scrips and the like seems ideally placed to guide us through the cyber-anomia of this brave new world we anthropologists – or some of us – would like to inhabit. Keith is anthropology’s master of e-comms – he if anyone knows what a blog is and could be, and he has been notably generous in passing on his knowledge to the rising tide of competitors for our time, interest and energy. It would be great if he could summarise what’s been happening here, before this game’s over next month, and tell us what should happen next.

    PS: I’ve been trying since yesterday to upload this!

  2. Keith Hart says:

    I love you too, Sand. But you know that already.

    The way forward is social interaction and conversation as opposed to ex cathedra pontification.

    I signed off because I wanted people to know they didn’t have to worry about being bombarded by more of my narcissism. You get that way when you keep sounding off in a void.

    God only knows, writing is a lonely pursuit and feedback is rare in any medium. I have a friend called Ruth who writes to authors whose books she likes. She gets 4-page handwritten letters back, even invitations to dinner. She says, I wonder how they find the time. And I say, But you are the only one who writes, Ruth! They are starved of feedback. It’s the same with teaching. We never really know what impact we have on our students, but at least the new media allow an occasional email message to get through: You don’t know me, but your lectures changed my life. One of those gets me through a whole year.

    So there’s nothing new about sounding off into a void. Still the medium is supposed to be interactive and, when it doesn’t happen, the blogger feels guilty. At least I do.

    I do think this series has been a disappointment from that point of view, even though the standard of the posts, including yours, has been very high and will no doubt be a valuable teaching resource for some time to come.

    I started out by trying to stir things up and got chastised by my friends for it. I do think the organizers of this blog need to think about making access to commentary easier. All my comments went into the trash, including this one (and Akismet says it learns all the time!). You found it difficult. Someone wrote to me asking if it was possible for non-ASA members to post a comment. You still have to register to do so. As long as comments are moderated, there is no need for that.

    The great thing about the Open Anthropology Cooperative is that people do whatever they like without permission and the resulting proliferation is impossible for any one person to monitor, never mind control. They don’t need anyone to tell them the way forward. They are the way forward. I follow them. Down with the guild, I say.

  3. gusifang says:

    Thanks for the inspiring M-PESA story. It seems however that this is a banking system providing new payment services, but not a new money. The system is used to transfer national currency from one user to another.

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