Geoffrey Ingham

Money Is a Social Relation

Money continues to present theoretical and conceptual difficulties for mainstream neoclassical micro- and macroeconomics. In most treatments it is “neutral,” as either: a symbolic “veil” over an underlying “real” economy; a special “commodity” with utility for the rational maximizing individual; or as part of a model of aggregate economic “variables.” The methodological assumptions of these approaches cannot account for the fundamental characteristics of money as a measure of value and acceptable means of payment. Many of these diffculties are resolved if money is conceptualized as a structure of social relations.

The Specificity of Money

In “Laundering ‘money’: on the need for conceptual clarity within the sociology of money”, ( Archives Europeennes de Sociologie , XLVI, 3 (2005), pp. 387–411, Nigel Dodd tells us that recent work has added further complications to an existing “conceptual muddle” in the sociology of money, and advances a claim to have made matters clearer (Dodd 2005a). The “muddle” is identified in the work of Cohen (2004), Hart (2000), Zelizer (1994, 2000), and in my own book The Nature of Money (Ingham 2004). In the same year, Dodd advanced the same critique – at times verbatim, in Economy and Society (Dodd 2005b), where, subsequently, I responded to what I take to be the misunderstanding and misrepresentation of my work (Ingham 2006). Here, I will briefly reiterate these objections, focusing mainly on the uncertainty, ambiguity, and consequent incoherence, of Dodds attempt to identify the specific nature of money. On the one hand, he asserts that “any attempt to build a coherent theoretical conception of money is bound to fail” (p. 387). But, on the other, Dodd also argues that that “greater conceptual clarity can be brought to bear” by making a distinction between the monetary medium and moneys denomination (p. 406). Leaving aside for a moment the fact that such a distinction has been commonplace in monetary theory at least since Plato and Aristotle (see Schumpeter 1994 [1954]), Dodd appears to be unsure, on rather curious intellectual grounds, about the usefulness of his claim to have provided conceptual clarity.

British capitalism: Empire, merchants and decline

P. J. Cain and A. G. Hopkins, British Imperialism: Innovation and Expansion, 1688–1914 (1993), xiv + 490; British Imperialism: Crisis and Deconstruction, 1914–1990 (1993), xiii + 326 (Longman, London, £17.99 and £3.99). W. D. Rubinstein, Capitalism, Culture, and Decline in Britain, 1750–1990 (1993), viii + 182 (Routledge, London, £25.00). Stanley Chapman, Merchant Enterprise in Britain: From the Industrial Revolution to World War I (1992), xvi + 336 (Cambridge University Press, Cambridge, £40.00).

The City: Origins, Structure and Practices

The City is unique: no other international commercial, banking and financial centre has ever enjoyed such a lengthy and continuous period of operation — over 250 years.1 And in this crucially important respect, Britain is consequently also unique: no other industrialised society has ever acted as host to a centre which has undertaken such a large share of the world capitalist system’s commercial, banking and financial activities. Britain was not only the ‘workshop of the world’, but also its ‘clearing house’ and whilst the former status has long been lost, the latter — despite some recent competition from other centres — has not. The consequences of this enduring economic activity for the development of the dominant classes, the state system, and the economy of Britain can scarcely be over estimated.

Review of Money and Calculation: Economic and Sociological Perspectives

There has been a considerable revival of academic interest in questions about the fundamental nature of money and its role in modern capitalist economies during the past decade. This has been evident mainly in the social sciences outside the mainstream of academic economics, but even here there has been some attempt to resolve the paradox that formal economic theory—particularly equilibrium theory—has been unable to explain money’s existence and to assign it an essential role in its models. These questions have become increasingly important and unavoidable in the face of the enormous expansion of evermore complex calculations of risk and value in financial and money markets. This collection of essays is the result of a workshop held at Bocconi University in May 2008 to explore these issues from a diversity of perspectives—phenomenology, economics, sociology and some contributions that defy such conventional classification.

Breakdown of the Liberal World Order and Britain’s Response

When one considers the course of world economic and political development during the twentieth century then the City’s present position and prosperity in relation to domestic industry appears at first glance to be truly remarkable. London has survived the collapse of the gold standard; the chronic and periodically acute weaknesses of sterling; the total disruption of commerce and banking in two world wars; international depression; and three periods in which increasingly determined efforts have been made to restructure the British economy in line with what have been taken to be the requirements of productive capital.

Postwar Mercantile Revival and Industrial Decline

The most protracted and open struggle between the two major forms of capital in Britain occurred during the 1960s. At times the conflict became acute and (perhaps as an indication that productive capital was near to achieving hegemony) pervaded all the major institutions of British society. The broad issues in the ideological ferment were the same as in the past: ruling class traditionalism; the liberal elitist educational system; outmoded forms of bureaucratic administration, particularly at the highest levels; and the existence of a technologically backward industrial structure.

The Interwar Years: the Rise and Fall of Gold

The interwar years are now generally regarded as a turning point in the history of capitalist development, and for Britain, as the pivot of the liberal system, a period of drastic change. The First World War appeared to have hastened the transition from the competitive market capitalism of free trade under the discipline of the gold standard to a more controlled economic order eventually based on protection and state intervention in industry, which was now characterised by monopolies and joint stock companies. During the early part of the period, however, it was believed in Britain that the First World War had been an unforeseen and quite discrete intrusion which had led merely to the suspension of the liberal system. Consequently, Britain’s dominant class set about its reconstruction as soon as victory seemed possible.

British Capitalism, ‘Exceptionalism’ and Marxist Theory

In this and similar observations on the political consequences of periodic economic crises in the mid-1850s, Marx clearly believed that the dislocations brought about by capitalist overproduction would have the effect of finally removing the archaic political alliances which were incapable of giving adequate expression to the major social forces of the capitalist mode of production — the industrial bourgeoisie and the working class. In other words, Marx considered that political relations would now more closely approximate the real material relations of society between the expropriators and producers of surplus value.

The Emergence and Consolidation of City Dominance 1815–90

During the nineteenth century Britain’s manufacturing superiority and share of world trade helped transform the City into the ‘natural’ commercial and financial centre of the world system. However, the City’s position was never a simple reflection of this economic strength. In addition to the productive base, the following may be taken as the proximate conditions of existence for the City’s growth: (i) the unprecedented 100 years peace between the major European powers (1815–1914) — the Pax Britannica; (ii) the commitment to economic liberalism (1820–1931) — in particular, free trade; (iii) the reintroduction and formalisation of the domestic gold standard which, significantly, lasted as long as the peace itself.