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6 Money as Ritual and Cult

6 Money as Ritual and Cult

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Published by Douglas Knight
Chapter Six of the Gospel and Economy book
Chapter Six of the Gospel and Economy book

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Published by: Douglas Knight on Jun 10, 2010
Copyright:Attribution Non-commercial


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6. Money as Ritual and Cult
1. Belonging2. Charisma and Credit3. Enthralment and Ritual4. Earlier Globalism – The Empire and its Cult5. The Modern Economy as Empire and cult6. Reconciliation and Unity7. Anticipating Another EconomyWhat is money? In this chapter we consider money as the idiom in whichwe grant one another licence to act in certain ways and do certain things.Money is a series of ceremonial and ritual forms by which we grant oneanother this approval and permission. Who gives this approval? We give itto one another. Everyone who buys or sells looks to the rest of us foraffirmation of that transaction and the relationship it creates. We are allwitnesses and guarantors of every transaction. There are three parties toevery transaction – the buyer, the seller, and all the rest of us who affirmthese two parties in these roles. Modern economics assumes that thereare just two roles. But the witness and approval of a third party isrequired to make this event a contract and so an economic transaction. Itis a valid and complete transaction to the extent that watching audienceare convinced that it is so.In this chapter we will examine money as (1) an idiom of our belongingand being together (2) the ritual of our mutual recognition and deference(3) the ritual by which we claim a particular place in the world and bywhich (4) we make an object material in this relationship, and (5) theceremonial that makes up the world we share.
1. Belonging
Belonging is the first purpose of all the action that we call ‘economic’. Thepoint of the transaction is not simply to possess or use this commodity,but so that others see us in its light. It reveals our identify to them insuch a way that they wish to be with us. The modern economic accountthat concentrates on goods without reference to the social context whichdetermines what things are desirable, and are therefore commodities, it issolipsistic.Modern economic identifies two sides to a transaction, the buyer andseller, the Supply and Demand side of the economy.
But we are not goingto observe these separate discourses of inside and outside as these arelaid out by modern economics. We will considering all human interactionas a single continuum, and treat humanity as a single household. We willregard every particular instance of human interaction as an action within acontinuum so that the action of one is part of the action of all.
The Club
Let us start with the simplest form of belonging. You join a club. Youbecome a member of the golf club, say, or of the union, trade association
Modern Palgrave
or rotary club. You become a member in order come into relationship withother members, who you hope will be pleased to give you a welcome.They give their affirmation and so they help to secure your public identity.You become a member so that you can be with your pals. Belonging iseverything.The club gives its members social standing. If the club is small enough, noexplicit record of who owes whom is necessary. It is a is a primitiveeconomy in which everybody knows Every voluntary association may besaid to be a form of credit union in that it members extend social credit toone another. This takes time and requires face-to-face encounters, whichare provided by all those drinks, receptions, competitions and away days.A glance at a credit union may help us to realise this. A credit union is agroup of people who give one another social recognition in the mostexplicit way, by extending credit, lending one another money which has tobe as explicitly repaid. Again if that credit union is small, the panel of allmembers may interview each applicant and each decide whether they area good risk. The panel can meet to review the progress of borrowers, soeach is reminded of the progress they are making towards re-paymentand respectability. Each can be shamed or encouraged towardsrepayment. The kudos of being a member of this club, is a powerfulincentive to meet re-payments and remain in good standing. Once theyhave demonstrated that they are a good risk they may become lenders,full members of the club who are able to monitor the credit-worthiness of others.
Perhaps the credit union shows us something about the functionof all clubs.Any society is made up of many forms of associations, in each of whichany member can say who is up and who is down. Each institutionfunctions as a credit union, in which credit appears, not in explicitlyfinancial terms, in terms of a broadly-conceived terms of credit-worthinessand authority. Each is extended to varying degrees the approval andlicence of his peers. A member is involved a myriad relationships in whichhe is sometimes debtor, sometimes creditor. Informal accounting dependson our ability to monitor changes in status among our peers. In such agroup, each can remember who is up, who is down, and whose turn it isto deal next. One indication of the success of a society is that its membersdo not have to be too concerned about which of them in credit or debit: itcan afford to assume that a member who is in debt now will be in creditlater. This is possible as long as the question of his departure from thatassociation, and so the question of whether he can rack up a debt andthen leave, never arises. The bank is held in common in the memories of all members of this economy. This is not the case only where the group issmall or its members known to each other. Such exchange withoutrecords is the basis of all exchange. Exchange made explicit by records isa function of exchange which runs without explicit record-keeping.
Mohammad Grameen
Banker to the Poor: Creating a world Without Poverty 
(PublicAffairs 2003), Beatriz Armendáriz, Jonathan Morduch
The Economics of Microfinance
(MITPress 2007).
Keeping records has its own cost. Groups evolve ways to avoid thesecosts by avoiding the keeping of explicit records, dealing not in money(the formal system) but in credit, the informal system, because it ischeaper, faster and more exclusive. We use money because it saves onthe effort of paying honour specifically and fully, but we use the informalsystem of favours, that works on an implicit understanding of credit andhonour, because it saves on the cost of explicit accounting represented bymoney. ‘There are purely cognitive costs of organising and monitoringtransaction, such as the calculation of bill.’ 
No calculation is made withinthe family, the association or firm. ‘The function of the firm is not simplyto maximise transaction costs, but to provide an institutional frameworkwithin which the very calculus of costs is superseded.’ 
The informal andformal systems are not necessarily rivals. Without simultaneous use of both systems, and tactical decision-making about when to resort toexplicit record-making and when not, both systems would grind to a halt.
The firm
There are two reasons why we have to go to work. We go because we
to and we go of work because we
to. Let us think over thesecond since it is the neglected reason. We go to work because we wantto be with other people. Being a member of this company is the rewardwe seek. The firm bestows your identity on you and so your identity issecured. Belonging is everything. Being united to your fellowman is thefundamental union towards which every transaction gestures.We get a job, become an employee and come into relationship with theseother employees, our fellow members in this household. We join them, sothere is an unmediated form of reconciliation and united between us here.We go to work to be with our mates; a bond, of honour, of humour, holdsus together. We perform for their praise, and bound to one another by acommon distrust of some other group, our managers or customers. This isthe ‘economy of regard’.
 ‘Even the largest multinational corporation, even the largest factory ismade up of small groups, the paint shop, on the assembly line, or in theboardroom. In face-to-face settings the economy of regard kicks in.’ 
This elective household is a thing of many levels. Each member goes towork in order to sustain their position in it. There is no absolute securityof tenure. Together we play the game of deciding which of our fellows wewill combine against next and attempt to demote or eject; the frisson thisgives is part of our reward.
Geoffrey Hodgson
Economics and Institutions
(Polity 1991) p. 203
Economics and Institutions
p. 207
Landa Trust
 , Ethnicity and Identity: Beyond the New Institutional Economics of Ethnic Trading Networks, Contract Law, and Gift-Exchange
(Michigan 1995) p. 49 ‘It is implicitlyassumed in the standard theories of exchange that there are no costs in the making of transactions. In such a world of zero transaction costs, institutions such as money,middlemen, and the legally-binding contract would be redundant. Recent contributionshave emphasised the costliness of the barter exchange process and the positive roleplayed by money and middlemen in reducing costs.’ 
Avner Offer
The Challenge of Affluence
(Oxford University Press) p. 89

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