Anthropology of Money Research Paper

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Money, in various cultures and at various times in history, is defined primarily by what it does and secondarily by what form it takes. In anthropology, money falls into two major categories of cultural constructs: (a) special money which is used in a limited sphere of transactions and is also called special-purpose money, primitive money, or ritual money; and (b) general money used extensively in many social spheres but used primarily for commercial exchange, and also referred to as general-purpose money.

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1. Special Money

Many societies use objects to mark ritual transactions in limited spheres of social life such as marriage negotiations, religious offerings, or the acquisition of titles or ritual knowledge. The material item offered may be as varied as mats and bark cloth in Samoa, whale’s teeth in Fiji, woven rolls of feathers on Santa Cruz Island, clumps of tobacco among North American Indians or dogs teeth in the Admiralty Islands. However, such items, rarely circulate as a general form of money to buy land, labor, or commodities. The items are usually confined to exchanges within quite limited ritual spheres, but the nature of these spheres varies from one society to another.

The specialized uses of such money can be seen in traditional Ti society in Nigeria where magical rites could only be purchased by means of tugudu cloth or brass rods. The famous large stone money of Yap in the Caroline Islands was traditionally only used by aristocratic families in ritual transactions as a means of settling disputes; they were never used for commerce. Indian tribes in the northeastern USA used wampum as a means of sewing large belts with designs on them. These wampum belts were exchanged as a marker of major political events such as the union of tribes in the Iroquois Confederacy. Many forms of money, such as the rolls of feather money on Santa Cruz, were used primarily or exclusively in the sphere of marriage exchanges.

The close association of money with ritual and religious spheres of life persisted into classical times when temples served as the primary mints for making coins. Earliest coins carried religious images of the gods who protected the money. Athenian coins depicted the city’s patron goddess or symbols of her such as the owl. Roman coinage depicted Juno Montea, from whose name derive the modern words of ‘money’ and ‘mint.’

2. General Money

Of the main organizing principles of settled social life, general money was one of the last to develop, long after writing, bureaucracy, priesthood, metallurgy, and kingship. General money arose as a political creation of the state to organize and control commerce and to standardize taxation.

2.1 Origins Of General Money

Around 640 BC, the royal family of Lydia began issuing the first coins. Prior to the invention of money, most urban centers were organized and built in a manner that focused on a major temple, palace, or fortress. However, Lydia introduced the first cities centered on a marketplace that became common throughout the Greek world as the agora. Herodotus notes that it was not until after the state issued coins in Lydia that its capital, Sardis, became the first city to have a marketplace in its center.

As the state took over the control of money and it became secularized in the domain of politics and commerce, it began to lose its ritual functions, and a great tension between religion and monetary activity began. Beginning in the classical era of Greece and Rome, much religious, ethical, and philosophical literature has been critical of the influence of money and has advocated limits on its use and importance in society. This conflict appeared particularly in most of the religions such as Orthodox Jews’ reluctance to use money on the Sabbath, the Biblical accounts of Jesus driving the moneychangers from the temple, or the strict Muslim prohibition on interest. The same distrust of money appeared in the works of Aristotle who distrusted the market and felt that prices should be set not by the scarcity of goods but by the ability of the buyer to pay.

2.2 Functions Of General Money

General money is usually defined and explained by what it does within the commercial and financial spheres of life, i.e., by the economic functions that it fulfills in society. These functions include the use of money as a means of exchange, a method of setting or comparing value, a mode of payment, and a store of value. The degree to which items commonly called money actually fulfilled all three functions has varied through history according to the item, the culture, and the social circumstances.

2.2.1 Money As Exchange. The commonest function of money for most people is its use as a means of exchange; people use it to buy and sell. The woman, who comes to market to sell eggs with the hope of buying milk, does not have to find a person who only wants to exchange milk for eggs. By using money, the egg seller can sell to anyone who wants eggs and then use that money to buy from any milk seller in the market. The medium of money makes the transactions much faster, easier, and more efficient by separating the individual acts of buying and selling.

2.2.2 Money As A Store Of Value. Money further separates the buying from the selling act by allowing a seller to exchange something for money, and then to keep the money without necessarily buying anything. The egg seller may wish to save up to buy a motorcycle or camel. She could not do this by saving the eggs until she had enough to make such a large purchase, but by converting her weekly production of eggs into money, she can save the money far more efficiently and reliably.

2.2.3 Money As A Means Of Setting Value. Just as money is a means of establishing the relative value of eggs, milk, camels, and motorcycles, it also allows a value to be set on a great variety of goods that cannot physically be taken to a market square or store for sale. People can use it to set the value on an hour or month of work or for the sale or temporary use of a building or parcel of land. It can be used to set the value of goods that never exist such as the potential earning power and emotional value of a person killed in an accident or of damage to future sales caused by malicious slander. Money can be used as easily to purchase illegal goods and services as to set the price for the forgiveness of small sins or free a soul from eternal damnation.

2.2.4 Money As A System Of Keeping Accounts. Only 8 to 10 percent of the world’s money actually exists in the form of paper or coin. Most of it exists in the form of numbers contained in accounts. The hours of work a person performs is recorded in money terms in an account from which it can be drawn out to pay mortgages, make loans, or be lent out for interest. Money is the conceptual medium that allows this easy movement between hours of work, rent, buying a home, borrowing to take a vacation, or negotiating a contract to kill a rival.

2.3 Forms Of General Money

After categorizing money by function, the second most important categorization is according to the form or material from which it is made. How money performs its functions is always limited by the form it takes, and this can be as varied as slips of paper, sea shells, electronic bits, ink entries in a journal, chunks of metal or edible commodities such as salt, rum, or cacao. Money—like the calendar and the system of measurements—is a cultural construct that may have arbitrary aspects, but to function properly, it needs stability and predictability. As long as people agree on the system, time can be as easily measured by the sun as by the moon, and money can be as easily calculated in feathers and shells as in silver grains.

2.3.1 Commodity Money. In addition to the items used as special money, societies have used many common commodities for money. These have included rice in the Philippines, tea bricks in Mongolia, coconuts in the Nicobar Islands, furs in Alaska, sugar in the Caribbean, maize in Guatemala, cacao in Mexico, almonds in India, and barley in Babylonia. In the West alone, many different commodities have been used such as salt (from which we derive the word ‘salary’), deer skins (‘bucks’), and cattle (‘fee’).

Although commodities serve as a good medium of exchange, they are frequently awkward to transport, and their utility as a store of value depends on their perishability. The salt dissolves in water, the rice rots, and people drink the rum. Commodities usually exist in hierarchies of which metals rank the highest because of their durability. Metals such as copper, tin, bronze, gold, and silver proved to be both a good medium of exchange and a holder of value as well as an easily transported item. Among the metals, silver and gold ranked as the most valuable because of their scarcity combined with the relative ease with which they are mined and used.

Commodity money almost always operates in conjunction with a money economy and not as a self-contained or isolated economic system. When faced with a lack of currency, American colonists, who were already part of an international monetary system, used tobacco in the eighteenth century. Under communist rule in the twentieth century, Romanians used cigarettes, and in wartime a number of commodities from sugar and chocolate to butter and oil circulate as a better means of exchange than the national currency. Because commodity money arises spontaneously in societies accustomed to using money, but temporarily unable or unwilling to use the general money, commodity money will probably continue to play a major, although episodic role, in times of warfare and other forms of social upheaval.

Anthropologists have frequently used the term ‘primitive money’ to designate both commodity money, which can occur in any type of money system at any time, and ritual or special forms of money, which usually occur in societies that are not fully integrated into the world commercial system. The confusion arose because traders and merchants often transformed special money such as brass rods among the Ti or Wampum among North American Indians, into a primitive form of general money in order to connect the previously more isolated group into the emerging world economy.

2.3.2 Paper Money. The Chinese invented both paper and printing which were combined to produce the first prototypes for paper money which did not become a general form or money until the Mongol conquests of the thirteenth century. The nomadic Mongols seized on the concept and organization of paper money as more efficient than coins for administering a large empire with a large economy. Merchants and peasants resisted the imposition of paper money, and only the great power of the Mongol rulers and their enforcement of capital punishment made the subject people willing to use it. The Mongol Empire ended by 1368 with the fall of its Yuan dynasty in China. The Ming dynasty stopped printing paper money and soon stopped accepting it in payment. The paper money system collapsed, but it was picked up during the Renaissance in Europe where it had great appeal to the Italian bankers, and was later taken over by central banks issuing paper money backed by the rising power of the state. The development of banking and the newly developed paper money system destroyed feudalism, changing the basic organization of society from one based on heredity and the ownership of land and feudal rights to a system based on money and the ownership of wealth through stocks, bonds, and other paper instruments of ownership.

2.3.3 Electronic Money. Throughout the twentieth century, the volume of money flow increased greatly with the introduction of new means of payment such as credit cards, the expansion of banking activities, and the introduction of electronic communications. To speed the movement of money of account, people had to rely increasingly on electronic modes beginning with the telegraph and spreading to the telephone and eventually to computers and satellites. Electronic money operates in the realm of money of account rather than with coins or bills, and it has made the transfer of this type of money much easier and cheaper than the transfer of cash or written documents.

By making money move faster, although not necessarily more efficiently, electronic money created new threats to the economies of the poorer nations. Because of currency speculation or currency flight, the value of the money, and therefore the entire economy, could be crippled within days rather than over the course of the months and years that it traditionally took for inflation to destroy it.

Electronic money produced a further stratification of money systems in which the richer people and richer countries use electronic money, while poorer countries and poor people use cash. Throughout the twentieth century, cash became increasingly the money of poor countries and of poor pockets within the highly developed economies.

3. The Meaning Of Money

As money has increased in importance in the globalized world economy, social scientists have begun research into the importance of money outside the economic realm. Such inquiries often use the concept of the ‘meaning’ of money. The ‘meaning’ of money may be found in the abstract role of money in social institutions, or it may refer to the differential impact of wealth and poverty or the absence and abundance of money in the lives of individual people or groups.

3.1 Noneconomic Aspects Of Money

Social scientists often analyze the meaning of money in institutions outside of the financial and commercial realms. Such analysis examines the functions, importance, and role in noncommercial spheres of life such as its social or psychological meaning. Zelizer (1994) examines the way people construct different categories of money according to its role in social relations such as courtship, gift giving, and inheritance. Doyle (1992) examines its role in the emotional life of the individual as money relates to levels of satisfaction, accomplishment, and security.

3.2 Alternative Explanations Of The Money Economy

Anthropologists have researched the different, and often noneconomic, ways that people explain money and commercial activity. Taussig (1980), Gudeman (1986) and White (1994) researched the way people such as Bolivian miners, Colombian peasants, and Turkish factory workers and other groups on the margins of the world system, conceptualize the economic world around them. Humphrey and Hugh-Jones (1992) pursued an analysis of the meanings associated with all forms of economic exchange.

Carrier (1997) showed how the same form of analysis that produces a greater understanding of the meaning of money and markets in simple societies can also be used to understand how people, including scholars and other professionals, in the fully developed Western economies think about and explain the economic world around them. All of these works seek a more holistic analysis of money and how it fits with the political, religious, psychological, and other cultural aspects of social life.


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