July 25, 2007

The Social Content of Money

Filed under: Economics — duncan @ 12:23 pm

Okay, so. Money is the medium of exchange and equivalence by which things can be traded. This seems fairly straightforward – as if money were a more or less transparent medium through which commodities, services, etc. can be observed.

But money is also the embodiment of a highly complex set of social conventions; it is part of money’s achievement to make these conventions seem like facts of nature. Money is a promise; I carry in my wallet a set of social relations. As long as we view money as an undistortingly transparent medium, it directs our attention away from the arbitrariness, contingency and complexity of these relations. This contingency relates in the first place to what counts as tradeable. In what contexts and in what ways can something be observed through the prism of money?

I’m reading Jack Harvey and Ernie Jowsey’s textbook ‘Modern Economics’. Page 9: “[The economist] cannot measure all goods. If he gives a value to the vegetables grown in gardens or to do-it-yourself repairs to cars, should he not logically include also something for housewives’ cleaning and cooking services? Because it is impossible to know where to draw the line, the economist simplifies matters by confining attention to those goods which are exchanged against money.” Pages 352-3: “the national income figure cannot be accepted solely at its face value… [It] is swollen when people pay for services which they previously performed themselves. Thus a married woman who returns to teaching but pays a woman to do her housework adds to the national income twice – although the only net addition is her teaching services.”

The line between paid and unpaid labour is not arbitrary: it is the product of our social conventions. One such convention is that domestic labour is, more often than not, female. This unpaid labour does not enter into most economists’ calculations. It falls outside the scope of value, as defined by most economics.

On The Economists’ website, their ‘Free Exchange’ blogger writes “the heterodox economists want an economics that helps them further their vision of a good society. We all want that, of course; but there is a limit to how much goodness even a discipline as fascinating and fulfilling as economics can provide. Economics should be able to tell us the likely outcomes of our plans for Building a Better Nation; it cannot tell us what that better nation should look like. So complaining that economics doesn’t give you the tools you need to attack the patriarchy seems to me oddly beside the point, like lamenting the fact that a banana cream pie won’t make you a better tap dancer.”

Which is of course oddly to miss the point. Here are Harvey and Jowsey, explaining the difference between positive and normative economics. “Positive economics limits itself to statements that can be verified by reference to the facts. Thus the observation that ‘the UK’s real national income in 1997 was larger than in 1994, is a positive statement. In other words, positive economics holds that any hypothesis formulated should be testable against empirical evidence.” (p. 10). But what counts as real national income is itself massively determined by social norms. And those norms are… yes… often products of the patriarchy. The complaint isn’t that economics doesn’t give us the tools to attack the status quo; it’s that those tools often operate in the status quo’s interests.

All this has been said a thousand times before, and my time would be better spent reading feminist economics than stating the crushingly obvious. But never mind.

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