The Human Economy 30 July 2007

Proposal for a book that never took off (2003). Now I will be starting again through a keynote address for a conference on Rethinking economic anthropology at LSE in January 2008. The founders of neoclassical economics, such as Alfred Marshall, started out with the same broad style of questioning as their classical predecessors; but their speculations on human nature and society subsequently dropped out of the modern discipline, leaving it to anthropologists and others to pick up on these questions. Anthropologists aim to produce an understanding of the economy that has people in it, in two senses. First, we are concerned with what people do and think, both as workers or consumers in economies dominated by large-scale organizations and when left relatively free to be self-organized as farmers, traders, managers of households or givers of gifts. Second, our interest is — or should be — in the universal history of humanity, in its past, present and future. Somehow we have to find meaningful ways of bridging the gap between the two. There are of course many economies at every level, but economics is itself universal in pretension and so anthropologists too, in giving priority to people’s lives and purposes, aspire to a degree of intellectual unity.
The Human Economy: people, machines and money in our time

 

Introduction

Chapter 1 An economy for all the people

 

Part 1 World economy

Chapter 2 Studying world society

Chapter 3 The world we live in now

Chapter 4 Revolutions, liberal and neo-liberal

Chapter 5 The age of money and unequal property

Chapter 6 From urban to national economy

Chapter 7 The formation of a world economy

 

Part 2 Economic anthropology

Chapter 8 The barter origins of money: a fable

Chapter 9 The humane politics of Marcel Mauss's The Gift

Chapter 10 The social forms of economic action

Chapter 11 The unity of production and consumption

Chapter 12 Machines, work and time

Chapter 13 Bureaucracy and the informal economy

Chapter 14 Other people's money: the banks

 

Part 3 Economic democracy

Chapter 15 Capitalism and economic democracy

Chapter 16 The future of the cultural commons

Chapter 17 And if the people issued their own money?

Chapter 18 Movement as a human right

Chapter 19 People against economic inequality

Chapter 20 The new commonwealth

 

 

Introduction

 
Civilization is conceived of largely as an economy these days. And that is a good thing, since most people care a lot about their own economic affairs. The days are long gone when politicians could concern themselves with affairs of state and profess ignorance of what the masses are up to in their livelihoods. Hence President Clinton's famous memo to himself, "It's the economy, stupid!" For millennia, economy was conceived of as domestic, as household management. Then, when money, machines and markets began their modern rise to social dominance, a new discipline of political economy was born, being concerned with the public consequence of economic actions. For over a century now, this discipline has called itself economics and its subject matter has been allegedly the economic decisions made by individuals, not primarily in their domestic capacity, but as participants in markets of many kinds. People as such play almost no part in the calculations of economists and find no particular reflection of themselves in the quantities published on the economy by the media.

 
The main aim of this book is to produce an understanding of the economy that has people in it. This makes the approach broadly anthropological, in two senses. First, I am concerned with what people have done by themselves, especially when free of control by large-scale organizations. The ethnographic tradition privileges experience of life over abstract ideas. Second, my interest is in the history of humanity as a whole, our past, present and future; and my examples are drawn from all over the world, even if the principal focus is on Western Europe and North America. Somehow we have to find meaningful ways of bridging the gap between the two. There are of course many economies at every level from the domestic to the global and they are not the same, but I write of The Human Economy in the singular because the prevailing approach to economic life is itself universal in pretension and because giving priority to people's lives and purposes lends a certain intellectual unity to my efforts. At the very least, this book will show that claims for the inevitability of mainstream economic institutions are false.

 
The twentieth century saw a disastrous experiment in impersonal society. Humanity was everywhere organized by remote abstractions — states, capitalist markets, science. And, as if that were not enough, the main common preoccupation was war. For most people it was impossible to make a meaningful connection with these anonymous institutions and this was reflected in intellectual disciplines whose structures of thought had no room for people in them. Whereas once anthropologists studied stateless peoples for lessons about how to construct better forms of society, such an exercise now seemed pointless, since we were all powerless to act. Of course, human beings everywhere did their best with a bad job, seeking self-expression where they could — in domestic life and informal economic practices. But the gap between individuals and society widened, even as most regimes claimed that they governed in the name of the people.

 
What are the possibilities for greater economic democracy at this time? Democracy is a process where the people who are most affected by decisions take the largest part in making them. There is a lot of talk of democracy, but not much of it in practice. This is partly because political rights have been granted to citizens without the economic means of exercising them equally. Until people are in a better position to take responsibility for their own economic affairs, there is not much hope that their societies will work as political democracies.

 
Part of the problem is intellectual. People's lives do not figure prominently in the theorems of economists. If we are to make a meaningful connection with the economy, we must understand it in more human terms. Economics is also not very good with machines. Yet the world of economic possibility depends on whether we can harness the machine revolution to human ends. Curiously enough, economists are not very good with money either. Traditionally liberal economics considered money to be an insignificant lubricant of exchange; and in any case the dominance of money in contemporary social and spiritual life is a topic too big for the economists to handle. So the three most important components of modern economic life — people, machines and money — are not properly addressed by the academic discipline devoted to its study.

 
My first task is to identify what might be meant by the term 'economy'. Examination of dictionaries of English reveals that the word and its derivatives (economic, economical, economics, economist) seem to have a number of separate, but overlapping referents. These include:

1.      Order

2.      Conservation

3.      Practical affairs

4.      Money, wealth

5.      The circulation of goods and services

6.      A wide range of social units

 
The word comes from Ancient Greek, oikonomia. It literally meant 'household management', the imposition of order on the practical affairs of a house, usually a large manor house in the countryside with its slaves, animals and farms. Economic theory then aimed at self-sufficiency through careful budgeting and the avoidance of trade, where possible. The market, with its rootless individuals specialized in money-making, was the very antithesis of an economy that aimed to conserve both society and nature. So in origin 'economy' emphasized the first three above while focusing on the house as its location. It had nothing to do with markets or money or with wider notions of society.

 
This ideal persisted in rural Europe up to the dawn of the modern age. The problem is that the economy has moved on in the last 2,500 years and especially in the last two centuries. In particular, an eighteenth century revolution in ideas led by Adam Smith switched attention from domestic order to 'political economy' and especially to the functioning of markets using money. Instead of celebrating the wisdom of a few patriarchs, Smith found economic order in the myriad selfish acts of individuals buying and selling commodities, the famous 'hidden hand' of the market.

 
Two things happened next. First, the market was soon dominated by large businesses commanding more resources than most, a system of making money with money eventually named as 'capitalism'. One of capitalism's chief features is a focus on growth, not on staying the same. Then states claimed the right to manage money, markets and accumulation in the national interest. And this is why for us 'the economy' usually refers to the country we live in. The question of world economy has encroached on public consciousness of late; and almost any aggregate from associations of states like the European Union to localities, firms and households may be said to have an 'economy' too. In the process, 'economy' has come to refer primarily to the money nexus of market exchange, even though we retain the old sense of efficient conservation of resources.

 
So part of the confusion with the word 'economy' lies in the historical shift from the self-sufficiency of rural households to complex dependence on urban, national and world markets. But that isn't all. It is by no means clear whether the word is primarily subjective or objective. Does 'economy' refer to an attitude of mind or to something out there? Is it ideal or material? Does it refer to individuals or to collectivities? Perhaps all of these — in which case, we should focus on the links between them. If the economists argue that economy is principally a way of reasoning, we can hardly say that all those people who talk of economies as social objects are 'wrong'. Moreover, if the factory revolution shifted the weight of economy from agriculture to industry, the economic mainstream has come in recent decades to consist of electronic digits whizzing around the ether at the speed of light. The idea of economy as provision of material necessities is still an urgent priority for the world's poor; but for a growing section of humanity it no longer makes sense to focus on economic survival. The confusion at the heart of 'economy' reflects not only an unfinished history, but wide inequalities in contemporary economic experience.

 
Nor is the matter finished there. This book is written in English and so have been most of the foundational texts of economic theory and method. The term 'economy' is as specific to the English language as 'society' is to the French. If the various meanings of the word are obscure in English, their translation into most other languages is even more problematic. In German, for example, the nearest indigenous term is either Ökonomie, referring mainly to household budgeting, or Sozialpolitik, with a meaning closer to public policy than economy in the English sense. Britain and America have dominated global capitalism in the nineteenth and twentieth centuries respectively and so, gradually, the peoples of the world have come to absorb something of their economic terminology into their usage.

 
All of these issues and more have to be addressed if the expression 'human economy' is to be made meaningful, if we are to be able to talk about how world society might be considered as an economy. We must start from our moment in history, the world we live in today. So far, since the millennium, we have witnessed the collapse of the 90s economic boom and the start of a 'war against terrorism'. September 11, 2001 was a turning point for sure. The world is in movement, but it is not obvious how we are to understand that. The second half of the twentieth century brought the peoples of the world closer together, mainly through a network of markets, transport and communications. We also became much more unequal in this period. The first part of the book then develops a vision of world history anchored in the present, so that we might understand where we have come from and where we might be going.

So many of our methods for studying society were formed by the need to understand the new nation-states of the last two centuries, that it takes a considerable shift in perspective to study world society. Here I attempt a 'cubist' description of the world we live in, based on my own lifetime's experience of movement. It seems as if the world is subject today to a neo-liberal revolution imposed from above. What is the relationship between this and the liberal revolutions that inaugurated the modern age? This in turn requires us to understand how capitalism and the machine revolution were built on the unequal society bequeathed by 5,000 years of agrarian civilization. Our world is older than the ideologues of modernism claim, even as the last few decades have brought humanity into a single interactive network that is entirely new. The key to making sense of this is to see how national monopolies of economy and society were formed 150 years ago and why they may be giving way to larger and smaller processes now.

 
If the first part of the book paints a picture of world history on a large scale, the second develops some abstract principles of self-organized economy from the evidence of people's economic lives offered by anthropologists and others. To be human is to be individual and collective at once; the difficult part is to find social forms that are conducive to both. This emphasis on integration is carried over into a critique of the separation of production and consumption in capitalist economy. Following Marx, our task is to understand how the present phase of the machine revolution might support more democratic economic forms. If time is now often scarcer than material goods in space, this lends added credibility to the labour theory of value today. The anthropology of gifts and barter in stateless societies can still offer a surprising perspective on contemporary forms of market exchange, as well as on the origin myth of modern economy. Bureaucracy is the essence of impersonal society and, in the late twenitieth century, it came to be seen that people related to its dominance in a variety of self-organized ways through 'the informal economy'. Finally, the recent literature on American finance houses sustains an ethnographic account of how bankers behaved during the 'greed' years — with our money.

 
So, with these perspectives from economic history and anthropology in mind, the book then addresses the prospects for economic democracy in an age when capitalism appears to be reaching its apotheosis as a world system. Capitalism looks backwards to the unequal society of its birth and forwards to the economic emancipation of humanity. We need to bring up-to-date the legacy of the liberal revolutions that inaugurated the modern age. This means being selectively for and against capitalism. But our greatest challenge is to overcome the old regime of agrarian civilization whose institutions still dominate world society. I examine three concrete arenas of struggle where our common future is being fought out most keenly today. The future of the cultural commons (software, music, law, GMOs etc); attempts to make money by ourselves ('people's money' or community currencies); and freedom of movement for international labour as a corollary of capital's freedom. The book concludes by assessing the conditions for establishing a new commonwealth. This will have to be based, at the most inclusive level, on principles of world economy drawn from what people already do and have done.

 
There is a new audience for English as the world language. It is time that the spirit of Milton, Locke, Smith, Paine and Jefferson informed the search for a new economy today, an economy for all the people.