Chapter 1 from the 1998 book Money and the Human Condition by Michael Neary and Graham Taylor.
It is inner space, not outer that needs to be explored. The only truly alien planet is earth.
J.G. Ballard, A User's Guide to the End of the Millennium (1996)
Money is the supreme form of social being, yet bourgeois social science makes no investigation into its social life. Economics, the discipline within which such an enquiry might be most expected, remains curiously uninterested, restricting itself to discussions of price, scarcity and resource, allocation, with no specific interest in money as such: 'economics is the study of how men and society choose, with or without the use of money, to employ scarce productive resources' (Samuelson, 1967, quoted in Rubin, 1973; emphasis added). Where money is of concern to economists they limit their research to questions about the (dys)functionality of money and its supply.
As for sociology, the discipline within which this book is written, despite its intimate links with classical economics (Parsons, 1951; Parsons and Smeltser, 1956; Schumpeter, 1987), and its preoccupation with investigations into social subjectivity, it has had little to say directly about money. In 1906 Georg Simmel produced the Philosophy of Money, but since then there has been little work done on this subject. The sociology of money has been constrained by the limits of its sociological inheritance. Writing inspired by a Weberian interest in social economics has been restricted to an investigation of money in its role as a rational instrument of exchange (Habermas, 1987; Giddens, 1990; Dodd, 1994). Durkheim's version of the importance of money as a 'social fact' is focused on the dysfunctionality of the 'social' without an investigation of the social content of that dysfunction (Ingham, 1996). In poststructuralist accounts, money exists as a discursive equilibrium in the discourses of power (Foucault, 1991); whilst in postmodern accounts its significance is found in its existence as a symbol of everything except itself (Derrida, 1992).
In recent years, however, there has developed an awareness of this deficiency within sociology. As the crisis of Western capitalism has deepened, and the tautologies of its sociological and economic explanations have proved increasingly unable to provide convincing explanations or to offer anything other than intelligent speculations, attempts have been made to combine the disciplines in a way that overcomes their methodological deficiencies. This has included, in particular, a reaction against the methodological individualism, positivism and the functionalism of mainstream economics. This has been done through a sociology which understands economic activity as a form of social action that is socially situated within social institutions (see, for example, the contributions to Granovetter and Swedberg, 1992). But as Ingham (1996) suggests, the signs are not encouraging. The advocacy of the interdisciplinary approach reveals the extent to which current liberal academics are aware of the limitations of each discipline, but the proposal that the limitations of each approach could be overcome through an ecumenical reconciliation avoids the question as to why they should have been separated in the first place.
Modern economics and modern sociology were both derived from political economy in the nineteenth century as denials of the material content of social wealth i.e. labour. Modern sociology is based on the same assumptions as modern economics (Clarke, 1991a), both being derived from the denial of the independent interests of the working class. This denial took the form of a political economy organised around subjectivist and individualistic foundations. In economics this took the form of the marginalist revolution. This replaced the classic cost of production theory with a subjectivist theory of value whereby distribution took place, not in terms of the laws of classical economics, but, rather, according to moral and political judgment:
The rationality of capitalism no longer lay in its dynamic efficiency as a system of production, but in its allocative efficiency as a system of provision for human needs . . . Marginalism derived the rationality of capitalism from the subjectivist rationality of the economic actor.
(Clarke, 1991a: 9)
But the space created by the demise of classical political economy was not completely filled by marginalist economics. A discipline was required that could explain non-rational action or action oriented to non-economic goals. This gap was filled by modern sociology which developed the notion of rationality within the same subjectivist, individualist and rationalised presuppositions as the new economics.
Any reconciliation between economics and sociology would have to refuse the basis on which they were originally conceived. In its more enlightened moments, the new economic sociology recognises that these deficiencies and the concepts of economic sociology they support presuppose definite social relationships. Ingham (1996) suggests that a way of overcoming these limitations might be based on forms of economic enquiry that contain an explicit sociological awareness. Such an analysis, he argues, is to be found within a combination of 'heterodox schools': a Keynesian sensibility, combined with sociology and Marxian political economy.
Keynesian economics, as Ingham suggests, implies a sociology utilising methodologies outside conventional economics. For Keynes, economics was 'essentially a moral and not a natural science . . . [dealing] with motives, expectations and psychological uncertainties' (Keynes, 1973: 297). But the importance of Keynes is not only that he disrupted the certainty of neoclassical assumptions through the creation of a sociology of (ir)rational individual expectations within a macroeconomic generalisation. The significance of his work to socioeconomic investigation is that he suggested, not simply another sociology for explaining human action, nor another interpretation of structuralist sociology, but, rather, that his work contained a sociology of money-capital out of which human action and structural processes are derived.
For Keynes, the primary role of money was to act as a store of value. The significance of this understanding was that, because of the ignorance and uncertainty that characterised economic activity, it was rational for money to be withdrawn from circulation at times when the store could not be increased. This suggested not only that economic irregularities might not be resolved by market mechanisms and would require intervention by the state, but, more fundamentally, it pointed to the deeply contradictory nature of money itself. In order to preserve itself as a store of value money would evacuate the exchange process and thereby precipitate economic crises. This pointed to the influential nature of money, as a form of social subjectivity, in that withdrawals and interventions of money had the capacity of a powerful social force which was able to determine human life and the way in which it was lived. But Keynes did not take this analysis of money any further, nor did he challenge the fundamental nature of capitalism.
The consequence of this was that Keynes was re-assimilated into neoclassical economics as a particular approach to economics rather than as a revolution in economic thought. This re-assimilation was associated with a denial of the idea that the state could regulate the harmonious development of capitalism, and was to be replaced with the notion that only the market had that capacity. The effectiveness of this model relies on the stability of money as an accurate means for the communication of information (e.g. prices) and, therefore, demands a predictable and stable monetary policy. In the pursuit of sound money all else must be sacrificed. Human need is subordinated to the law of money (monetarism).
It is in the area of Marxist theory that the greatest advances in the study of money as an important form of social existence have been most marked. This is not surprising given the centrality of money to Marx's project (Rosdolsky, 1980: 97–166). However, most of the writing on Marx's theory of money has been remarkably sterile, concentrating on the fetishised forms of money as institutional determinations (Aglietta, 1979; Croakley and Harris, 1983), or as a response to the logic of the capitalist system and, therefore, have focused on the formal contradictions of money rather than the contradictions within the system itself (Bonefeld, 1993). Most of these approaches have avoided Marx's important discovery about money: that money is simultaneously both the most concrete and the most abstract expression of the contradictory relations of capitalist production.
In Britain it is through the work of the Conference of Socialist Economists (CSE), inspired by the anti-Bolshevisms of Rosa Luxemburg, Ivan Illich Rubin, Evgeny B. Pashukanis, C.L.R. James and Roman Rosdolsky, that the study of money as a form of social subjectivity is most advanced. This focus on money has developed out of an awareness of the limitations of economics in understanding Marx's theory of value and, therefore, of explaining the basis of the power of capital. The distinctiveness of this debate is the way it presented labour, not merely as the source of surplus-value, but through its understanding of capitalism as the imposition of work through the commodity form. Thus, within capitalist social relations human labour is forced to exist as labourpower. Labour can exist only as a form of the wage, as money and through money. In this way money exists 'as the supreme social power through which social reproduction is subordinated to the reproduction of capital' (Clarke, 1988: 14).
The strength of this work is that it has critically examined the bourgeois assumptions of liberal social science, their contaminations in radical sociology, and has exposed the orthodox and crude Marxian derivatives to an immanent critique. It has done this by dissolving the critical categories upon which the bourgeois social sciences and orthodox Marxisms are constructed, without denying either the validity of these categories as empirical realities, or the need to provide a convincing explanation for their social existence. The approach contains an account of the processes out of which these empirical realities are derived, without erecting a new set of absolute categories within which to construct yet further speculation about the real nature of the social world. It is an 'open' critique in the sense that it recognises the closed nature of the theoretical world of liberal social science, whilst refusing to accept that social theory has managed to completely enclose that world.1
The social world is not subordinate to social theory. The methodologies of liberal social science and orthodox Marxism reflect the fetishised forms through which social reality exists and is explained. The 'open' account does not reduce this closed world and its explanations to the status of illusions or 'false consciousness', but undertakes to understand and explain the 'thingness' of the thing-like world — a world that is dominated by things and the science of things (liberal social science and orthodox Marxism). This 'open' account recognises the dialectical relationship between open and closed, thing and process, content and form, including the practice of theory and the theorising of practice. It recognises the speculative and abstract nature of liberal and Marxist social sciences as a reflection of the abstract and speculative world it is recording. But it does not accept the world in the abstract or the speculative. The 'open' Marxist account is not an abstract or speculative theory, but a theory of abstraction and speculation. There is a real world that can be known.
'Openness' has involved an investigation into the institutional forms of capitalist power and its insubordinations. Determined by the characteristics of power in the modern world the analysis has focused on the state, money and law, opening them up to a new and dangerous world of enquiry, which is neither sociology nor economics, nor even social theory. It is, rather, the immanent critique that exists within these categorisations and which demands to be heard; the possibilities of social life produced in and against the determinations of the institutionalised forms of capitalist power. It is thus a study of class struggle within a determining process. Writing against the liberal interpretations of these structural processes, which exist as unexplained, autonomous levels of functional social intervention, and in opposition to instrumental and structural Marxisms for whom these institutions act on behalf of the ruling class (Miliband, 1969, 1973), or which exist to assure the continuation of the capitalist process (Poulantzas, 1969, 1973), it has defined these institutions as complementary forms of the power of capital derived from the contradictory relationship between capital and labour:2
The underlying unity of these three differentiated and complementary forms of capitalist power was explained by Marx's theory of value, the three aspects being united in capitalist property, money representing the most abstract form of capital, whose power is institutionalised in the law and enforced by the state.
(Clarke, 1988: 15)
The theoretical advance of this work is that it explains that which is assumed by liberal social science — the separation between the political, economic and ideological aspects of social reality. It overcomes the crude economic reductionism of orthodox Marxism where the 'economy' is the foundation of all social life — either permanently or in the 'last instance'. It undermines the structural functionalism of bourgeois sociology and it provides a material basis for the power of modern society. Power in the postmodern or poststructuralist sense is thus not the outcome of discourses competing for a hegemonic position, but is derived from the law of money (capital), which defends itself in a range of ways — not least in the form of ideology (e.g. Keynesianism, monetarism).
This work has developed to investigate the institutional insubordinations of capitalist power (the working class), in a way that recognises the social subjectivity of labour and its dynamic power within capital. The basis of this dynamic is that workers' demands and capacities are central to the development of capital. Capital expands through the expansion of their needs and abilities; but, whilst central to the process, the demands and needs of workers are always subordinate to the needs and demands of capital. The power of capital is, therefore, precarious. It must constantly change its shape and identity in order to contain and exploit the needs and capacities of human labour. A part of this strategy is the avoidance of labour it can no longer control.
This avoidance has been examined in the 'open' Marxist account through an investigation of the way in which capital is forced to evacuate sites of capitalist accumulation and colonise other centres for exploitation. This has taken the form of an analysis of the institutional power of capital expressed as the world market or the global power of capital. The important conclusion from all this work is that the social power of capital is not embedded in any thing (e.g. gold) or in any person (e.g. the capitalist), or in any particular place (e.g. the nation-state), but is derived from the social power of money capital (Clarke, 1988: 17). Forms of social existence, such as gold, the capitalist and the nation-state, merely provide money-capital with a form of social identity and are not the basis of social power.
However, despite the importance of this work, there is one area of social existence that has not been investigated through the 'open' Marxist approach. This most immanent form of critique has avoided the most intimate form of social existence: a theory of the human condition. The Marxist account of the institutionalised forms of capitalist power has investigated the real nature of capitalist power, but not the real nature of human life. In its explanation of the institutionalised forms of capitalist power, it has made no attempt to account for the biographical or psychological character of human life. There are a number of reasons for this, not least the way in which the Frankfurt School introduced psychoanalysis as a substitute for class struggle, or the influence of Lacanian psychoanalysis on Althusserian structuralism against which much of the 'open' Marxist critique is aimed, and the way in which poststructuralism, and in particular the work of Foucault, has become obsessed with the body and the soul. The result has been a tendency for these approaches to accept alienation as a psychological condition rather than for them to situate alienation in the material reality of everyday life.
And yet a science of human biography was central to Karl Marx's project, which he pursued through the concept of real psychology:
It can be seen how the history of industry and the objective existence of industry, as it has developed is the open book of the essential powers of man . . . man's psychology present in tangible form; up to now this history has not been grasped in its connection with the nature of man, moving in the realm of estrangement, was only capable of conceiving the general existence of man — religion or history in its abstract or universal form of politics, art, literature, etc. — as the reality of man's essential powers and as man's species activity . . . We find ourselves confronted with the objectified powers of the human essence, in the form of sensuous, alien, useful objects, in the form of estrangement. A psychology for which this book, the most tangible and accessible part of history, is closed, can never become a real science with a genuine content. What indeed should we think of a science which primly abstracts from this large area of human labour, and fails to sense its own inadequacy, even though such an extended wealth of human activity says nothing more to it perhaps than what can be said in one word — 'need', common 'need'.
(Marx, 1975b: 354; emphasis in original)
A concern for the real nature of human existence is present in the early works of Marx, if in an idealised form, and is developed later through the concept of commodity fetishism where the abstract 'human essence' of the early writings are given an historical and material basis as a determined form (i.e. human individuality) derived from the social relations of capitalist production. Although Marx was never specific about this adventure in his later works, the search for the secret of human life is present within all his categorical investigations (e.g. class, value, commodities, labour, money, etc.
The presence of human life existing in alienated and perverted forms is present in all of the 'open' Marxist critiques of the closed categories of bourgeois social science, but biographical life is not made the subject of any particular investigation. In these studies money is still a remote and inaccessible substance, representing the outer-life of life. The purpose of this book is to investigate the inner-life of money-capital through a communist science. It will do so through a concrete analysis of the way in which human life is lived in, through and against its own institutional forms (biography). It is not just the institutionalised forms of capitalist power that exist as forms of capital, but also human life itself, institutionalised as individuated biography and personality. The struggle for human life is not, then, only in and against these alienated forms of power, e.g. in and against the state (London—Edinburgh Weekend Return Group, 1979), but also in and against life itself as biography or personality.
What this book suggests is that there is life in the social universe that has not yet been discovered: sustainable life (communism), now struggling to make contact with itself on an alien planet we call earth — 'the only true alien planet is the Earth'. This planet is becoming more remote and inaccessible as it attempts to escape its formal limits, as is the theory which attempts to explain this process (e.g. globalisation). The purpose of this book is not to follow capital in its attempts to avoid itself as it satellites around the globe, but to confront capital with itself by examining the concrete ways in which life is lived as money-capital and the limitations and possibilities of this human condition.
In chapter 2 I consider in more detail the inability of sociology or economics to understand or explain money. Working with the concept of alchemy, I argue that the explanation of money went underground at the moment that the self-expanding quality of money (capitalism) emerged. Whilst modern economics has got close to discovering the secret of money through the work of J.M. Keynes, it is constrained by its limited ambition and it has been left to Marxism to conjure up money's diabolical capacities. What Marx discovered is that the self-expansive and transforming nature of money-capital is not the result of its own innate potential or the genius of its representatives on earth (capitalists), but is, in fact, the product of the reordering of universal matter through objectified human energy. Money changes nothing. The real 'spirit' of money is alienated labour power.
In chapter 3 I explore the relationship between money and risk through an analysis of the dialectical interplay of the 'law of lottery' and the 'law of insurance' in the development of capitalist social forms. I argue that recent sociological analyses of risk are deficient as they fail to engage with the material crises and contradictions which have made the world a riskier place. It is argued that a principal feature of the development of modern capitalism was an attempt to socialise risks through the subordination of state and society to the laws and principles of the actuary. I explore this through the development of the Keynesian Welfare State which was an explicit attempt to 'plan' the development of capitalism according to the logic of insurance. I argue that the crisis of Keynesianism is simultaneously a crisis of the law of insurance which has resulted in the recrudescence of the 'law of lottery' in the postmodern global capitalist order. This enables me both to posit the emergence of the National Lottery in the UK in a wider historical and material context and to highlight the important relationship between risk and money.
In chapter 4 I examine the 'spirit' of labour power as a processed human form. In modern society human life exists as wage-labour, as a form of money-capital. Human life is constrained by the limitations of money and driven by its possibilities. Money is [anti-] oppressive. I explain this processing as a theory or real psychology (Marx, 1975b), a theory of human personality (Sève, 1975) and schizo-analysis (Deleuze and Guattari, 1977). I argue that this arrangement of human life appeared in the seventeenth century as biography. I examine the concept of biography through the first recorded literary biography, Daniel Defoe's Moll Flanders, and as aggregated biography in Peter Linebaugh's social history, The London Hanged: Crime and Civil Society in the 18th Century. I suggest that studying human life as a processed form of money-capital (i.e. as a real psychology) opens for us the possibility of a theory of anti-oppression that is denied by a metaphysical concentration on ethics, values and morality. The concrete significance of this chapter is as a response to current tensions within criminological discourse and practice in the Probation Service.
In chapter 5 I explore recent attempts to abolish money through the introduction of local exchange and trading systems (LETS). It is argued that advocates of LETS fail to go beyond a moral or ethical critique of money, and thereby fail to grasp either the potential or the limitations of LETS initiatives. I argue that Marx's attack on the Proudhonists, who similarly believed that the evils of capitalism could be overcome via the reform or abolition of money, remains highly pertinent in assessing the significance and potential of social movements such as LETS. In particular, I demonstrate the value relations underlying LETS and the way in which LETS money remains as money in both essence and form. This is used to highlight the impossibility of true love or recognition amongst LETS participants, and thus the impossibility of building real communities on the basis of LETS networks.
In the final chapter I visit the 'land of the cyborgs' (the alien planet earth) in order to argue that the infestation of the world by money-capital has reduced the planet to an alien place inhabited by man-made machines and machine-made men. This mechanisation of men and this humanisation of machines is traced through an ontology of money-capital and the self. I conclude by arguing for a sustainable form of human life: communism, which is recoverable from within the alien world of money.
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