Money and Credit

by

Kurtulus Gemici

• LAST REVIEWED: 21 January 2016
• LAST MODIFIED: 21 January 2016
• DOI: 10.1093/obo/9780199756384-0139

Introduction

Money is a central institution in modern economies. It quantifies economic worth according to a common metric; it plays a fundamental role in the commensuration of goods and social relations. As such, money is a social technology that permeates virtually all aspects of economic activity, and economic exchange in market societies would be impossible without the use of money. Yet neoclassical economics—the dominant school of economic thought— takes the most astonishing features of money for granted. Thus, in neoclassical economics, money is supposed to fulfill its functions without the interference of social and institutional constraints, and the cold logic of monetary computation is not supposed to admit cultural factors. Sociological analyses of money and credit pose a fundamental challenge to the conceptualization of money in neoclassical economics. Instead of seeing money as a neutral veil—a mere lubricant of economic exchange—sociologists examine how money is embedded in social relations, how social institutions shape money, and how monetary relations affect society. This research agenda yields important insights on the manifold dimensions of money in society. For instance, sociological research is particularly successful in examining how social factors such as trust underlie the functioning of money and credit in modern economies. In addition, there is a significant body of sociological findings on how cultural meanings and power relations shape the use of money in everyday life. In recent years, an increasing number of sociologists have begun to pay attention to the complex relations between monetary systems and politics. Sociologists who approach money as a topic of study often identify with other subfields of sociology, such as cultural sociology, economic sociology, and sociology of finance. As such, the research on money benefits from the venerable traditions and methods in other sociological subfields.

General Overviews

Ferguson 2008 offers a lively introduction suitable for a general audience by situating the scholarly analysis of money and credit within the historical development of finance. A particularly useful starting point is Carruthers and Ariovich 2010, which caters specially to researchers and students who are not familiar with the sociology of money and credit. Eagleton and Williams 1997 approaches the long and fascinating history of money and credit across cultures and geographical regions from the perspective of numismatics and archeology. Graeber 2011 digs into the same historical material but with a critical focus on the relationship between morality and money—a question that also motivated classical sociological analyses of money. Graeber’s book is also a useful introduction to the anthropological tradition on money and credit. Given the interdisciplinary nature of research on money and credit, Ingham 2005 fills an important vacuum by combining classical and contemporary readings from several social disciplines. The introduction to the edited volume offers a clear survey of the disciplinary differences within the scholarly literature. For the ontology of money, the most contentious topic in the study of money and credit, Smithin 2000 provides excellent summaries of virtually all important schools of thought.

• Carruthers, Bruce G., and Laura Ariovich. 2010. Money and credit: A sociological approach. London: Polity.

  An introduction to money and credit firmly situated in contemporary sociology. Surveys classical as well as contemporary works on the history of money, the social meaning of money, the distribution of credit in society, and the role of credit in capitalist corporate economy.

• Eagleton, Catherine, and Jonathan Williams, eds. 1997. Money: A history. New York: St. Martin’s.

  An excellent introduction to money’s origins, meaning, and uses in history. While the book aims a general audience, its global coverage and informative essays make it an essential reading.

• Ferguson, Niall. 2008. The ascent of money: A financial history of the world. London: Penguin.

  Offers a bird’s-eye view of the coevolution of money and finance. While the historical narrative is uneven, The Ascent of Money provides an entertaining and accessible overview for a general audience. Ferguson’s accounts of crucial landmarks in financial history, such as the emergence of credit markets and commercialization of derivatives, are particularly informative.

• Graeber, David. 2011. Debt: The first 5,000 years. Brooklyn, NY: Melville House.

  Graeber’s book is about morality and the market; it asks fundamental questions about morality when markets quantify an increasing proportion of social life. Along the way, his book presents a critical history of money, monetary thinking, and financial relations in diverse societies. While the book is resolutely radical and brilliant in its synthesis, its universal history has been criticized for failing to recognize the diversity and fluidity of money in everyday life.

• Ingham, Geoffrey, ed. 2005. Concepts of money: Interdisciplinary perspectives from economics, sociology and political science. Cheltenham, UK: Edward Elgar.

  Wide-ranging selection of classical and contemporary works on the conceptualization of money. While the emphasis is on contending perspectives within economics (neoclassical, Marxist, and heterodox schools of economic thought), the volume also covers sociological approaches to money.

• Smithin, John, ed. 2000. What is money? London: Routledge.

  Contains essays representing diverse viewpoints on the nature and origins of money. Particularly useful are the introduction by Smithin, Ingham’s analysis of the social origins of money, and Wray’s account of modern money. Parguez and Seccareccia’s chapter offers an accessible introduction to the circuit theory of money.