Oikonomics: a social life of money

Cutting money down to size

It looks as if money is going to be centre stage for the coming election. However, this time it seems to be about that ‘it’s the economy, stupid’ as producing money (the work of the economy) takes a back seat for the problem of spending money (we haven’t got).

If the success of New Labour was built on the back of the aspirations of the new consumer generation, where the creation of an abundance of money was seen as going hand and in hand with the realization of individual and social values, all three parties seem to be at a loss for how to talk about money when it is no longer abundant – it is now scarce.

Labour in this respect are acting a bit like parents who aren’t being honest with their children about the extent to which their collective lifestyle is about to change. Daddy and Mummy (Brown and Harman!?) are still making the pretence of going out to work, but unfortunately their Uncle Darling (who is also their bank manager) knows the real truth. So now we are all sitting round the kitchen table wandering whether it is the family holiday, Dad’s new car or the cat which has to go.

The Conservatives seem to be taking a more puritanical line (ironic given Brown’s Presbyterian roots, but then sons always rebel against their father’s attitudes especially when it comes to money) with the comfort of being in opposition and therefore not actually spending any money at the moment; at least if you discount certain of their number with a penchant for duck houses and subsidized salads.

So why doesn’t Labour make it a collective problem? Surely we are all responsible for the ‘credit bubble’ in our own small way?

Perhaps it is a reflection of what Mandelson referred to on Monday when talking about the positives of Brown as PM – his ‘big picture’ mentality and ‘long term decision making’. You meet people like that all the time inside the top of organizations, politically astute operators who concern themselves with the internal system rather than the customer at the door. Labour in this respect have become institutionalized, unable to envisage a different reality to the one they so fervently believe in and need to cling on to when all around the world is changing.

Do the Conservatives get this new reality? They are certainly more open to the idea that extending the idea of ‘ownership’ in society is a good thing for encouraging both individual entrepreneurship and individual responsibility but I can’t help feeling that the ‘Conservative’ instincts will be to go back to what worked in the past rather than being truly open to creating wholly new mechanisms for collectively ‘nudging’ us towards a more sustainable balance between what we produce and what we desire to consume. An instinct which seems to be showing itself in their ‘if you see Sid’ considerations.

The LibDems by contrast seem to be enjoying themselves imagining all sorts of frugal futures, but again are very short on ideas for how we as individuals are going to be enabled to make this a reality. Clegg doesn’t seem to have thrown off his Management Consultant past, producing reports that are reminiscent of the bad old days when employing consultants really was like lending someone your watch to tell you the time.

Thatcher may have been famously misquoted that ‘there is no such thing as society’ (there are only families and individuals) in her Readers Digest article, but by the same token the can be no such thing as society without individuals getting together to make it happen. Until we understand what it is that people need to get control of their money, we won’t understand the collective levers that will help get us back on track. It is not only politicians who have had their world of money shaken to the core, and like politicians there seems to be little effort for re-thinking and re-making money so that it fits with what we, collectively are trying, and need, to achieve.

The Last Days of Lehman's

The familiar tragic character traits and flaw were in evidence in BBC2’s dramatization of "The Last days of Lehman’s (perhaps better titled the fall of Lehman’s?). Hubris, blindness (an oft quoted trait of Dick Fuld), uncontrolled anger, regretful nursemaids (Paulson) and existential angst laid blame for much of the financial crisis at the door of the frailty of human morality in the face of irrational animal spirits. As illustrated by the required film based ‘philosophical’ quotes from Fight Club by analysts working through the night to value AAA securities based on essentially fraudulently acquired mortgage debt – i.e. something really does come from nothing – you were left feeling perhaps suitably ‘empty’ feeling about having digested a dramatic exposition of what happened to our money.

It reflects our obsession that our motivations and ‘truths’ come from within the self and so we must look no further than the selfish individual to find the root cause of our predicament. This explanation plays well to our popular view of psychology and post-death-of-god view of our essentially human flaws (such as believing a diet coke will alleviate the effects of a donut) and hence why it is easier to say you will rein in such behavior by limiting bonuses and ‘punishing’ bankers.

However, this is a convenient ‘truth’ which hides a more politically inconvenient alternative reality where money is no ‘neutral veil’ over our diverse social relations and cultural beliefs and practices. We all share in the creation of what money is (and all its forms) and shape its future through our usage. It is a social and cultural thing – a product of our societies not some neutral medium. No researcher worth their salt would assume that a similar global technology – the mobile phone – would be used and valued in the same way in different cultures; we have gotten used to the idea that such things are adapted by their users to fit their cultural reality not blindly adopted in a cultural vacuum of consumerism.

The effect of globalization of money practices (rather than money) has not been, as was believed would be the outcome, to make money more ‘efficient’ and ‘rational’ through its management within the "market", but rather to link up a plural meanings of money across the globe, between East and West, Developed and Developing, Old world and New world – a truly chaotic tower of Babel built on the belief we are all talking the same language and meanings of money. It is the contradictions of values rather than imbalances of value which drive bubbles and crashes.

Perched on the top of this tower were the investment banks, busily producing money from a variety of cultural contexts and homogenizing it into rational, liberated and technologized packages which they could sell and create yet more money. However, when the social and economic reality of this production were called into question or simply failed to materialize then the emptiness of the promises which underpinned the value of what they were trading was laid bare.

The point was made in the "docu-drama" that no bank before and no bank after ("AIG are in the building," says Paulson, as he calmly pulls the plug on Lehman’s) were allowed to fail by the state. Why? What interest does the state have in preserving this myth of credit money as a tradeable essential commodity? Is it perhaps because states are the biggest credit junkies of all? Surely not!

Lehman’s may have been no more than a tragic-comic interlude in the history of money, but the fact is that the state was not prepared to pay the price of allowing money to be seen in all its plural, cultural, contradictory being. Instead we have replaced the abundance of banks with the abundance of the state – just don’t look too closely at the material fundamentals upon which such abundance is based.

Amartya Sen: The Idea of Justice II – learning to trust the individual?

I measure the quality of a book on the slowness of the read rather than for its page turning quality. Slowness is a function of the amount it makes me stop and think. I am conducting a project on Adult Social care which sits right at the intersection of his thesis and approach – what are the barriers to individuals taking control of their own social care (budget and services) and what are the opportunities which would justify the initial investment required to make that all happen?

Essentially, the answer is that the institutions that define and provide ‘care’ (i.e. the state, the various departments with social objectives, the local service providers, and importantly the third sector) need to learn to trust individuals. The problem is that this requires an almost Kierkegaardian ‘leap of faith’ to move from abstract managerialism with its implicit moral structures and negative risk assumptions to a more concrete ‘lived’ philosophy; no longer framing the question for the state vs. the individual as ‘what is the life he/she/we ought to live?’ but instead asking ‘what is the best life he/she/we can live?’.

Sen appears to be advocating a type of social existentialism – championing the individual in the face of normative state sponsored programming which assumes it has all the answers; if only people would listen to what they had to say! Just as Sartre wanted to wake us up to the reality of freedom and choice and the implications of ‘not choosing’ (i.e. following the herd), so Sen’s book can be read as a wakeup call to examine the implications of the state feeling it must be ‘providing choice’ to its citizens – i.e. setting out the paths we must follow to a ‘good life’.

The problem is that the state provides choice in the Hegelian sense of ‘both/and’ – this creates the double speak and contradictions inherent in the third way. The state doesn’t want to offer real choice but a safe choice. However, you cannot talk about individuals being responsible for their actions and then take away responsibility for their choices. What people at the sharp end lack is not institutions but practical examples – role models – from which they can identify the best life for them to follow. In fact, the more institutions take responsibility for those individuals the more they become programmed that freedom = negative risk; the risk of failure, rather than freedom = positive risk; the risk of success. No wonder they call being on benefits ‘living in the waiting room of life’.

Hummus and Money

Pragmatist beat me too it with the historical account of Thomas Barker’s meet up on Wednesday for open finance.

I am not sure if I answered the advertised question – i.e. why is banking like the music industry of the nineties? – but we did have a thought provoking debate about the meaning of money in contemporary UK culture nevertheless – specifically around people who are (in my view) ‘living without money’ in what one recent research respondent called ‘the waiting room of life’.

Pragmatist is also right to focus on the two things which banks (and the music industry) don’t get or don’t want to get about our relationship with money. We don’t exchange (or share) money solely like rational economic beings and importantly neither do we aspire to be such. This is the disconnect of the Neo-liberal economic project (if such exists) – I don’t want to be an actor directed by my rational judgment, to paraphrase Life of Brian – I want to be an individual (or something meaningful in a cultural sense at least). Trying to convince me to act or be otherwise will generate counter intuitive and counterproductive responses which are designed to subvert the perceived lack of control over my own destiny (which this ironically liberal inspired philosophy requires). Rational decisions don’t make you free – just free to choose from what I am given. Discuss.

Secondly ‘financial services’ is a construct of the old model of consumer culture – the one based on material value of goods produced by willing consumers who seek a Whiggish form of utility, social progress and personal development. The problem with this model is its inherent contradictions (which Marx correctly identified would create its own self destructive tendency) but that is not too say that the death of the consumer means the end of consumption as we know it. Money can be created in the image of whatever normative values your wish for as a society as can the desire to consume. Money and consumpton are merely the means to an end - they are an Obama style 'blank canvas' upon which we can project our own values.

The shift I was trying to communicate was from what a product does to what it creates. Moving to this alternative value equation creates the opportunity for new business models and entrepreneurial activity which challenge the status quo with a new avant garde of money.

It is interesting that the most common google search that brings someone to a site discussing money is ‘Living without money’. There are forms of money it is possible to live without but to do away with the concept of money completely is to misunderstand its potential for the creation of new social and cultural value to fill the hole created by the financial crunch.

Zygmunt Bauman unplugged on the Wye

I am off to listen to Zygmunt Bauman talk at the Hay festival on Sunday. His sociology of individualism and consumerism was a major source of inspiration for the creation of Zopa which was in part envisaged as a ‘liquid modern community’ (if that is not a contradiction in terms). Sitting here in the Foyles jazz café I am swatting up on his latest oeuvre – "Does ethics have a chance in a world of consumers?" and trying to think of a good question to ask on Sunday that won’t leave me feeling like some fresher student challenging his tutor on his chosen topic.

It overlaps with my latest venture which is looking at ways of harnessing the moral economy in service of bringing green practices out of the political activist niche and slap bang into the middle of the consumer agenda. At the heart is the insight that ‘consumers’ are in fact deeply moral about the choices they make (not all, obviously, but there are some major conflicts and dilemmas which drive great swathes of an outside observer might characterize as ‘consumer behaviour’*). That morality may not always be articulated explicitly (and sometimes it is even ignored in the post-rational ramblings of many market research interviews) but with the right line of questioning it can be flushed out and laid bare. It is at that point that consumerism shifts from a technological narrative of solutions to ‘problems’ and shifts into a Bauman-esque negotiation between moral ideals and the problems and needs of everyday life.

In other words, consumerism has the potential for generating a significant social revolution which could far outstrip the outmoded political institutions and conventional activist channels to generate the change necessary for a positive compromise between our individual aspirations and the collective cost of our "lifestyle".

Consumerism itself, like money, is neither intrinsically good nor bad, it is merely a place where our notions of ethics and morality are played out and morphed by experience.

*Even the much maligned ‘diet coke and donut’ choice represents a desire for the eradication of a contradiction between the desire to be ‘good’ and the need for a sugar rush… In Australia this is mainly characterized by the juxtaposition of smoothie stores with donut emporia. Ironically of course the smoothies might be lower in fat but they are far fuller of fattening (fruit) sugar.