Some notes on Nigel Dodd’s first chapter: Origins

Nigel Dodd’s (2014) first chapter presents several challenges and I would like to suggest a framework that can help us understand him more clearly. Dodd introduces a difficult approach to the study of money because he doesn’t take a firm position. He is not saying that money is one thing. As he writes in the conclusion of his chapter, “I want to open a line of argument about monetary diversity… Money is a remarkably diverse phenomenon” (47–48, italics added).

Dodd is not looking to finish or conclude the argument about what money is but rather open it up. To put this in very simple terms: if you say that something is this, and that’s your final answer, then that thing cannot be anything else. It has to be that one thing, and that one thing only. So, if you say that money is this and nothing else, then you won’t be open to think about money in other ways. As Dodd writes, money’s “variance is an opportunity, not an impediment” (48). Approaching money as something multiple, as something that comes in many forms, feeds the imagination. It is an approach that can lead to thinking about money in new ways. And with the explosion of money forms over the last decade (Bitcoin, etc.), this is a very timely and useful approach.

To give more clarity to Dodd’s approach, I’ll compare him with Karl Menger (1892) and Geoffrey Ingham (2004).

Menger and Ingham are opposed to one another about the origins of money. They are part of a long-standing debate between economic and sociological approaches to the origins of money, which come from the difference between the individual and society. Here’s a table to illustrate:

While economics and sociology are on opposite sides, they are both trying to give THE final answer to the debate in the origins of money. For the economist, the individual made money through market transactions, and for the sociologist, money arose from payments to religious and political authorities. These authorities are greater than the individual; they are institutions that were made by a collective of people, that is, society.

So, we have two opposed positions: the individual vs society. Since these two positions have been part of a long debate, a lot of people wrote a lot about this. It seems debate and the need to be right motivates people to think of a lot of stuff. Economists and sociologists often try to preempt what the other side will say. For example, Ingham writes, “the evidence leads to the conclusion that private transfer outside the command economy comprised an insignificant part of the total financial transactions” (96). As for Menger, he wrote, “Money has not been generated by law… Sanction by the authority of the state is a notion alien to it” (255).

Now, while Menger and Ingham, economics and sociology, are opposed, they are actually fundamentally equivalent. This is because they are after the same thing: THE final answer. And this is different from the way Dodd thinks about money. To illustrate this difference, I’ll draw on an older discord between David Hume (1995 [1748]) and Immanuel Kant (2004 [1783]) on metaphysics, or the nature of how we understand reality. For the sake of argument, I’ll give a simplified version of the two sides.

Kant outlined two dimensions to reality. The material world we see around us is the appearance of reality. It is what appears to us through our senses (sight, touch, smell, etc.). The formal world is composed of the rules that govern reality. These rules are commonly known as “the laws of nature,” the real world that exists beneath the appearances of the material world.

Let’s take an example. If I have a pen in my hand and then I open my hand, the pen will fall to the ground. I will see the pen fall and I will hear it hit the ground. Why did the pen fall? Because gravity pulled it down. This is the law of gravity, and it is universal in the sense that if I release the pen one hundred times, all other variables aside, the pen will fall to the ground. Pretty straightforward.

Kant wrote about metaphysics in response to Hume, who proposed something completely different, which Kant took to be an attack on science (if we define science as the study of nature’s laws). Hume, like Kant, outlined two dimensions. Impressions are experiences we have in the world, while ideas emerge when we have had many impressions of the same experience. Let’s return to the example of the pen.

I drop the pen and see it fall. The experience of seeing the pen fall to the ground is a single impression of this event. Now, if I drop the pen ten times and the same things happens, I will form an idea that the pen falls when I release it. Kant will say that this is the law of gravity, and it happens whether I like it or not, but not Hume. For Hume, the falling pen is not a law but an idea, an idea that is composed of the accumulation of impressions I have experienced from dropping the pen ten times. But there is no way to know with certainty that the pen will drop an eleventh time if I release it from my hand.

I know, Hume is strange, and also totally awesome. What he’s saying is that there is nothing that exists outside human experience. In more formal terms, the difference between Kant and Hume is that Kant’s approach is transcendental while Hume’s is immanent.

Transcendence means that there is a reality beyond what people do. There is a fundamental, universal truth independent of the existence of humans. Immanence, on the other hand, means that reality is made by people in their experiences in the world. There is no outside to experience; what you see is what you get, or more precisely, what you experience is what you get.

If we return to Menger and Ingham, while, again, both are opposed in their economic and sociological positions, they are both Kantians. For Menger, there is no society; there is the market and rational actors exchanging with one another. The experience of the rational actor is irrelevant. People are rational actors because that is their transcendental nature. For Ingham, individuals don’t really matter. What matters is society, a transcendental collective that shapes and governs the actions of individuals.

Dodd, in contrast, is Humean. There is no transcendental truth to the nature of money, there is only what people do with it, and they do all kinds of different things. Dodd provides six different way of considering money to illustrate its various forms in the world.

Dodd’s six approaches are NOT interpretations. An interpretation is a Kantian term. It is to say that we are looking at an object from different angles, as though that object was a transcendental thing at the center. An interpretation implicitly assumes that there is a universal, objective truth beneath the interpretation (see for example Mol 2002).

A more effective way to consider Dodd is to think of each of his suggestions as ways of foregrounding different dimensions of money. Each approach brings closer to the light some aspects of money and leaves out other aspects. We can layer and manipulate Dodd’s suggestions as we like. Again, they are suggestions, so have fun with them.

Dodd’s method takes advantage of several philosophical approaches. Let’s consider a few. Theodor Adorno (1973) suggested the notion of “nonidentity.” This is the space between the thing and the concept, or the world and how we understand it. The gap will always be there, so it’s best to make friends with it. In the case of money, whatever definition we give to this thing will always be insufficient. Similarly, Deleuze and Guattari (1987) wrote that the human mind cannot capture the complexity of the world. There’s just too much going on, and you’d have to think of yourself a god to claim to understand the world in its totality. Marc Augé suggests the notion of “overabundance” to characterize the world. It’s an overwhelming place, and whatever understanding we provide brings together a few pixels of the whole image. These authors suggest analytical modesty rather than definitive resolution.

These philosophical approaches, along with Dodd’s suggestions, don’t lead to nihilistic ends, as if to say, “well, if we can’t understand the world, then what’s the point of even trying.” Rather, it’s to say, “look at all the marvels that await us out there!” The world is not a disenchanted place; it is a place that conjures the imagination, but only if you let it.

Another way to think of this method is to withhold from deducing general or universal conclusions from particular events. Yes, there are trends, consistencies, and patterns in the world, but it is by leaving room for doubt that we can then notice that things can always be otherwise, and that the world maintains the capacity to surprise us.

So, if we return to Menger and Ingham and approach them through Dodd’s framework, we get a different picture. Menger and Ingham’s stories of the origins of money are not final answers but perspectives that allow us to ask questions in certain ways and focus on different dimensions of money. This approach also allows us to get by the impasse in the debate between state and market. This is a tired debate, considering it arguably began with Adam Smith and continues on today. Freed from questions of right or wrong, Dodd’s approach allows us to embrace the diversity of money. The four additional perspectives in his chapter offer other ways of considering money, and we’ll get to these in more detail in the coming weeks.

REFERENCES

Adorno, Theodor. 1983. Negative Dialectics. Translated by E. B. Ashton. New York, NY: Continuum.

Augé, Marc. 1995. Non-Places: Introduction to an Anthropology of Supermodernity. Translated by John Howe. New York, NY: Verso.

Deleuze, Gilles, and Felix Guattari. 1987. A Thousand Plateaus: Capitalism and Schizophrenia. Translated by Brian Massumi. Minneapolis, MN: University of Minnesota Press.

Dodd, Nigel. 2014. The Social Life of Money. Princeton, NJ: Princeton University Press.

Hume, David. 1995 [1748]. An Inquiry Concerning Human Understanding. Upper Saddle River, NJ: Prentice Hall.

Ingham, Geoffrey. 2004. The Nature of Money. Cambridge, UK: Polity Press.

Kant, Immanuel. 2004 [1783]. Prolegomena to Any Future Metaphysics: That Will Be Able to Come Forward as Science. Translated by Gary Hatfield. Cambridge, UK: Cambridge University Press.

Menger, Karl. 1892. “On the Origin of Money.” The Economic Journal 2 (6): 239–55.

Mol, Annemarie. 2002. The Body Multiple: Ontology in Medical Practice. Durham, NC: Duke University Press.