View source for General-Purpose Money vs Special-Purpose Money



=Discussion=

Alf Hornborg:

(Comment on Mary Mellor’s Great Transition Network's essay “[http://www.greattransition.org/publication/money-for-the-people Money for the People]”)

"I would like to complement Mellor’s crucial insights and proposals in a few ways. First, her assertion that it is not “money itself” that fuels exploitation and environmental destruction needs to be modified. As long as we are referring to what in economic anthropology is called “general-purpose money” (money that can be used to purchase virtually anything), money *itself* does indeed fuel exploitation and environmental destruction. If there are no constraints on what we can buy with our money, we shall naturally be looking for the best deals, which usually means the lowest-paid labor and the lowest-priced resources. The globalized capitalist market is an expression of the inherent logic of general-purpose money. This logic is the same regardless of whether such money is created by banks or states, and even regardless of the existence of interest.

Mellor writes that “some form of money has been around in almost all human societies.” Yes, but not the particular form of money that developed in colonial Europe. The destructive implications of general-purpose money were evident to critics of market economies from Marx to Polanyi. The logic of such money is distinctly different from the “special-purpose money” that was identified, for example, among the Tiv people of Nigeria. Precolonial Tiv, like most traditional cultures, recognized more than one sphere of value. Whatever kind of money that existed, it could not readily buy *everything*. When Mellor writes that it is difficult to envisage societies without “some mechanism to facilitate comparisons of value,” she does not reckon with the possibility of recognizing such cultural limitations of commensurability.

Mellor’s point that money is a social construct means that it is potentially possible to democratically design a money system that recognizes limits to commensurability. To take a couple of drastic examples, it would be possible to decide that rainforests are not exchangeable on the same market as Coca-Cola, or that food in the global South is not purchased with the same kind of money as is used for financial speculation on Wall Street. A system of separate currencies for basic needs versus global markets would insulate values pertaining to sustainability and survival from the abstract capital flows of the world-system. It could thus serve to check exploitation and environmental destruction.


...


To change the logic of the global economic game, we must change money itself.

My third point, then, is that the basic income to which all of should have a right should not be paid in general-purpose money, because that would simply keep us buying the products of the lowest-paid labor and the most degraded landscapes. [5] It should be paid in a special-purpose, complementary currency that can only be used to buy products and services produced within a specified radius of the point of purchase. This is not “local money” in the sense of geographically restricted currencies, but one single, national currency – issued by the state – that is only for local use. There is no space here for listing the many social and ecological benefits of such a reform, but it would be quite in line with Mellor’s general understanding of money as our main – perhaps only – chance of achieving sustainability, justice, and resilience."
(http://greattransition.org/forum/gti-discussions/191-money-for-the-people/2369)


=Example=

"The economic anthropologist Paul Bohannan in the 1950s showed that the Tiv economy was organized around three separate “spheres of exchange,” and that some conversions between separate spheres of value were morally discouraged."


[[Category:Money]]

[[Category:Economics]]

[[Category:Commons Economics]]