Sociology of Money: Explained in Simple Words

Synopsis: This article discusses the traditional economic understanding of money and then expands to the lesser-understood social-cultural dimensions. The article describes market-based economies and some of the societal challenges associated. Through this article, readers are invited to re-think Capitalism as we know it and to challenge the notion that what we have now is our only viable option.  

What Is Money? Shifting from an Economic to a Sociological Lens

Money is generally understood as integral to the study of Economics. According to the Wikipedia article “Money”, Money is “any item or verifiable record that is generally accepted as payment for goods and services and as repayments of debts…” (Money, 2022). Viviana Zelizer expands on this in her book,“The Social Meaning of Money” in which she describes that the traditional understanding of Money is based on five main assumptions. For every assumption in traditional Economics, she argues a sociological perspective.

1. “Money is strictly economic.”
2. “All monies are the same in modern society. There is only one kind of money.”
3. Personal and social values are “qualitatively distinct” whereas money is “utilitarian” and “qualitatively neutral”. In other words, money in its most basic form is a number and numbers are inherently neutral. The only way to distinguish numbers from one another is by its numerical value. Personal and social values on the other hand have meaning that numbers cannot measure.  
4. “Monetary concerns are constantly enlarging and corrupting”. Though money itself is neutral, the Commodification of society or the process of society becoming reduced to economic exchanges of goods and services seems to have gripped modern civilization. In other words, money has infiltrated spheres of society that has been perceived as inherently pure such as family, religion, education, health care and leisure.
5. Money has the power to transform cultural values and social relations but the notion that it can be the other way around; that cultural values and social relations can influence how money is treated is rarely ever considered if not outright dismissed. 

Zelizer argues that there is certainly a social-cultural dimension to Money and there is a reciprocal influence between money and cultural values and social relations. She states that though historically the government attempted to standardize money into one type, people continue to find new ways to make money unique. She introduces the phrase “earmarking” to describe the phenomenon of people making money unique to personal, social and cultural contexts by making meaning to not just the “how much” of money but the “when and how” of money. People interact with money such as categorizing, sorting, manipulating, saving, spending, earning, gifting etc. Furthermore, programs such as food stamps, educational awards and store credits are ways in which money is not fully standardized as it is allotted for specific purposes and cannot be used otherwise. In addition, she explains that not all money is perceived equally due to social norms. For example, there is a difference between a bribe and a tribute. There is a difference between someone’s first paycheck and their twentieth. There is a difference between someone stealing $1000, someone winning $1000 and someone making $1000 through working a job. And finally, imagine the story of a single mother whose child desperately needs a live-saving medical procedure and she manages to raise $1000 through the help of family, friends and strangers. That story likely invokes a feeling of hope in humanity and awe for every dollar raised because of the process of how that money was acquired and the reason it is needed so urgently. Even though the quantity is the same; in all these situations, there is more to the money than its numerical amount because people assign specific meanings to money. From this, we can see that not only does money influence society but also society and culture influence money. (The Social Meaning of Money, Zelizer, 1994)

Money in Modern Societies

Market-based economies are the most prevalent economic system in modern societies. In American society we have Capitalism. There are ethical concerns associated with the way Capitalism plays out in American Society.

Market-Based Economies

A market-based economy also known as a free-market economy is an economic system in which the goal is to maximize profit in the cheapest and most efficient way. Free markets use the rules of supply and demand to determine the price of goods and services. The companies that produce goods and services are privately-owned which allows the freedom of business owners to make a variety of choices; while at the same time the responsibility to evaluate the impact of their choices is rested on them. Whether the responsibility is taken or not it is still theirs’. Contemporary societies tend to have a combination of a market-based economy and varying degrees of regulation by the government. (Free Market, 2022)

The Catastrophic Impact of Capitalist Society

It is no secret that Capitalism has had devastating outcomes on the lives of Americans in a variety of ways. The ever-increasing income inequality, lack of access to affordable and adequate health care, environmental racism and food insecurity to name a few. There are lesser tangible implications that go hand in hand with living in a modern society such as the flattening of social connection and the sense that every aspect of ones life is reduced to a number; that the richness is gone because profit-making is so often prioritized. The American Dream and Consumerism are ways that profit is prioritized and perpetuates the Capitalist cultural ideals.

The American Dream

The United States has a long history of marginalized groups of people leaving their home countries for a chance to improve living conditions. There is a deep-rooted cultural belief that with hard work, effort and persistence that any individual no matter who the person is or where they started out in life can achieve economic success. This is known as the American Dream. On the flip side, anyone who does not achieve success is viewed as someone who must have not worked hard. The problem is that the Capitalist economy thrives on having winners and losers and embedded in its design there will be a socioeconomic hierarchy.

Consumerism

On one hand, the American Dream is an example of a cultural belief held both by the working poor class who desperately chase the American Dream; by the middle class who have in some ways “achieved” the American Dream and now have to upkeep it to accumulate wealth, invest in property ownership, move to a wealthy suburb etc. Consumer culture on the other hand is a form of encouraging buying behavior. It is when businesses, the media, the entertainment industry, banks and other institutions attempt to sell products and services and increase consumption through marketing to the public and the culture that forms from that. For example, Black Friday is part of Consumer Culture because it encourages a sort of frenzy to buy, buy, buy. Buying with no conscious is part of Consumer Culture. The obsession for bigger, better, faster, and cheaper items is part of Consumer Culture. On the business end, the goal is to sell, sell, sell; to sell with the intention of making a profit and without regard to the harmful impact of those products or the production of those products. This ties in with Commodification or the process of goods and services being reduced to their usefulness and profit potential (Wikipedia, Commodity, 2022). With the image of the American Dream ingrained as an ideal to strive for, acquiring the income to keep up with the consumption has become part of that Dream and a sign of success. A part of Consumer Culture has become to treat the American Dream like another packaged product to consume rather than thinking deeply about what happiness and success look like personally.

Rethinking Capitalism

With all the disillusionment and economic suffering that Capitalism may bring for individuals, there is an opportunity to create a better society; one that is inclusive, equitable and just. There is a growing cultural paradigm shift that prioritizes community, sustainability and collaborative processes over profit-making.

Sharing Events

A study by the Appalachian State University shows that there are efforts to bring people together through what is called “Sharing Events”. Sharing Events are free private or public events designed for people to have access to the sharing of knowledge, resources, post-consumption activities including upcycling, recycling, reusing etc. (Alternative Marketplaces In The 21st Century: Building Community Through Sharing Events, Albinsson, P. and Perera, B. 2012)

The Global Ecovillage Network

“The Global Ecovillage Network defines Economic Vitality as

• Keeping the money in the community,
• Circulating it through as many hands as possible,
• Earning it, spending it, and investing it in member-owned retail and service   businesses,
• Saving it in home-grown financial institutions.”

(The Economic Dimension, Kindig, 2014)

Although the Global Ecovillage Network is primarily an environmental effort, the approach is holistic and the mission transcends environmental sustainability; rather there is an emphasis on supporting the various interconnected dimensions of ecological sustainability. In this way the vision of sustainability encompasses a dimension of economic wellness while at the same time supporting mental well-being, using Permaculture principles and more.  

Local Currencies

Similar to the Global Ecovillage Network with an emphasis on supporting local economic activity and circulating wealth rather than accumulating is reflected in the establishment of local currencies in Brazil. Lila Gaudêncio a PhD student studied local currencies in Brazil that was designed to improve local economy and saw such a form of civic engagement created a sense of shared identity and togetherness as well as allowed people to question their relationship with money on a cultural level. (Gaudêncio, 2022)

Participatory Budgeting

A final example in this article is Participatory Budgeting or a form of civic engagement in which the local government sets aside a financial budget for the making of a neighborhood project and in which citizens are invited to be involved in via a democratic process. This example demonstrates the power of human agency and how people can use their to voice be heard in their local economy and government. (What is PB?, 2022) Making space for people to feel seen, heard and valued boosts the morale of the neighborhood and empowers its neighbors, especially those that have been marginalized to be included and serves as encouragement to be active in future local civic efforts. There is something very powerful about being actively involved in one’s neighborhood; about having something to point to and say “I played a part to make that happen”. When people who have been previously silenced are included to participate, priorities shift, values are reconsidered and the power is distributed among multiple voices and perspectives. This means that when done right, participatory budgeting would prevent profit-making and business-oriented agendas from taking over the budget and instead direct the focus towards projects that people have expressed interest in and believe will improve their quality of life.    

Conclusion

When we think about Capitalism in our society today, we may feel overwhelmed by the societal problems spinning out of control. We can start by asking: is Modern Capitalism operating compatible with the vision we desire for ourselves and generations to come? Is it aligned with the outcomes we strive to achieve for a just and equitable society? This most likely will not be a single yes or no answer. In any system even oppressive ones there are aspects that are working and aspects that are not. As human beings, we are dynamic and evolving; and when we look for it we can see throughout history countless efforts towards change. Consider a group of neighbors who come together to transform a vacant lot into a community garden. To learn about the process; to hear the story of struggle and triumph is to resist the reductive quality that Commodification has. At that moment, we can choose to see beyond numbers, profit and the final product. We can choose to see the beauty, the collaboration, and the ongoing messy process of establishing and maintaining a community garden. That mindset of cultivating our minds to see beyond Capitalist ideals is already a step in the right direction.

References:

Albinsson, Pia A., and B. Yasanthi Perera. “Alternative Marketplaces in the 21st Century: Building Community through Sharing Events.” Journal of Consumer Behaviour 11.4 (2012): 303-15. Alternative Marketplaces In The 21st Century: Building Community Through Sharing Events. Web.

“Capitalism, Democracy, and the American Dream – the History of the American Dream.” Google Sites: Sign-in. Web. 25 Oct. 2022.

“Commodity.” Wikipedia. Wikimedia Foundation, 01 Sept. 2022. Web. 25 Oct. 2022.

“Consumerism.” Wikipedia. Wikimedia Foundation, 12 Oct. 2022. Web. 25 Oct. 2022.

“Free Market.” Corporate Finance Institute. 08 May 2022. Web. 25 Oct. 2022.

Kindig, Christopher. “The Economic Dimension.” Global Ecovillage Network. 17 Mar. 2020. Web. 25 Oct. 2022.

“Money.” Wikipedia. Wikimedia Foundation, 14 Oct. 2022. Web. 25 Oct. 2022.

“Rethinking Capitalism through Community Currencies – Gates Cambridge.” Gates Cambridge –. 05 Jan. 2022. Web. 25 Oct. 2022.

“The Social Meaning of Money.” Google Books. Google. Web. 25 Oct. 2022.

“What Is Pb?” Participatory Budgeting Project. 17 July 2020. Web. 25 Oct. 2022.