Proposal preview

The Variety of Exchange and the Character of Money

No one would deny that money is a means of exchange. However, historically, exchanges between people have had different characteristics, and the devices used to mediate those exchanges (i.e. money, as a means of exchange) have reflected those characteristics.
All exchanges have two, binary characteristics. The first characteristic is the degree of familiarity of the participants: an exchange can either occur anonymously or within a named relationship. As we use this term, the degree of familiarity does not refer to whether a seller and a buyer are acquaintances or strangers, but rather to whether or not the act of making a transaction creates a bond that constrains subsequent transactions.
The second characteristic of an exchange is its distance: a trade can be made either proximately or distantly. By distance we do not refer simply to physical distance, but rather to the size of the value of the exchange and its frequency. Proximate exchanges tend to be of small value and to be made more frequently than distant ones. In addition, in agricultural societies, the former is more affected by seasonality than the latter.
All exchanges have these binary characteristics of familiarity and distance. There are, therefore, four different kinds of exchanges, which we can represent with four quadrants. People in societies have tried to make different devices to mediate all four kinds of exchanges. A typical case appears in the figure below, in which large currency is used for anonymous/distant exchanges (Quadrant I), bills of exchange for named/distant exchanges (Quadrant II), book keeping for named/proximate exchanges (Quadrant III), and small currency is used for anonymous/proximate exchanges (Quadrant IV).
In reality, the four Quadrants seamlessly cover all exchanges, and a given device thus may mediate exchanges characterized by one Quadrant in one context only to function later in a different Quadrant. For example, bills of exchange that were initially characterized by Quadrant II sometimes could function as currencies in Quadrant I or even in IV. The boundaries demarcating the different Quadrants are also not of uniform clarity. The distinction between Quadrants II and III is fuzzy, while there is a considerable difference between the sporadic exchanges that characterise Quadrant I and the constant exchanges of Quadrant IV.
Making comparisons that cover practically the entire globe, this session aims to reveal the variety of ways in which the four Quadrants can be combined, to trace the trajectories of their transformations, and to subsequently indicate why money cannot be easily unified.

Organizer(s)

  • Akinobu Kuroda University of Tokyo ankuroda@ioc.u-tokyo.ac.jp Japan

Session members

  • Patrice Baubeau, Université Paris Nanterre
  • Leigh Gardner, London School of Economics
  • Georgina Gomez, International Institute of Social Studies
  • Craig Muldrew, U of Cambridge
  • Jürgen Nautz, U of Applied Sciences, Warburg
  • Anders Ögren, Lund
  • Karin Pallaver, Bologna
  • Masato Shizume, Waseda
  • Ekaterina Svirina, National research university «Higher school of economics»

Discussant(s)

  • Georges Depeyrot CNRS/ENS Paris georges.depeyrot@orange.fr

Papers

Panel abstract

All exchanges have two, binary characteristics. The first characteristic is the degree of familiarity of the participants: an exchange can either occur anonymously or within a named relationship. The second characteristic of an exchange is its distance: a trade can be made either proximately or distantly. People in societies have tried to make different devices to mediate all four kinds of exchanges. For example, large currency is used for anonymous/distant exchanges (Quadrant I), bills of exchange for named/distant exchanges (Quadrant II), book keeping for named/proximate exchanges (Quadrant III), and small currency is used for anonymous/proximate exchanges (Quadrant IV). Making comparisons that cover practically the entire globe, this session aims to reveal the variety of ways in which the four Quadrants can be combined, to trace the trajectories of their transformations, and to subsequently indicate why money cannot be easily unified, since money is a means of exchange.

1st half

Four Quadrants of Exchange: The Aims of the session ‘The Variety of Exchange and the Character of Money’

KURODA, Akinobu

No one would deny that money is a means of exchange. However, historically, exchanges between people have had different characteristics, and the devices used to mediate those exchanges have reflected those characteristics. All exchanges have two, binary characteristics. The first characteristic is the degree of familiarity of the participants: an exchange can either occur anonymously or within a named relationship. The second characteristic of an exchange is its distance: a trade can be made either proximately or distantly. By distance we do not refer simply to physical distance, but rather to the size of the value of the exchange and its frequency. All exchanges have these binary characteristics of familiarity and distance. There are, therefore, four different kinds of exchanges, which we can represent with four quadrants. People in societies have tried to make different devices to mediate all four kinds of exchanges.

No one would deny that money is a means of exchange. However, historically, exchanges between people have had different characteristics, and the devices used to mediate those exchanges have reflected those characteristics. All exchanges have two, binary characteristics. The first characteristic is the degree of familiarity of the participants: an exchange can either occur anonymously or within a named relationship. The second characteristic of an exchange is its distance: a trade can be made either proximately or distantly. By distance we do not refer simply to physical distance, but rather to the size of the value of the exchange and its frequency. All exchanges have these binary characteristics of familiarity and distance. There are, therefore, four different kinds of exchanges, which we can represent with four quadrants. People in societies have tried to make different devices to mediate all four kinds of exchanges.

Institutions, trade and money. What can we learn from Arab travellers in the far North 9th C to 12th C ?

Anders Ögren

In this paper I use rational choice and institutional theory to make economic sense of eyewitness accounts of trade and money from the 9th to the 12th centuries in Eurasia. The sources are accounts from Arabic travellers in the concerned regions, complemented by other written sources as well as archeological findings. As the trade concerns repeated, or even continuous, long distance trade I also use the theoretical framework of analytical narratives as well as Kuroda’s four quadrants of exchange, involving ‘distance’ and ‘familiarity’ in the analysis.

In this paper I use rational choice and institutional theory to make economic sense of eyewitness accounts of trade and money from the 9th to the 12th centuries in Eurasia. The sources are accounts from Arabic travellers in the concerned regions, complemented by other written sources as well as archeological findings. As the trade concerns repeated, or even continuous, long distance trade I also use the theoretical framework of analytical narratives as well as Kuroda’s four quadrants of exchange, involving ‘distance’ and ‘familiarity’ in the analysis.

Variety of money in Siberia in the 18-19th century

Ekaterina Svirina

Siberia during the 18 - 19th centuries is known to have different means of exchange supporting various trade relations. Before the colonization of the territory in the middle of the 16th century, the “trade-communication” life of the tribes was characterized by in-kind exchanging of food, cattle and necessities depending on location and seasonality. The monetary relationships judging by the historical descriptions and legislative acts were not characteristic to these inhabitants. Money started to circulate with the arrival of the Russian troops, founding of fortresses-towns and the state institutions. This paper shows discreetly under what circumstances within 18 - 19th century money (small and large currency) was used as a means of exchange, and what other means were used in other cases and whether they could be systemized. The argument aims to clarify whether the Siberia during this period can be considered as not contradictory to the 4-quadrants proposition.

Siberia during the 18 - 19th centuries is known to have different means of exchange supporting various trade relations. Before the colonization of the territory in the middle of the 16th century, the “trade-communication” life of the tribes was characterized by in-kind exchanging of food, cattle and necessities depending on location and seasonality. The monetary relationships judging by the historical descriptions and legislative acts were not characteristic to these inhabitants. Money started to circulate with the arrival of the Russian troops, founding of fortresses-towns and the state institutions. This paper shows discreetly under what circumstances within 18 - 19th century money (small and large currency) was used as a means of exchange, and what other means were used in other cases and whether they could be systemized. The argument aims to clarify whether the Siberia during this period can be considered as not contradictory to the 4-quadrants proposition.

Tracking the rise in the use of paper instruments of currency in London c.1700-1800

Craig Muldrew

forthcoming

forthcoming

Dogfights over chicken feed? French petty coins circulation and late 19th century small change riots

Patrice Baubeau

The local monetary crises that took place in France between 1894 and 1896 remain largely ignored. Small coins circulation and their withdrawal in late 19th century France took place within a complex multi-scale monetary context, from the international (Latin Monetary Union) to the local level. Thus, in some localities the circulation medium was sometimes widely different from the legal framework, especially in harbours and textile cities, which led to local monetary tensions and sudden outbursts of social unrest. These problems developed not only in consequence of the unsustainability of the small silver denominations and the restriction in the circulation of foreign (or forged) small coins, but also reflected a socially fragmented monetary circulation. These small crises, sometimes leading to violent riots, illustrate the ambiguous nature of money, whose socially separated denominations raised social justice issues and illustrated the limits to the nationalization of monetary systems.

The local monetary crises that took place in France between 1894 and 1896 remain largely ignored. Small coins circulation and their withdrawal in late 19th century France took place within a complex multi-scale monetary context, from the international (Latin Monetary Union) to the local level. Thus, in some localities the circulation medium was sometimes widely different from the legal framework, especially in harbours and textile cities, which led to local monetary tensions and sudden outbursts of social unrest. These problems developed not only in consequence of the unsustainability of the small silver denominations and the restriction in the circulation of foreign (or forged) small coins, but also reflected a socially fragmented monetary circulation. These small crises, sometimes leading to violent riots, illustrate the ambiguous nature of money, whose socially separated denominations raised social justice issues and illustrated the limits to the nationalization of monetary systems.

Money and national identity in Austria-Hungary

Jürgen Nautz

forthcoming

forthcoming

2nd half

The Use of Money in Japan in light of Space and Anonymity

Masato Shizume

I will review the use of money in Japan in a historical perspective. From the ancient through the pre-modern history, people chose a money to use from a wide variety of monies depending on the type of transactions. I will try to classify the use of various monies in terms of space (distance) and anonymity (familiarity of participants) of transactions when it was used, following Kuroda's definitions. I will look at the use of coins, commodities such as rice and clothes, strips of paper such as notes and bills of exchange, and bookkeeping instruments in each period. Then, I will discuss implications of the unification of money in the modern period.

I will review the use of money in Japan in a historical perspective. From the ancient through the pre-modern history, people chose a money to use from a wide variety of monies depending on the type of transactions. I will try to classify the use of various monies in terms of space (distance) and anonymity (familiarity of participants) of transactions when it was used, following Kuroda's definitions. I will look at the use of coins, commodities such as rice and clothes, strips of paper such as notes and bills of exchange, and bookkeeping instruments in each period. Then, I will discuss implications of the unification of money in the modern period.

The gold standard in Africa: monetary dimensions of interwar imperialism

Leigh Gardner

The collapse, revival, and then final demise of the gold standard during the interwar period has received considerable attention in financial histories of Europe and North America. Existing research has examined not only the decisions which led to monetary instability in this period, but also how monetary policies affected core economies. However, the imperial dimension of these crises have been largely neglected. Colonial expansion in the nineteenth and early twentieth centuries had extended gold standard currencies to much of Asia and Africa, where they joined existing monetary systems. How did instabilities in the international gold standard impact monetary systems in the colonies? This paper compares three cases in sub-Saharan Africa in the 1920s and 1930s in which international shifts affected monetary arrangements in African countries, and examines how Africans and those who governed them responded to global change.

The collapse, revival, and then final demise of the gold standard during the interwar period has received considerable attention in financial histories of Europe and North America. Existing research has examined not only the decisions which led to monetary instability in this period, but also how monetary policies affected core economies. However, the imperial dimension of these crises have been largely neglected. Colonial expansion in the nineteenth and early twentieth centuries had extended gold standard currencies to much of Asia and Africa, where they joined existing monetary systems. How did instabilities in the international gold standard impact monetary systems in the colonies? This paper compares three cases in sub-Saharan Africa in the 1920s and 1930s in which international shifts affected monetary arrangements in African countries, and examines how Africans and those who governed them responded to global change.

Disconnected currencies: cents and rupees in early colonial Kenya

Karin Pallaver

This paper traces the distinct forms of circulation displayed by different denominations in early colonial British East Africa (BEA) and argues that their use was shaped by gender, social class and by the type of transaction. It reconstructs the processes of colonial monetization from 1905 - when the Indian rupee and its fractional coins, the East African cents, became the official currency of BEA - to the 1920s, and it explores the ways in which monetary practises, including particular ways of reckoning, shaped the use of colonial money. This paper suggests that the ways in which Africans used colonial currencies influenced their circulation to such an extent as to transform what was perceived by the British authorities as a “general- purpose currency” into a number of ‘disconnected’ denominations which served special-purpose functions.

This paper traces the distinct forms of circulation displayed by different denominations in early colonial British East Africa (BEA) and argues that their use was shaped by gender, social class and by the type of transaction. It reconstructs the processes of colonial monetization from 1905 - when the Indian rupee and its fractional coins, the East African cents, became the official currency of BEA - to the 1920s, and it explores the ways in which monetary practises, including particular ways of reckoning, shaped the use of colonial money. This paper suggests that the ways in which Africans used colonial currencies influenced their circulation to such an extent as to transform what was perceived by the British authorities as a “general- purpose currency” into a number of ‘disconnected’ denominations which served special-purpose functions.

The institutionalisation of currency circuits in Argentina (1998-2005)

Georgina Gomez

Most economies nowadays operate on the basis of one currency per country. Argentina was a notable and rather recent exception with several currencies circulating in rather large currency circuits at the national, provincial, municipal and community levels. This paper explores in what ways households and businesses combined several currencies for accountancy, exchange, payments and savings. From a Polanyian perspective, it conceptualised the notion of currency circuits as institutionalised relations of a currency with specific spaces, products and categories of agents. The research discloses that households and small businesses can deal with monetary plurality by organising what currencies they use for what purpose, without converting one currency into another. What is more important, monetary plurality enabled production and the use of skills that were idle, hence confirming Kuroda’s hypothesis that several currencies could do more than any one currency by itself.

Most economies nowadays operate on the basis of one currency per country. Argentina was a notable and rather recent exception with several currencies circulating in rather large currency circuits at the national, provincial, municipal and community levels. This paper explores in what ways households and businesses combined several currencies for accountancy, exchange, payments and savings. From a Polanyian perspective, it conceptualised the notion of currency circuits as institutionalised relations of a currency with specific spaces, products and categories of agents. The research discloses that households and small businesses can deal with monetary plurality by organising what currencies they use for what purpose, without converting one currency into another. What is more important, monetary plurality enabled production and the use of skills that were idle, hence confirming Kuroda’s hypothesis that several currencies could do more than any one currency by itself.

Strategic peasants, multiple markets, and complementary currencies: Revisiting rural economy in early modern East Asia

KURODA, Akinobu

Chinese peasants strategically chose one-time transaction which was independent from particular buyer. One-time transaction was popular in the choice by not only peasants in local exchanges but also by petit traders who connected villages and towns. Consequently, price movements in local currencies such as copper coins at local market places did not follow the changes in inter-regional trades which were made in silver. Keeping the independence of local trades, local merchants established a system for settlements through account books and issued native notes to respond to chronical shortage of currency. The contrast with Japanese peasants who tended to make subsequent transaction which was dependent on usual broker shows a case of discrepancy between a society dependent on local/anonymous exchange and another on local/named exchange.

Chinese peasants strategically chose one-time transaction which was independent from particular buyer. One-time transaction was popular in the choice by not only peasants in local exchanges but also by petit traders who connected villages and towns. Consequently, price movements in local currencies such as copper coins at local market places did not follow the changes in inter-regional trades which were made in silver. Keeping the independence of local trades, local merchants established a system for settlements through account books and issued native notes to respond to chronical shortage of currency. The contrast with Japanese peasants who tended to make subsequent transaction which was dependent on usual broker shows a case of discrepancy between a society dependent on local/anonymous exchange and another on local/named exchange.