Abstract
The chapter provides a preliminary synthesis of the social functioning of money as a policy tool and as a theoretical problem. Far from being a universal neutral equivalent, the Sardex complementary currency activates heterogeneous social configurations and a hybrid economic activity that cannot be explained by traditional utilitarianism. The first section considers the effects and the potential of Sardex as an instrument of economic policy: effects on transaction costs; effects on competition, cooperation and innovation; effects for macro-economic policies of convergence. The second section presents the sociological categories that enable the social functioning of money to be conceptualised and also provides a preliminary comparison between modern state money, Sardex and crypto-currencies. A new typology of the social functioning of money is proposed to enlarge the traditional account of economic functioning. The third section proposes a theoretical reading of the nature of money as a mediator of the relationship between the individual and society and its performative capacities. In conclusion, some implications of the Sardex functioning are discussed for the elaboration of monetary policy from a sociological perspective.
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Notes
- 1.
In traditional neo-institutional analysis, transaction costs are decisive in a company’s decision to internalise the production of specific goods or to buy them on the market (Williamson 1975). The higher the transaction costs, the greater the incentive for the company to produce these goods itself, while low transaction costs encourage the firm to obtain supplies from the market.
- 2.
For example the fragmentation of textile and automobile production in Japan cannot be explained by a theory of transaction costs that does not take into account the cultural context which fosters strong individual motivations for cooperation (Dore 1983). The functioning of Italian industrial districts can also be explained thanks to the cultural support for cooperation among entrepreneurs, and between entrepreneurs and workers, as well as community forms of production organisation (Trigilia 1986). In this context, small, highly specialised companies, coordinated by the final seller of the finished product, each realise a part of the productive chain. The agreements among companies for realising these different productive phases are often based on frequently used, informal agreements. If they had to be described in formal contracts, it would create transaction costs that would be unsustainable for the industrial district. Those who defect or adopt opportunistic behaviours, in the industrial district, as in Sardex, are rapidly identified and isolated (Becattini 1989). These high levels of cooperation makes the transaction costs within the industrial district very low and this makes high productivity levels possible even where the production chain is very fragmented.
- 3.
- 4.
Although industrial districts and the Sardex network are both characterised by a strong sense of community membership, the relation between this sense of community membership and economic operations do not seem to follow the same pathways: in the industrial district, membership is a precondition of good economic operations, but in the Sardex experience this sense of community membership seems to be more an effect of how the economy operates. In fact as Sub-sects. 4.1.1 Selection and 4.1.2 Signalling demonstrate, the type of relationship experienced with other entrepreneurs changes inside the Sardex network, with the development of strong social ties.
- 5.
See Sub-sect. 4.1.4 Monitoring and Sanctioning.
- 6.
A high level of interpersonal trust that sustains transactions is a characteristic shared by economic district operations and those of the Sardex complementary currency. Although their social relations operate in a similar way, their organisational forms and the nature of their trust are different. Industrial district operations are based on the possibility of dividing the productive process among different companies united by uncertainties regarding technological development or by the need for production flexibility (Becattini 1989; Scott 1998). The network of companies in Sardex is not based on the division of production among small, specialised companies with a few, large final sellers like it is in the industrial district. The Sardex member companies carry out economic transactions with one another, and are complementary so as to complete the production chain both horizontally and vertically, but any form of coordination of production, in the current state of development of the Sardex project, unlike the industrial district, is occasional and comparable with production coordination already present in the euro market.
- 7.
See Sub-sect. 4.1.1 Selection.
- 8.
Unlike weak economies, the economic effects might not be particularly significant for strong economies, able to compete autonomously in external markets, which require currencies that can be transferred easily.
- 9.
This risk is well known for other virtual currencies such as Bitcoin (Cheah and Fry 2015).
- 10.
Fiscal authorities currently are allowed to access the bank accounts of all citizens. This is a situation close to Sardex market transparency. The debate involves a discussion on the nature of money as a commodity (which belongs to the person who owns it) or as a political project (collectively regulated) and also affronts the question of the quality of the democratic controls exercised by citizens on public institutions.
- 11.
The negative economic and social effects described, do not take into account ethical considerations as to whether or not it is acceptable, from a normative point of view, that people having to emigrate are considered less important than the freedom of capital to move so as to maximise profits. In this sense it is possible to affirm: “The neoliberal utopia of a borderless and peaceful globe requires that millions of ordinary people throughout the world have the flexibility to tolerate—perhaps as often as every five or ten years—a prolonged spell in which they must survive on half or less of what they previously earned. Polanyi believes that to expect that kind of flexibility is both morally wrong and deeply unrealistic. To him it is inevitable that people will mobilise to protect themselves from these economic shocks” (Block 2001, p. XXXIV).
- 12.
Limiting the circulation and use of Sardex (see Sect. 4.1.3 Opportunities) provides local companies with a competitive advantage which can be interpreted as a redistributive element that offers greater value to products from an economically weak region like Sardinia, compared to products imported coming from more competitive regions.
- 13.
Thanks are owed to Jens Beckert for his useful suggestions regarding this aspect of the Sardex currency.
- 14.
The previous conception of money was Marshall’s which affirmed that: “the quantity theory of money told them that prices would adjust to make sure that this could not happen. With a fixed quantity of money, prices would adjust to ensure that the demand for money equalled this fixed supply, and that all goods produced would actually be purchased” (Vines and Wills 2018, p. 6).
- 15.
This coexistence of individual and collective goals associated with Sardex operations, recalls the principles and functioning of Islamic finance (for an introduction to this topic, see Ricucci and Moiso 2017). The Islamic principles of prohibiting interest, sharing risk, prohibiting uncertainty clauses in contracts, equitable wealth distribution and prohibiting the use of money for prohibited activities have many affinities with the operating principles of the Sardex currency.
- 16.
Performative effects are the social effects of policies developed in accordance with specific theoretical approaches (Callon 1998; Callon et al. 2007; Caliskan and Callon 2009; Muniesa 2014). Classic studies in this field include forms of market expansion (Aspers 2007; Hawkins 2012), financial markets (MacKenzie and Millo 2003; MacKenzie 2004; MacKenzie 2008) and more recently the first studies of the performative effects of the central banks’ monetary policies have appeared (Braun 2015; 2016a, b).
- 17.
This observation is not intended to relativise all theories and deprive them of validity but rather wishes to draw attention to the secondary effects of the functioning models adopted that are often ignored, and also to consider how different explanatory models can contribute to creating social phenomena that are in line with the models utilised.
- 18.
Guseva and Rona-Tas provide a very clear description of the “performative” role of economic theories in developing new forms of money in Eastern Europe: “Although limited in application, economic models are nevertheless very useful. First, as a descriptive device, they can shed light on the functional rules of a market if certain expectations are met about who the players are, what ways they are willing to cooperate and what the actors value … The analytic function of economic theories is not just to supply what Max Weber called an ideal type, a simplification and clarification of reality, and not only to reveal the necessary preconditions that markets require; it is also to provide cognitive coordination, a common language for participants to use in thinking about a market. Next, as a prescriptive tool, economic theories can help the coordination of action among market players. By prescribing what to do, they can narrow the universe of actions that people are likely to take, making markets more predictable … As an ideological instrument, economic theories establish the market’s legitimacy … It is in this sense that economic theories protect these markets and contribute to their overall stability. Performativity of economics is laid bare here: for its theories to work, the market must be stable, and this very stability is advanced by those theories” (Guseva and Rona-Tas 2014, p. 244–5).
- 19.
The strong social bonds associated with this form of money are not always desirable in all historical and geographical contexts. For example in the presence of social trends tending towards identitarianism, community money might reinforce normatively undesirable trends.
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Bazzani, G. (2020). Conclusions. In: When Money Changes Society. Wirtschaft + Gesellschaft. Springer VS, Wiesbaden. https://doi.org/10.1007/978-3-658-28533-3_5
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