Sociologists treat money paradoxically: On the one hand, money is considered a central element of modern society, and yet it remains an unanalyzed sociological category. In classic interpretations of the development of the modern world, money occupies a pivotal place. As ”the most abstract and ‘impersonal’ element that exists in human life” (Weber [1946] 1971, p. 331), it was assumed that money spearheaded the process of rationalization. For Georg Simmel and Karl Marx, money revolutionized more than economic exchange: It fundamentally transformed the basis of all social relations by turning personal bonds into calculative instrumental ties.

But by defining money as a purely objective and uniform medium of exchange, classical social theory eclipsed money’s sociological significance.

If indeed money was unconstrained by subjective meanings and independent social relations, there was little left of sociological interest. As a result, economists took over the study of money: There is no systematic sociology of money. Significantly, the International topic of the Social Sciences devotes over thirty pages to money but not one to its social characteristics. There are essays on the economic effect of money, on quantity theory, on velocity of circulation, and on monetary reform, but nothing on money as a ”realite sociale,” using Simiand’s apt term (1934).

The sociological invisibility of money is hard to pierce. For instance, the current resurgence of interest in economic sociology has led to a serious revamping of the neoclassical economic model of the market, firms, and consumption (see, e.g., Smelser and Swedberg 1994). But despite the stimulus, no full-fledged sociology of money as social process has emerged. Consider the recent literature on the culture of consumption, which boldly reverses our understanding of modern commodities. The new revisionist approach uncovers the symbolic meanings of what money buys, but, curiously, the cultural ”freedom” of money itself is seldom directly challenged (see, e.g., Appadurai 1986; Bronner 1989; Brewer and Porter 1993).

A sociology of money must thus dismantle a powerful and stubborn utilitarian paradigm of a single, neutral, and rationalizing market money. It must show that money is a meaningful, socially constructed currency, continually shaped and redefined by different networks of social relations and varying systems of meanings. There is some evidence that the sociological conversion of money has begun. (See, e.g., Doyle 1992; Carruthers and Espeland 1998; Dodd 1994; Lane 1990; Mizruchi and Stearns 1994; Reddy 1987; Singh 1997; Wuthnow 1996; Mongardini 1998; Neary and Taylor 1998; Zelizer 1994, 1996.) And in anthropology, psychology, political science, geography and history there are also scattered indications that the economic model of money is starting to lose its hold. (See, e.g., Berti 1991; Bloch 1994; Cohen 1998; Guyer 1995; Heath and Soll 1996; Helleiner 1998; Kahneman and Tversky 1982; Lane 1990; Parry and Bloch 1989; Leyshon and Thrift 1997; Thaler 1990; Shafir, et al. 1997; Shell 1995.) The following two sections will first discuss the classic approach to money and then propose the basis for a sociology of money.


Many eighteenth-century thinkers saw the monetization of the economy as compatible with or even complementary to the maintenance of a morally coherent social life (see Hirschman 1977; Silver 1990). But the transformative powers of money captured the imagination of nineteenth-and early twentieth-century social theorists. Money turned the world, observed Simmel ([1908] 1950, p. 412), into an ”arithmetic problem.” On purely technical grounds, the possibility of money accounting was essential for the development of impersonal rational economic markets. But traditional social thinkers argued that the effects of money transcended the market: More significantly, money became the catalyst for the generalized instrumentalism of modern social life. As Simmel ([1900] 1978, p. 346) observed: ”The complete heartlessness of money is reflected in our social culture, which is itself determined by money.”

The task of social theory was thus to explain the uncontested revolutionary power of money. Presumably, it came from money’s complete indifference to values. Money was perceived as the prototype of an instrumental, calculating approach; in Simmel’s ([1900] 1978, p. 211) words, money was ”the purest reification of means.” Unlike any other known product, money was the absolute negation of quality. With money, only quantity mattered. That ”uncompromising objectivity” allowed it to function as a ”technically perfect” medium of modern economic exchange. Free from subjective restrictions, indifferent to ”particular interests, origins, or relations,” money’s liquidity and divisibility were infinite, making it ”absolutely interchangeable” (pp. 373, 128, 441). Noneconomic restrictions in the use of money were unequivocally dismissed as residual atavisms. As money became nothing but ”mere money,” its freedom was apparently unassailable and its uses unlimited. With money, all qualitative distinctions between goods were equally convertible into an arithmetically calculable ”system of numbers” (p. 444).

This objectification of modern life had a dual effect. On the one hand, Simmel argued that a money economy broke the personal bondage of traditional arrangements by allowing every individual the freedom of selecting the terms and partners of economic exchange. But the quantifying alchemy of money had a more ominous chemistry. In an early essay, Marx ([1844] 1964, p. 169) had warned that the transformational powers of money subverted reality: ”Confounding and compounding … all natural and human qualities . . . [money] serves to exchange every property for every other, even contradictory, property and object: it is the fraternization of impossibilities.” As the ultimate objectifier, money not only obliterated all subjective connections between objects and individuals but also reduced personal relations to the ”cash nexus.” Half a century later, Simmel ([1908] 1950, p. 414) confirmed Marx’s diagnosis, dubbing money a ”frightful leveler” that perverted the uniqueness of personal and social values. And Max Weber ([1946] 1971, p. 331) pointed to the fundamental antagonism between a rational money economy and a ”religious ethic of brotherliness.”

The prevailing classic interpretation of money thus absolutized a model of market money, shaped by the following five assumptions:

1. The functions and characteristics of money are defined strictly in economic terms. As a qualityless, absolutely homogeneous, infinitely divisible, liquid object, money is a matchless tool for market exchange.

2. All monies are the same in modern society. Differences can exist in the quantity of money but not in its meaning. Thus, there is only one kind of money— market money.

3. A sharp dichotomy is established between money and nonpecuniary values. Money in modern society is defined as essentially profane and utilitarian in contrast to noninstrumental values. Money is qualitatively neutral; personal, social, and sacred values are qualitatively distinct, unexchangeable, and indivisible.

4. Monetary concerns are seen as constantly enlarging, quantifying, and often corrupting all areas of life. As an abstract medium of exchange, money has not only the freedom but also the power to draw an increasing number of goods and services into the web of the market. Money is thus the vehicle for an inevitable commodification of society.

5. The power of money to transform nonpecuniary values is unquestioned, while the reciprocal transformation of money by values or social relations is seldom conceptualized or else is explicitly rejected.

As the classic view reasons, the monetization of the economy made a significant difference to the organization of social life. For example, it facilitated the multiplication of economic partners and promoted a rational division of labor. But a link is missing from the traditional approach to money. Impressed by the fungible, impersonal characteristics of money, classic theorists emphasized its instrumental rationality and apparently unlimited capacity to transform products, relationships, and sometimes even emotions into an abstract and objective numerical equivalent. But money is neither culturally neutral nor socially anonymous. It may well ”corrupt” values and social ties into numbers, but values and social relations reciprocally corrupt money by investing it with meaning and social patterns.


The utilitarian model has had a remarkable grip on theorizing about money. Coleman (1990, pp. 119-131), for example, builds an extremely sophisticated analysis of social exchange yet continues to treat money as the ultimate impersonal common denominator. Even when analysts recognize the symbolic dimension of modern money, they stop short of fully transcending the utilitarian framework. Parsons (1971a, p. 241; 1971b, pp. 2627), for instance, explicitly and forcefully called for a ”sociology of money” that would treat money as one of the various generalized symbolic media of social interchange, along with political power, influence, and value commitments. In contrast to Marx’s definition of money as the ”material representative of wealth” ([1858-1859] 1973, p. 222), in Parsons’s media theory, money was a shared symbolic language; not a commodity, but a signifier, devoid of use-value. Yet Parsons restricts the symbolism of money to the economic sphere. Money, Parsons (1967, p. 358) contends, is the ”symbolic ‘embodiment’ of economic value, of what economists in a technical sense call ‘utility.”’ Consequently, Parsons’s media theory left uncharted the symbolic meaning of money outside the market: money’s cultural and social significance beyond utility. Giddens (1990) complains that Parsons incorrectly equates power, language, and money, whereas for Giddens money has a distinctly different relationship to social life. As a ”symbolic token,” money, in Giddens’s analysis, serves as a key example of the ”disembedding mechanisms associated with modernity,” by which he means the” ‘lifting out’ of social relations from local contexts of interaction and their restructuring across indefinite spans of time-space” (1990, pp. 22, 25, 21). Giddens’s interpretation still ignores the fact that despite the transferability of money, people make every effort to embed it in particular times, places, meanings, and social relations.

Anthropologists provide some intriguing insights into the extra economic, symbolic meaning of money, but mostly with regards to primitive money. For instance, ethnographic studies show that in certain primitive communities, money attains special qualities and distinct values independent of quantity. How much money is less important than which money. Multiple currencies, or ”special-purpose” money, using Polanyi’s term (1957, pp. 264-266), have sometimes coexisted in one and the same village, each currency having a specified, restricted use (for purchasing only certain goods or services), special modes of allocation and forms of exchange (see, e.g., Bohannan 1959), and, sometimes, designated users.

These special moneys, which Douglas (1967) has perceptively identified as a sort of primitive coupon system, control exchange by rationing and restricting the use and allocation of currency. In the process, money sometimes performs economic functions serving as media of exchange, but it also functions as a social and sacred ”marker,” used to acquire or amend status, or to celebrate ritual events. The point is that primitive money is transformable, from fungible to nonfungible, from profane to sacred.

But what about modern money? Has modernization indeed stripped money of its cultural meaning? Influenced by economic models, most interpretations establish a sharp dichotomy between primitive, restricted ”special-purpose” money and modern ”all-purpose” money, which, as a single currency, unburdened by ritual or social controls, can function effectively as a universal medium of exchange. Curiously, when it comes to modern money, even anthropologists seem to surrender their formidable analytical tools. For instance, twenty years ago, Douglas (1967), in an important essay, suggested that modern money may not be unrestricted and ”free” after all. Her evidence, however, is puzzlingly limited. Modern money, argues Douglas (p. 139), is controlled and rationed in two situations: in international exchange and at the purely individual personal level, where ”many of us try to primitivize our money . . . by placing restrictions at source, by earmarking monetary instruments of certain kinds for certain purposes.”

Modern money, however, is marked by more than individual whim or by the different material form of currencies. As Francois Simiand, one of Durkheim’s students, argued, the extraeconomic, social basis of money remains as powerful in modern economic systems as it was in primitive and ancient societies (1934). Indeed, Simiand warned against an orthodox rationalist approach that mistakenly ignores the persistent symbolic, sacred, and even magical significance of modern money. In recent work, sociologists, as well as anthropologists, psychologists, historians, and political scientists, have finally heeded the warning, proposing long-overdue alternatives to the standard utilitarian model of money.

Impatient with their former theoretical blinders, some anthropologists are now claiming modern money for their disciplinary terrain, casting off the fallacy of a single, culturally neutral currency. Parry and Bloch’s important collection of essays (1989) demonstrates the heterogeneity of money, showing how the multiple symbolic meanings of modern money are shaped by the cultural matrix. In psychology, new studies reject the notion that money is psychologically general, maintaining that instead money involves ”multiple symbolizations” (Lea et al. 1987, p. 335). An exciting literature on ”mental accounting” challenges the economists’ assumption of fungibility by showing the ways individuals distinguish between kinds of money. For instance, they treat a windfall income much differently from a bonus or an inheritance, even when the sums involved are identical.

A sociological accounting of money goes even further. Anthropologists reveal the multiple symbolic representations of modern money in societies outside the centers of capitalism, and psychologists explore individual or household-based differentiations between monies. A sociological model, on the other hand, must show how, even in the most advanced capitalist societies, different networks of social relations and meaning systems mark modern money, introducing controls, restrictions, and distinctions that are as influential as the rationing of primitive money. Special money in the modern world may not be as visibly identifiable as the shells, coins, brass rods, or stones of primitive communities, but its invisible boundaries emerge from sets of historically varying formal and informal rules that regulate its uses, allocation, sources, and quantity. How else, for instance, do we distinguish a bribe from a tribute or a donation, a wage from an honorarium, or an allowance from a salary? How do we identify ransom, bonuses, tips, damages, or premiums? True, there are quantitative differences between these various payments. But surely, the special vocabulary conveys much more than diverse amounts. Detached from its qualitative differences, the world of money becomes undecipherable.

The sociological model of money thus challenges the traditional utilitarian model of market money by introducing different fundamental assumptions in the understanding of money:

1. While money does serve as a key rational tool of the modern economic market, it also exists outside the sphere of the market and is profoundly shaped by different networks of social relations and varying systems of meaning.

2. Money is not a single phenomenon. There is a plurality of different kinds of monies; each special money is shaped by a particular set of cultural and social factors and is thus qualitatively distinct. Market money does not escape extra economic influences but is in fact one type of special money, subject to particular social and cultural influences.

3. The classic economic inventory of money’s functions and attributes, based on the assumption of a single general-purpose type of money, is thus unsuitably narrow. By focusing exclusively on money as a market phenomenon, it fails to capture the complex range of characteristics of money as a social medium. A different, more inclusive coding is necessary, for certain monies can be indivisible (or divisible but not in mathematically predictable portions), nonfungible, nonportable, deeply subjective, and therefore qualitatively heterogeneous.

4. The assumed dichotomy between a utilitarian money and nonpecuniary values is false, for money under certain circumstances may be as singular and unexchangeable as the most personal or unique object.

5. Given the assumptions above, the alleged freedom and unchecked power of money become untenable assumptions. Culture and social structure set inevitable limits to the monetization process by introducing profound controls and restrictions on the flow and liquidity of money. Extraeconomic factors systematically constrain and shape (a) the uses of money, earmarking, for instance, certain monies for specified uses; (b) the users of money, designating different people to handle specified monies; (c) the allocation system of each particular money; (d) the control of different monies; and (e) the sources of money, linking different sources to specified uses.

Exploring the quality of multiple monies does not deny money’s quantifiable and instrumental characteristics but moves beyond them; it suggests very different theoretical and empirical questions from those derived from a purely economic model of market money. In fact, a utilitarian theory of money had a straightforward task: explaining how money homogenized and commoditized modern social life. Its critics have a much more complex empirical agenda. The illusion of a fully commoditized world must be rectified by showing how different social relations and systems of meanings actively create and shape a plurality of qualitatively distinct kinds of money. Specifically, a sociological theory of money must come to grips with the remarkably different ways in which people identify, classify, interpret, organize, and use money.

Consider for instance the family economy. Domestic money—which includes wife’s money, husband’s money, and children’s money—is a special category of money. Its meanings, uses, allocation, and even quantity are partly determined by considerations of economic efficiency, but domestic money is equally shaped by ideas about family life, by power relationships, age, gender, and social class (Zelizer 1994; Pahl 1989; Singh 1997). For instance, a wife’s pin money—regardless of the amount involved—was traditionally reserved for special purchases such as clothing or vacations and kept apart from the ”real” money earned by her husband. Or consider the case of gift money. When money circulates among friends or kin as a personal gift for ritual events such as weddings, christenings, bar mitzvahs, or Christmas, it is reshaped into a sentimental currency expressing care and affection. It matters who gives it, when it is given, how it is presented, and how spent. Within formal institutions, money is again redefined this time partly by bureaucratic legislation (Goffman 1961).

These cases are not anomalies or exceptions to value free market money but typical examples of money’s heterogeneity in modern society. In fact, money used for rational instrumental exchanges is simply another socially created currency, not free from social constraints, but subject to particular networks of social relations and its own set of values and norms. A sociological theory of money must explain the sources and patterns of variation between multiple monies. How, for instance, do personal monies, such as domestic and gift monies, which emerge from the social interaction of intimates, differ from the imposed institutional money of inmates? How does the social status of transactors affect the circulation of monies? What determines the relative rigidity or permeability of boundaries between monies? And what are the patterns of conversions between them?

Developing a sociological model of multiple monies forms part of a broader challenge to neoclassical economic theory. It offers an alternative approach not only to the study of money but to all other aspects of economic life, including the market. In the long run, a proper sociological understanding of multiple monies should challenge and renew explanation of large-scale economic change and variation. It should illuminate such phenomena as aggregate expenditures on consumer durables, rates of saving, response to inflation, income redistribution, and a wide range of other phenomena in which individual consumer actions make a large macroeconomic difference. In the sociological model, economic processes of exchange and consumption are defined as one special category of social relations, much like kinship or religion. Thus, economic phenomena such as money, although partly autonomous, intertwine with historically variable systems of meanings and structures of social relations.

Next post:

Previous post: