20th October 2014

Infrastructures of money

I write this from a broken-down train, sitting somewhere between London and Manchester. One minute we were happily whizzing along at over 100mph, then a loud bang, sparks outside the window, and a burnt rubber smell in our carriage. Onwards a little further, then another bang, more sparks, tangible panic amongst fellow passengers, and everything slowly grinding to a halt. Panic has now receded. There is, it seems, some kind of issue with the pantograph (a term I’ve just learned) – the foldable arm that connects the train to the overhead electrical cables.

This little drama seems appropriate. The train journey is the final leg in a return trip from Los Angeles where I was a part of some particularly intense discussions about just how important rails and infrastructures are – although these conversations turned around rails of a quite different kind: those that keep money moving. They took place at the Money as Communication: Technology, Culture, and Economic Practice conference, hosted by the Annenberg School for Communication and Journalism, University of Southern California on the 10th and 11th October and organised by Manuel Castells, Jonathan Aronson, and Lana Swartz.

It’s Bill Maurer and his work on infrastructures of payment that has drawn our attention to the presence and importance of monetary rails (the metaphor is draw directly from payment professionals). What he shows is that money simply cannot be properly understood without paying attention to what he calls the ‘mundane and subterranean’ practices that keep money moving, those largely invisible conduits that, for instance, make it possible for your credit or debit card to be swiped at (or inserted into, or tapped onto) a terminal and for the correct amount to be successfully directed to the merchant and debited from your account.[i]

One of the things about infrastructures of all sorts, as science and technology studies scholars have repeatedly pointed out and as is currently being made painfully obvious to me, is that we often only recognise their importance when they fail.[ii] When it comes to the infrastructures of money, on an everyday level, we experience this in fairly minor ways: a merchant’s terminal won’t establish the necessary connection to the card issuer, or perhaps the magnetic strip or chip on a card fails to be read. It is however rather striking just how reliable monetary infrastructures now tend to be – although perhaps this should in fact not be surprising at all. Imagine the consequences for the global economy if monetary transactions stopped flowing on a larger scale: if the world’s clearing houses were suddenly unable to do their work, if trading on the global financial markets were interrupted, even briefly. There are many powerful actors with a strong interest in ensuring that money is kept in motion, ceaselessly.

This very fact, however, only makes it all the more important that we understand exactly what it takes to accomplish this feat. This is the work that was undertaken at the conference across a series of compelling presentations and in the resulting discussions. Max Haiven, set the tone by presenting a series of artistic engagements that each interrogated the very (material, political, imaginative) conditions of monetary distribution (for artists, one of which of course is the art market itself, insights into which were provided by Michael Nock, in the conference keynote). This included Axel Stockburger’s work ‘Quantitative Easing (for the street)’ in which a golden pillar was installed at the Kunstplatz in Vienna, which would, at random intervals, spit out Euros into the square (see below). Stockburger, in an email conversation with me after the conference, noted some of its fascinating and unexpected effects. The provision of an unpredictable mechanism for distributing cash – a new monetary infrastructure, in effect – resulted in the assembly of a loose new social group, many members of which were homeless. Some in the group reported that, while at first there were occasional fights over coins, they had now set up a system in which the money the pillar would spit out was shared amongst members of the group. This new social and monetary practice had to be continually restabilised given that newcomers would keep arriving at what was, after all, a public space and would need to have the ‘rules’ explained to them. Haiven is curating an online collection of such works by an array of artists who, like Stockburger, are interested in using (and destroying/destabilising/abusing) money as part of their work (which can be found at http://moneyandart.tumblr.com/). If you look at the collection, as he did in his talk, you begin to recognise some commonalities: many are involved in attempts to create or query monetary utopias; many are also concerned with challenging our assumptions about the materiality of money; and many draw out the tension in money between the often extreme intimacy of the monetary encounter and the potentially extreme distancing effects that monies can perform.

020-Infrastructures-of-money

Photo: Iris Ranzinger. See more at http://www.stockburger.at/qe/

 

 

 

 

 

 

 

 

Bill Maurer and Lisa Servon further picked at this question by exploring conditions of monetary possibility operating at distinct scalar registers: in Maurer’s case the historical and contemporary efforts to create standardised payment infrastructures, involving both governmental and private actors, and, in Servon’s, what it takes to provide financial services that actually work for those on lower-incomes. Maurer expanded on the theme of monetary rails by looking in detail at the ‘Cambrian explosion’ (as Scott Mainwaring, who was also present, has put it) in payment forms, including asking whether, when you look closely at their toll-based models of revenue generation, it is in fact accurate to characterise the payments industry as capitalist. Servon drew on her rich ethnography of check cashing and payday lending services, in which she worked as a teller for companies in the South Bronx and Oakland, California. While the services such companies offer are undoubtedly expensive, what Servon shows is that what critics fail to appreciate is both just how important the liquidity they provide to their users really is, and how successfully such services mesh into users’ everyday lives. In particular when compared to other more widely respected financial services, they in fact appear to perform financial transparency better, and they are both more flexible and better at managing multiple ongoing sets of face-to-face relationships.

If we are to understand money we also need to understand just how diverse it is. While cash is the monetary form that has the hold on the popular imagination, we are at a historical juncture in which monies are in the process of proliferating. Nowhere is this more visible than when it comes to the rise of so-called ‘crypographic currencies’, most prominent among which is Bitcoin. These currencies challenge conventional understandings of what it takes to produce and stabilise money. While the dominant forms of contemporary money have long done without a corresponding material guarantee (Richard Nixon ending the convertibility of the US dollar into gold in 1971 being perhaps the most high profile submission to a more pragmatic understanding of money in modern times), what has almost universally been retained is the notion that what money does still need is a nation state acting as its ultimate guarantor. Currencies like Bitcoin quite explicitly challenge this, in effect replacing the authorising role of the state with a series of cryptographic and procedural protocols. These infrastructures were the subject of the conference’s second panel. Finn Brunton explored the diversity of cryptographic currencies. Alongside Bitcoin a range of other currencies are springing up, including the likes of DarkCoin, LiteCoin, and Dogecoin. While they share a confidence in the power of online protocols to guarantee their operations, as Brunton shows, they each invoke particular norms about, for instance, privacy and anonymity which, in turn, correspond to distinct communities of practice. Sarah Jeong meanwhile reminded us both of the legal infrastructures into which these currencies are finding themselves inserted, often uncomfortably, and of the presumptions that are often made about their operation. Just how anonymous, for instance, is Bitcoin? Anonymity, as she made quite clear, is in fact far from guaranteed. Indeed, this very fact has contributed to the emergence of currencies like DarkCoin. This then points to the appeal of protocol that is at the heart of these monies, just as it is at the heart of almost all other monies. The presumption, as Lana Swartz argued, is that as long as the protocol – the requisite set of technical apparatuses – is set up in just the right way, the problems that are seen to be associated with competing monetary forms will be remedied. What this presumption overlooks is that protocol is never, and can never be, disinterested. Embedded in all monetary protocols are interests and interest groups. This being the case, Swartz asked whether we might therefore need to open up the composition of monies to forms of collective deliberation. Might, for instance, a form of radical, democratic liberalism in fact be a more radical gesture than the forms of closure and exclusion that monies routinely perform?

Despite their apparent promise, where cryptographic currencies have however so far failed is to become monetary forms embedded in the everyday. Just try and pay for your coffee, your groceries, your bills with Bitcoin and see how far you get. As a number of speakers noted, even those isolated venues that claim to accept cryptographic currencies often, actually, don’t in practice: staff can’t remember the procedures, technologies don’t work, and, presumably, customers often simply can’t be bothered (these are also some of the findings of the fascinating Los Angeles Payment project run by Alexandra Lippman and introduced to the conference by Taylor Nelms). And innovations like Bitcoin ATMs remain niche, somewhat utopian projects, standing in bars and cafes underused, important more for the values they summon up than for the services they offer.

What advocates for these currencies perhaps haven’t fully grasped is just how difficult it is to develop successful infrastructures of the monetary everyday. They could do with spending some time with David Stearns and Michael Palm and perhaps also reading Stearns’ book on the history of the Visa payment system. Drawing on this, Stearns focused on the controversies that surrounded a technology so apparently mundane as to now often go unnoticed: the magstripe – that black magnetic strip on the back of credit and debit cards (and many other cards besides) that delivers card information to a corresponding terminal by virtue of a simple swipe. What an effort it took to make such swipes effortless and reliable: new technologies had to be developed, fraudsters combated, an industry corralled, and merchants convinced. Palm highlighted the importance of another mundane monetary technology: the numerical keypad and how it has variously changed and developed, as well as looking at the rise of new payment technologies like Square that allow merchants, with its device plugged into the headphone jack of an iPad, to quickly start taking card payments. What these historical and contemporary cases reveal is that new monetary infrastructures are invariably implicated in new distributions of monetary responsibility. With the rise of so-called ‘chip and pin’, for instance, we are witnessing the move of responsibility for fraud from issuers to merchants. Perhaps, as Palm wondered, the next move will be to shift responsibility onto consumers themselves. This would not be surprising. It is, after all, what we’ve seen in other domains. Caitlin Zaloom’s paper explored the shifts in responsibility that have and are being experienced by US households. She contrasted some key historical legislative shifts, notably the G.I. bill, which was signed into law in 1944, to the present state of affairs. What emerges, argued Zaloom, is the creeping shift of responsibility for calculation of future outcomes onto households, and the gradual retreat of state-support. This is then a shift in what Zaloom called the ‘infrastructures of foresight’ that shape households’ calculative possibilities, with an increasing expectation that they should calculate their way to a prosperous future, over a long life-course. The reality, however, in the context of economic uncertainty and, notably, the spiralling cost of higher education, is that is increasingly impossible to do so.

This all highlights that money is, as the conference organisers suggested to us, communication. Money is a mechanism that allows people, organisations, and other entities to interact with and to transfer information to each other, while also contributing in multiple ways to the practices and imaginaries of what we know as the ‘economy’.[iii] And, as communication, it is deeply rooted in reproducing and shaping all kinds of stable social forms – norms, values, institutions, communities, etc. Important to note here is that the precise ways in which monies are formatted matters greatly. It is not, and cannot be, a neutral mediator of value.

That said, it is not just the infrastructures of monies themselves that affect what monies are and what they become. Monies are also always in a process of transformation in their encounter with the situated ways in which they are set to work. This is an observation that has been most influentially made by Viviana Zelizer, who has shown that monies are always multiple, being transformed by the people and communities they come into contact with as monies are used, stored, and exchanged.[iv] What has received less attention is that monies are also transformed by the sets of technological apparatuses that they pass through. This is the question that concerned the conference’s final panel, and specifically apparatuses that bring together money and data. Gina Neff’s work concerns itself with the monetization of healthcare data. Drawing on this, Neff asked what if we were to consider data not simply as something to which monetary value can be attached, but, in particular in the contemporary socio-historical moment, as itself mirroring many of the properties of money? Data, as she showed, can store value and is, through the processes in which individual points of data are decontextualized, increasingly fungible. It may even, in some instances, act as a medium of exchange. Josh Lauer and I focused on technologies surrounding the assessment of creditworthiness. Lauer looked back into the early histories of consumer credit – the 19th and early 20th centuries in particular – to show the way in which apparatuses of consumer surveillance have long been at its core. The effect is to turn credit money into an entity which is constantly reaching out into the pasts of borrowers in order to predict their futures. My paper drew on ongoing research, on which I am collaborating with Lonneke Van der Velden at the University of Amsterdam, into a small but increasingly influential set of payday lenders that are assessing creditworthiness less on the way in which a user has interacted with credit products in the past and more in relation to diverse and ostensibly mundane data that borrowers ‘leak’ as they browse online. This data potentially ranges from a user’s IP address, to the particular browser they use, to their screen resolution, to the plugins they have installed. I’ve written about such processes elsewhere on this site. What I argued at the conference is that the result of such data-mediated forms of monetary communication is to multiply the registers of monetary value are in play, with information that surrounds the potential transfer of value, that seemingly has nothing directly to do with the product itself, becoming an asset for the company as it keeps trying to improve its ability to predict repayment behaviour.

These presentations thus echoed a theme that cross-cut the conference, that paying attention just to the reasons behind the transfer of value from one person, place or organisation to another, or its effects, runs the risk of occluding the important social and material infrastructures that surround the transfer of value itself. Attending to monetary communication, and in particular forms of communication that are shaped and mediated by monetary infrastructures, is certainly one way to continue the work of rebuilding social and economic understandings of money given that this is a task that has, for too long, remained neglected.

Oh good, my train’s moving again. Infrastructure restored.

Acknowledgements

This article has been co-posted on Transactions: A Payments Archive. I would like to thank the three organisers for inviting me to the conference. Particular thanks go to Lana Swartz for her work in conceiving the event and for bringing us all together, as well as to Nahoi Koo and Reanna Martinez for their help with crucial matters of infrastructure. I am also grateful to Axel Stockburger for granting permission to use the Quantitative Easing image. Thanks also to Robbie Kett, Taylor Nelms, and Bill Maurer for hosting this on Transactions.


[i] Maurer, Bill. “Payment: Forms and Functions of Value Transfer in Contemporary Society.” Cambridge Anthropology 30, no. 2 (2012), p. 30.

[ii] See in particular Bruno Latour’s description of exactly the situation I currently find myself in, in Latour, Bruno. “Trains of Thought: Piaget, Formalism and the Fifth Dimension.” Common Knowledge 6, no. 3 (1997): 170–91. Available here.

[iii] I am drawing here in part on the conference call, written by Castells, Aronson and Swartz.

[iv] Zelizer, Viviana. The Social Meaning of Money: Pin Money, Paychecks, Poor Relief, and Other Currencies. Princeton, NJ: Princeton University Press, 1997.

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