Capitalism, money and banking: a critique of recent historical sociology

A conception of money as a 'neutral veil' masking a 'real' economy was adopted by orthodox economic theory after the Methodenstreit, and is also to be found, in a different form, in Marxian political economy. Both derive from an erroneous functionalist and anachronistic 'commodity' theory of money which, as Post-Keynesian economists argue, cannot explain the distinctive form of capitalist credit-money. Orthodox economic theory and classic Marxism have tacitly informed and flawed historical sociology's understanding of money's role in capitalist development. Mann and Runciman, for example, consider the 'economy' exclusively in terms of the social relations of production and imply that money is epiphenomenal and is to be explained as a response to the needs of the 'real' economy. They do not recognize the structural specificity of capitalist money and banking nor its importance. An alternative account of the autonomous historical conditions of existence of the specifically capitalist form of bank and state credit-money and its role in capitalist development is outlined.     

Transnational marriages in Yiwu,China: tensions over money

In this article, I explore the role of transnational marriages in the activities and strategies of trading networks, through the lens of money and uncertainty in marriage. I argue that uncertainty in spousal relations challenges the durability of such unions and hence the effectiveness of their role in trading activities. These uncertainties are shaped by intertwined factors, including especially the embedded relationship between commercial and social networks (for example, business partners, kinship, friendship) and spousal relations, the differing cultural values and practices of the partners to such unions, stereotypes, varying forms and degrees of trust and mistrust, and the dynamics of global markets and state policy. Uncertainties driven by these factors exacerbate mistrust in both marriages and trading relations; they also shape shifting orientations toward future life. Therefore, I argue that the role of marriage in trading activities should be neither simplified nor romanticized.     

The Developmental Life Course Perspective: A Conceptual and Organizing Framework for Human Behavior and the Social Environment

The developmental life course perspective (DLC) focuses attention on the socio-historical context in which we live our lives as it influences opportunities and life events that produce cumulative advantage or disadvantage. These large contextual forces shape preference and behavior, and it is within this context that the individual exerts personal agency. This perspective has particular utility as a conceptual framework for human behavior and the social environment courses as it integrates individual-level behavior within a social forces context. This article describes the DLC and its application as both a conceptual and an organizing framework for human behavior and the social environment courses at the masters level. It is illustrated with a case example.     

Money matters: An exploratory study of the socio-cultural context of consumption, saving, and investment patterns

This study focuses on 36 professional South Asian (Indian) families in a metropolitan city in Canada in order to understand motives for financial behavior. In accordance with the Hindu world view, Indians view wealth acquisition as necessary for the natural progression of an individual's life and take a long view of time when it comes to investment decisions. Their primary purpose is to invest money in order to provide for their children's education. Their cultural roots allow them to take a long-term view and makes them more risk tolerant. Although these families take economic criteria into account, such criteria alone do not fully explain their consumption, saving, and investment patterns. It would appear that their need for saving determines their consumption, not the other way around. To understand their financial behavior, one has to identify the cultural worlds in which Indians live. The study highlights the importance of understanding the socio-cultural context of decisions that may appear to be purely economic decisions at first sight.     

Explaining Asian economic organization

Conclusion Social theorists are challenged to explain an increasingly complex economic order. It is clear that old theories that posited a developmental sequence from undeveloped to industrialized cannot explain the diverse patterns of industrialization that exist. Certainly, Japan is as developed as Western nations but its patterns of development, its economic norms, and its industrial practices are substantially different from the United States and even its Asian neighbors in Taiwan and South Korea. For example, the fact that Japan has the largest banks in the world, and Taiwan relatively few and weak ones (despite the world's largest per capita foreign reserve holdings), cannot be explained only by recourse to market or state factors, although each play a role. Both countries were literally awash in money in the 1980s, and both countries are clearly capitalist societies where banking institutions are assumed to be critical to economic development, as they have been in the West. But more than market and political economy factors are at work here.In Japan, historically developed institutional factors, dating from before the Meiji Restoration and industrial revolution, created conditions for business group self-financing. Modern-day keiretsu, such as Sumitomo and Mitsui, with their huge banks as centerpieces, trace their origins to pre-industrial merchant houses under family ownership. Inheritance practices in Japan are based on primogeniture, inheritance of the entire fortune by the eldest son. This practice allowed merchant family fortunes to remain intact under the stewardship of the heir. Successful families thus had huge sums of money available to finance the businesses of affiliated branches operating under the badge of the mother house. The descendents of the zaibatsu merchant houses, the keiretsu, continue to rely on their own sources of finance, now institutionalized in banks that serve their credit and other financial needs. To see large banks encapsulated within business networks as only the outcome of distorted market conditions, or as only the result of a powerful business class, misses the institutional origins and overlooks the contemporary institutional underpinnings of the Japanese banking system. Ironically, the weakness of Taiwanese banks can also be traced to a strong family system. Chinese societies practice partible inheritance, that is, division of a family estate equally among all sons. As a result, families divide their fortunes every generation, mitigating against the development of large sums of money. Instead, there is great pressure within families to develop multiple businesses so that at the death of the family head, each son can claim an independent enterprise. Because all Chinese families face the problem of setting up children in business (being an employee is not a desirable status in Taiwan as it is in Japan), a range of informal lending arrangements have arisen within families and among friends to generate investment capital. Strong social norms dictate that one assist financially a kin member or close friend. Banks play a relatively minor role in Taiwan because alternative institutional arrangements, also with preindustrial origins, have obviated the need for banks for some financial functions. Again, market factors are important to understanding the strong curb market and weak formal banking system in Taiwan, and political economy factors, notably the absence of a strong central bank, are also significant. But an institutional explanation integrates these factors into an explanation that begins with the character of the society being explained. We need theories that can account for difference without reducing cases to unique instances, that do not presume the individualistic character of Western social orders, and that are sensitive to an array of ideal as well as material factors operating in different locations. Although political economy, market, and culture theories each have contributions to make, an institutional perspective of the type I outline may be especially suited to the comparative analysis of emerging world economic organization. I think, ironically, that a sensitivity to institutional factors may yield better theories of the West. Rather than assume that the United States and Europe are the exemplars of advanced capitalism, the closest empirical instances of the idealized competitive market, Japan and other Asian nations are suggesting that the West is simply one form of capitalist economic development, an expression no doubt, of the West's own institutional heritage. When we relinquish ethnocentric perspectives we can begin to look at ourselves and our own institutional heritage more clearly.     

Spousal Abuse Among Immigrants From Ethiopia in Israel

This ethnographic study obtains first‐hand information on spousal abuse from Ethiopian immigrants in Israel. Data include 23 interviews with male and female immigrants of various ages and 10 professionals who worked with this community as well as observations and documents. The findings, verified by participants, show that during cultural transition, the immigrants’ code of honor, traditional conflict‐solving institutions, and family role distribution disintegrate. This situation, exacerbated by economic distress, proved conducive to women’s abuse. Lack of cultural sensitivity displayed by social services actually encouraged women to behave abusively toward their husbands and destroy their families. Discussion focuses on communication failures in spousal‐abuse discourse between immigrants from Ethiopia and absorbing society, originating in differences in values, behavior, social representations, and insensitive culture theories.     

THE EVOLUTION OF A FREE BANKING SYSTEM

The institutional features of models of unregulated monetary systems have often been arbitrarily and implausibly assumed. This paper instead provides realistic grounding for important features by constructing a logical evolutionary account of free banking. Sophisticated and orderly arrangements are shown to emerge from competition and the pursuit of less costly methods of payment. The emergence of standardized commodity money is followed by the development, in turn, of basic money-transfer banking, easily transferable bank liubilities, and clearinghouses. The features of an evolved free banking system differ from those assumed in recent models of competitive payments systems.     

THE DEMAND FOR EXCESS RESERVES, LIABILITY MANAGEMENT, AND THE MONEY SUPPLY PROCESS

Commercial bank behavior is not adequately dealt with in existing macro models of the financial sector. The central role of a demand for excess reserves (or free reserves) function in models of the money supply process is particularly suspect. In this paper, it is argued that changes in commercial bank behavior induced by alterations in economic and financial conditions and various banking regulations, along with the central bank's approach to policy, have combined to alter the excess reserve function and the relationship between bank reserves and the money supply. Empirical work presented suggests that the "demand" for excess reserves has indeed undergone structural change. Thus, the study indicates that conventional approaches to commercial bank behavior and the demand for excess reserves need to be reworked.     

Civic Engagement and Economic Opportunity Among Low-Income Individuals: An Asset-Based Approach

This study uses an asset-based approach to examine the ways social and human capital accessed through civic engagement may serve as a pathway toward economic opportunity for low-income individuals. Using a qualitative approach, this study draws on interviews with 31 low-income individuals who are civically engaged in a range of activities, including community organizing, giving money, informal engagement, religious participation, and volunteering. Findings contribute to the literature suggesting that study participants were often able to mobilize and deploy the social and human capital assets accumulated through different types of civic engagement into employment and education opportunities. However, embedded within social and human capital assets are also examples of the ways structural factors influenced whether study participants could transfer social and human capital assets acquired through civic engagement into economic opportunities.     

Does “fighting back” make a difference? The case of the Canadian auto workers union

Union revitalization requires mutually reinforcing efforts in organizing, political action, and collective bargaining. We examine the experience of the Canadian Auto Workers (CAW). In addition to membership growth, three bargaining outcomes are analyzed: (1) wage gains; (2) the ability to resist a trend towards longer duration collective agreements; and, (3) success in negotiating same-sex spousal recognition. In each of these areas the CAW has articulated a policy and then made gains in both absolute and relative terms. The CAW’s renewal strategy links these bargaining goals with social activism and membership growth through mergers and new organizing.     

Community Context,Women's Natal Kin Ties,and Demand for Children: Macro-Micro Linkages in Social Demography1

Abstract Recent research in many areas of social demography has begun to address the implications of cultural, social, and economic context for individual–level preferences and behavior. We expand on this theme by arguing that multiple levels of context may simultaneously direct individual–level strategies. We focus on the relationship between women's natal kin ties and their demand for children, a substantive area in which context is thought to be particularly important. We use a combination of ethnographic and survey data to measure contextual characteristics, women's ties to their natal families, and couples' fertility preferences and behavior. Our results demonstrate that particularly supportive relationships with natal kin have more influence on fertility preferences and behavior than contact with natal kin, although both dimensions are important. The results also show that even within the same cultural context, radically different community environments can produce opposite consequences of ties to natal kin.     

‘Intermediation’ in used goods markets: Transactions,confidence, and social interaction

An economic sociology approach grounded in an empirical study of second-hand sporting goods stores is used to examine ‘intermediation’ in used goods markets and its impact on confidence-building in market relations. Neo-institutional economic interpretation is contrasted with interpretation that uses a Goffmanian microsociological approach. The first type emphasizes the development of market credibility, analyzing the cognitive and formal arrangements (contractual and technical) which, by ‘professionalizing’ the behavior of self-improvised salespeople, reduce both ‘market opacity’ and the threat of opportunistic behavior. The second shows that such analysis is insufficient for understanding how actual relations in the marketplace are maintained. It aims to describe how partners to a transaction co-produce confidence, using their social skills and signaling honesty by the way they allow the quality of second-hand goods to be assessed. The two approaches converge, however, in that they both involve recognition of the limitations of analysis in terms of personal networks and the impersonality of economic transaction determinants. The article concludes by calling for closer attention to social relations in the marketplace and greater focus on how those relations are depersonalized.     

Global networks of money and information at the crossroads: Correspondent banking and SWIFT

This article explores how transaction information is a fundamental element enabling and fostering global flows of money. Financial systems, constructed around account-based money, require infrastructure, which is separated into two parts: messaging and settlement, performed via trusted agents. This separation has allowed the geographical expansion of banking, and to this day constitutes a key architecture of increasingly global networks of money. Focusing on the correspondent banking system and the Society for Worldwide Interbank Financial Telecommunication, this article demonstrates the workings of this infrastructure in cross-border payments and in enacting economic sanctions. This sociotechnical infrastructure is a crucial yet overlooked area of global banking, which makes global economic and financial activity possible in the first place. Importantly, by analysing the organizational architecture of the global payments system and including the actors and agencies within it, we elucidate the (changing) relationships between data/information, geographies and power, contributing to the formation of a literature that conceptualizes financial infrastructure.     

At‐Home Father Families in the United States: Gender Ideology,Human Capital,and Unemployment

The rising population of stay‐at‐home fathers is driven by economic conditions, human capital, and changing gender ideology. When unemployment rates increase, women become breadwinners in these families. The growing gender education gap is a crucial factor in spousal work and caregiving arrangements. The authors test these propositions by tracking individuals using data from the National Longitudinal Surveys of Youth and the Current Population Survey. They find that unemployment rates are associated with having both caregiving and unable‐to‐work stay‐at‐home father families and that the probability that households choose stay‐at‐home father arrangements is greater when mothers have more education than fathers. Finally, individual differences in gender ideology have strong effects on the probability that families choose a caregiving stay‐at‐home father family structure.     

Economic Incentive,Embeddedness, and Social Support: A Study of Korean‐Owned Nail Salon Workers’ Rotating Credit Associations1

Much of the past research on rotating credit associations (RCAs) in the U.S. Korean community has been conducted in the context of Korean entrepreneurs’ success in small businesses. By contrast, little has been known about the significance of RCAs in the lives of Korean immigrant workers. Based on a sample of Korean female workers at Korean‐owned nail salons in the New York–New Jersey area, the first aim of this study is to address whether Korean immigrant workers, like Korean immigrant merchants, take into account RCAs as a way to save money or raise capital. Second, this study also speculates about the importance of embeddedness (Granovetter) and social capital (Portes and Sensenbrenner) views for both economic behavior and a likelihood of malfeasance by RCA participants. Lastly, this study regards RCA membership as a mechanism of social support for its participating members. Overall, the analyses provide evidence that RCA membership at nail salons leads to both economic benefit and social support for some of its participants, and that embedded networks and an accompanying sense of trust have some connection to the suppression of its members’ latent malfeasance.     

Money in remarriage: keeping things simple – and separate

This paper investigates money matters in remarried couples. The number of such couples is on the increase, and their financial affairs are likely to be more complex and conflictual than for first-married couples, but there has been little research attention paid to this group in Britain. The present study explores patterns of control and management of money by means of data from semi-structured interviews with 20 couples in which one partner or both had been married before. The men and women were interviewed separately, but in the majority of cases, simultaneously, in separate rooms. This yielded data from 38 interviews since two men declined to take part in the study. Ages of respondents ranged from 28 to 83, with the majority in the 30–55 range. At the time of the study, only half still had dependent children, and not all of the latter were co-resident. A key finding of the study is a degree of separateness in financial arrangements that is in sharp contrast to earlier findings. As many as half of the couples were using an Independent Management system, compared with less than 2 per cent of couples in general. For those with children from previous relationships, this separateness was especially marked in the way they wished their assets to be treated after their death. However, in line with earlier studies, the balance of economic power in second and subsequent marriages still appeared to favour the men, who generally had larger incomes and owned more assets in their own names.     

Social Isolation and Spousal Violence: Comparing Female Marriage Migrants With Local Women

This research examined the impact of network participation, social support, and social control on the violence victimization of female marriage migrants by a spouse. Data were from a household survey of 492 cross‐border and 379 local married couples in Hong Kong in 2007. The findings indicated that female marriage migrants were more vulnerable to spousal violence and more socially isolated, compared with local women. Husbands of marriage migrants were also more socially isolated compared with men who married locally. The network participation of both husband and wife was associated positively with spousal violence against women, whereas their perceived social control was associated negatively with violence. Female marriage migrants' greater vulnerability to spousal physical assault was a result of their younger age compared with local women, but their greater vulnerability to spousal psychological aggression and sexual coercion was related, in part, to their own and their husbands' network participation as well as their level of social control.     

Consumer Socialisation and Value Orientations among Estonian and Chinese Young People

This paper asks if Estonian and Chinese tweens’ access to pocket money influences their brand valuation, as well as value orientations in the context of perceived peer popularity and personal well‐being. Surveys conducted in autumns 2006 (China n = 188) and 2007 (Estonia n = 111) show an inherent cultural resistance among tweens in both countries towards using material standards to evaluate people and social relations. Access to own money correlates strongly with more consumerist values and strengthen the initial indications that individualist and expressive values are more highly esteemed by Estonian tweens, while social inclusion and approval are more vital for the Chinese.     

Measuring consumer perceptions of payment mode

Although existing scales assess perceptions of money per se, none capture the mental and emotional experiences that the corporal quality of the payment mode generates. Historical and sensory associations with payment modes generate differential cognitive and emotional sensitivity in mental accounts, and influence the type, value and amount of products purchased. Although an increasing amount of attention has been devoted to the influence of payment mode on spending behavior, and little effort has been devoted to developing an appropriate measurement scale to capture consumers’ cognitive and emotional associations with payment modes. To address this gap in the literature, this study developed a conceptual and empirical framework with a sample of approximately 800 participants, and shows how the constructs and the scales capture perceptions of payment modes. The 19-item PPM scale represents four dimensions: emotions relating to cash and card based payment modes, social and personal gratification and money management. The PPM measurement scale demonstrates acceptable reliability and shows that consumer perceptions of payment modes influence spending behavior and predict ownership of financial cards in possession. The scale is useful in understanding consumer cognitive and emotional associations with payment modes, particularly the use of “owned money” and how these associations impact on payment mode choice.     

Social capital and public goods

Previous literature suggests positive relationships between social capital, pro-social behavior and subsequent economic development. We analyze the relationship between social networks and trust (two measures of social capital) and self-reported charitable contributions of time and/or money (pro-social behavior) using data collected from two ethnically distinct, low-income neighborhoods. We find that large social networks are positively related to charitable contributions, but that the effects of trust are less robust. We also find that social networks that are more geographically dispersed tend to be larger. Our results indicate that the social capital in a neighborhood is more important than ethnicity, ethnic diversity, or other demographic information in understanding public goods contributions.