Precisely at the end of 1991, Albanians would bring out their old vocabulary the word, completely unknown, fajde [moneylending], a word to be now used at every hour, every minute, every second.
āEdmond LaƧi, Revista Klan, 1997
Unlike in other countries, [in Albania, the pyramid firmsā] phenomenon is entirely a private one and, except for the chance speculations, we can say that the money of Albanians is the most honest money there is.ā¦ The big firms of the informal sector have serious investments in important and profitable sectors of the [national] economy, from commerce, food processing and production, to tourism and mining.
āFormer president Sali Berisha, November 26, 1996
Most international media accounts of the spectacular collapse of the pyramid firms in 1997 in Albania center on the story of Maksude KadĆ«na.1 A former worker in a communist shoe factory, KadĆ«na had established one of the most notorious pyramid firms (firma piramidale), Sude. Legally registered as a limited liability company (shoqĆ«ri me pĆ«rgjegjĆ«si tĆ« kufizuar), in 1993, Sude began to take deposits from a growing number of investors, officially referred to as kreditor/Ć« (creditor/s, investor/s). At the beginning of its activities, in 1993, Sude offered an interest return of 7ā8 percent; by November 1996, the promised interest return spiked to 50 percent. Sude was the first of the seventeen firms to fold in early 1997. This ended the boom of what came to be known as the pyramid firms of the early 1990s Albania.
During my conversations with kreditorĆ«, I learned about how they waited in line for their returns outside KadĆ«naās modest communist apartment in December 1996. Newspapers at the time reported their anxiety and frustration (Babaramo 1996a, 7). KadĆ«na suspended repayments of deposits but promised to restart business in a few weeks. But Sudeās counters did not reopen. By the end of that year, KadĆ«na announced that she did not have the cash to give back to her kreditorĆ«. She turned herself in to the authoritiesāthe only firm owner to do soāand was eventually convicted and given a reduced sentence of five years in prison for defrauding her investors. In mid-1997, Sudeās operations were taken over by the Supervisory Group for the Pyramid Firms (Grupi MbikqyrĆ«s i Firmave Piramidale), which concluded the case on Sudeās bankruptcy in December 2013.
Maksude KadĆ«na captured local and international news headlines in early 1997 as a āGypsy fortune-tellerā who āclaimed to look into a crystal ballā (Andrews 1997). As the other firms followed in the footsteps of Sudeās collapse, KadĆ«na became an icon of the fraudulent magic, or āoccult practicesā (Comaroff and Comaroff 1999), associated with fajde (moneylending), the practice of nonbank moneylending mediated by the firms. In 1997 the ethnicized and gendered depictions of KadĆ«naāpropagated by locals and internationals alike (see Zogaj 1998, 139ā45)āprovided additional fodder for the claims that the firms in Albania were an instance of a āmisreading of capitalismā in a country ānewā to free-market institutions (New York Times 1997, 18). To mainstream economists and International Monetary Fund (IMF) policymakers, depictions of KadĆ«na as a Gypsy fortune-teller preempted harder questions about the benefits and shortcomings of shock-therapy reforms implemented in Albania and across the postsocialist world during the early 1990s. These representations continue to circulate in current public discourse; they often serve as a metaphor for state-sanctioned fraud and derailment from sound economic policy.
Looking back at the archival record, and in discussions with kreditorĆ« a decade after the firmsā collapse, I encountered a much more nuanced vocabulary around the firms. For instance, although many reproduced the same gendered and ethnicized mockeries of KadĆ«na, reporters and kreditorĆ« alike also used a familiar register of banking, investment, and credit, often describing their relation to the firms as that of investors or stockholders. To this day, many continue to call themselves kreditorĆ«. In the course of conversations with former kreditorĆ«, I began to notice how these distinctions in terminology also framed shifting understandings of legitimate/illegitimate forms of finance. For instance, when I asked one of the kreditorĆ« to explain why he had trusted the pyramid firms, he corrected me: ā[these firms] were not called pyramid firms [before 1997] but borrowing companies [kompani huamarrĆ«se] because it is well known that with a pyramid firm you come out without a profit.ā2 This distinction between solvent companies and speculative pyramid firms points to a shift in registers of legitimate and illegitimate finance from before to after the collapse of the firms.
Since their collapse in early 1997, these entities have become commonly known as piramida (pyramids) or firma piramidale; prior to 1997, however, they were widely referred to as fajde. Other common terms were kompani (companies), and fondacione (foundations).3 In this chapter, I flesh out the practices and moralities associated with these multiple terms as a way to explore the discourses of legitimacy that framed the rise and fall of the firms in Albania. More broadly, I am interested in understanding how speculative forms of finance become possible and legitimate through historically specific discourses of finance and how they draw on local financial practices and moralities.
I approach the discourse and language of finance and speculation not as a mere aftereffect of regulatory regimes and practices but as performative of such regimes (de Goede 2005; Hirschman 1977; Holmes 2013; Poovey 2008). In his account of the rise of capitalism in seventeenth- and eighteenth-century Europe, Albert Hirschman (1977) notes a shift from a language of āpassionsā to that of āinterests,ā which led to a shift in attitudes toward the economic profession and served to legitimize and professionalize economics as such. Later works by Marieke de Goede (2005) and Mary Poovey (2008) analyze representations of finance in eighteenth- and nineteenth-century Europe and North America. In different ways, both works underscore the widespread use of gendered discourses to draw a line between legitimate/illegitimate forms of finance. For instance, de Goede writes that the feminine metaphors of fortuna (fortune) and hysteria were often used as a means of delegitimizing certain financial activities (such as credit or gambling) whereas masculine discourses of interest, rationality, and accounting served to legitimize others (such as market speculation). With few exceptions, these contributions focus on Anglo-American, European, and global centers of finance, and on official and professional spaces of finance. Similar registers of legitimacy/illegitimacy proliferated alongside the rise and fall of the firms in Albania, a country situated at the margins of global financial flows. This marginal location is important because it makes possible different histories and ontologies of finance.
I approach the discourses around the firms in Albania as āthe very means through which the financial sphere was defined, shaped, and legitimizedā (de Goede 2005, 59). I also examine the broader social and political implications of the shifting representations of the firms from their boom through their bust. Looking at the cultural connotations of these shifting representations, I underscore specific notions of legitimacy/illegitimacy, morality/immorality, and rationality/irrationality of finance that encompassed but also extended beyond the firms. Rather than dismissing the firms as fictive entities using cons and money magic, I propose that specific financial and economic institutions, sociotechnical arrangements, and discourses helped legitimize these firms as capitalist enterprises and their leaders as trailblazing entrepreneurs. More specifically, I examine the use of gendered and ethnicized representations of the firms and of their owners as a way to legitimize or delegitimize them. Further, I note the continuities and discontinuities of economic practices and moralities of late communist and early postsocialist local financial repertoires that were appropriated by the firms. I show how these discourses of finance and local financial repertoires interacted with one another contributing to the popularity and longevity of the firms; I also show how, in the aftermath of the firmsā collapse, these discourses and repertoires of finance served to delegitimize the firms as isolated bubbles while absolving national and international bodies from any responsibility for their earlier proliferation and legitimacy.
The Ambivalent Moralities of Fajde
The term āfajdeā stands out as a ubiquitous reference for the firms in the newspapers published between 1992 and 1996. The term appears alongside an emerging postsocialist economic vocabulary, which includes primarily English and Latin cognates, such as democracia (democracy), tranzicioni (transition), and ekonomia e tregut (the market economy). Unlike these terms, as LaƧi reminds us in the epigraph, the term āfajdeā reemerged from an old, forgotten vocabulary. Fajde derives from the Turkish faide and Arabic fayde (use) (Ćabej 1996, 129); it refers to nonbank moneylending and was used widely during the late Ottoman rule and the short-lived monarchy of Ahmet Zogu. Although not unlawful, moneylending, especially when practiced by loan sharks, carried a negative connotation in Islamic ethics (as it had in Christian ethics as well).4 During the communist regime, private, nonbank forms of moneylending became illegal. The terminology around moneylending and moneylender/s (fajdexhi/nj), took on additional negative connotations that emerged from a communist ethic of finance. Following Marxist and Leninist philosophies, interest-bearing moneylending practices (whether bank or nonbank) were categorized as predatory forms of capital accumulation.
Anthropologists of communist states have discussed the negative ethical symbolism in popular discourses around money, commerce, and moneylending in other parts of the Eastern Bloc. In communist Romania, writes Katherine Verdery, āmoney from ācommerceā and from āspeculationā was polluting, unacceptable, tainted with capitalist tracesā (1996, 182). Caroline Humphrey describes similar attitudes toward money among Soviet citizens: āThe habit of seeing all āeconomicā activity as also intrinsically laden with political-ideological value is particularly marked and conscious among former Soviet people.ā¦ One aspect of this was the glorification of production/labor and the condemnation of commonplace trading for profit, called āspeculationā in Soviet parlanceā (2002, 44). Indeed, petty trade was often frowned upon and, in a number of cases, was performed by and associated with specific ethnic minorities (Humphrey 1999; Pine 2002; Watts 2002) or women (Heyat 2002). Official and unofficial attitudes toward trading for profit or moneylending were likewise considered āspeculativeā among the Albanian public and among economists. For instance, in a comprehensive historical overview of the economic transformations in early communist Albania, the authors often referred to private trading as āspeculationā (Fishta and Ziu 2004, 248ā49).
This economic ethic had serious political implications in communist Albania. In the early years of the postāWorld War II communist transformations, moneylenders were categorized as āenemies of the peopleā (armiq tĆ« popullit), along with landowners, religious leaders, and political dissidents. This was a grave accusation that often led to ...