The Philosophy of Money

Georg Simmel, David Frisby, Tom Bottomore

• Publisher: Routledge
• Year: 2011
• ISBN:
  9781136807312
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

With a new foreword by Charles Lemert

'Its greatness...lies in ceaseless and varied use of the money form to unearth and conceptually reveal incommensurabilities of all kinds, in social reality fully as much as in thought itself.' - Fredric Jameson

In The Philosophy of Money, Georg Simmel puts money on the couch. He provides us with a classic analysis of the social, psychological and philosophical aspects of the money economy, full of brilliant insights into the forms that social relationships take. He analyzes the relationships of money to exchange, human personality, the position of women, and individual freedom. Simmel also offers us prophetic insights into the consequences of the modern money economy and the division of labour, in particular the processes of alienation and reification in work and urban life.

An immense and profound piece of work it demands to be read today and for years to come as a stunning account of the meaning, use and culture of money.

Georg Simmel (1858-1918) was born in Berlin, the youngest of seven children. He studied philosophy and history at the University of Berlin and was one of the first generation of great German sociologists that included Max Weber.

Synthetic Part

4

INDIVIDUAL FREEDOM

I

Freedom exists in conjunction with duties

The development of each human fate can be represented as an uninterrupted alternation between bondage and release, obligation and freedom. This initial appraisal, however, presents us with a distinction whose abruptness is tempered by closer investigation. For what we regard as freedom is often in fact only a change of obligations; as a new obligation replaces one that we have borne hitherto, we sense above all that the old burden has been removed. Because we are free from it, we seem at first to be completely free – until the new duty, which initially we bear, as it were, with hitherto untaxed and therefore particularly strong sets of muscles, makes its weight felt as these muscles, too, gradually tire. The process of liberation now starts again with this new duty, just as it had ended at this very point. This pattern is not repeated in a quantitatively uniform manner in all forms of bondage. Rather, there are some with which the note of freedom is associated longer, more intensively and more consciously than with others. Some accomplishments that are no less rigidly required of some than of others and that are generally no less demanding on the powers of the personality none the less seem to allow the personality a particularly large amount of freedom. The difference in obligations which leads to this difference in the freedom compatible with obligations is of the following type. Each obligation that does not exist with regard to a mere idea corresponds to the right of someone else to make demands. For this reason, moral philosophy always identifies ethical freedom with those obligations imposed by an ideal or social imperative or by one’s own ego. The other person’s demands can consist of the personal actions and deeds of the person under obligation. Or they can be realized at least in the immediate outcome of personal labour. Or, finally, it need only be a certain object, the use of which someone can rightly lay claim to, although he has no influence whatsoever concerning the manner in which the person under obligation procures this object for him. This scale is also that of the degrees of freedom that exist with the performance of a duty.

The graduations of this freedom depend on whether the duties are directly personal or apply only to the products of labour

Naturally, every obligation is generally resolved through the personal actions of the human subject, but it makes a great deal of difference as to whether the rights of the person entitled to some service extend directly to the person under obligation himself or simply to the product of the latter’s labour or, finally, to the product in itself – regardless of whether the person under obligation acquired the product through his own labour or not. Even if the advantages of the entitled person remained objectively the same, the first of these forms of obligation would completely bind the obligated person, the second would permit him a little more latitude and the third considerable latitude. The most extreme example of the first type is slavery; in this case, the obligation does not involve a service that is in some way objectively defined, but instead refers to the person himself who performs the service. It includes the employment of all the available energy of the human subject. If, under modern conditions, duties that involve the whole capacity to work as such but not the objectively defined result of this capacity – as with certain categories of workers, civil servants and domestic servants – do not offend against freedom in too crass a manner, then this is a result either of the temporal restriction in the periods of service or of the possibility of selecting the people whom one wishes to be obligated to, or a result of the magnitude of what is offered in return, which makes the obligated person feel, at the same time, that he too has rights. The bondsmen are about at this level, as long as they belong completely, and with their entire working capacity, to their lord’s domain, or rather, as long as their services are ‘unmeasured’. The transition to the second level occurs when the services are temporally limited (but this does not imply that this level was always later historically; on the contrary, the deterioration in peasants’ freedom very often leads from the second to the first level of obligation). This second level is definitely reached when, instead of a fixed amount of labour time and energy, a specific product of labour is required. At this level, one can observe a certain gradation, namely, that the manorial serf had to hand over either an aliquot part of the yield from the soil – for example, every tenth sheaf of corn – or a permanently fixed amount of corn, cattle, honey, etc. Although the latter arrangement might possibly be the more severe and more difficult, it none the less creates great individual freedom for the obligated person, for it makes the lord of the manor more indifferent towards the peasant’s type of husbandry. If the serf only produces what is sufficient for his payment to the lord of the manor, then the latter has no interest in the total yield. But this is most important in the case of the aliquot payment, where supervision, coercive measures and oppression are the consequences. The fixing of payments with regard to an absolute rather than to a relative quantity is in itself a transitional phenomenon which suggests that it will be replaced by money. In principle, at this level as a whole, the complete freedom and release of the personality as such from the relationship of obligation could, in fact, be realized, for the person entitled to some service is concerned only with receiving a given objective payment, regardless of where the obligated person procures it. But in view of the economic organization it can actually only be procured by the latter through his own labour, and it is upon this basis that the relationship is constructed. The employment of the person was clearly determined by a person’s obligations. This is typically the case wherever in a barter economy the performance of a service commits someone to perform one in return. Service and personality, however, soon diverge to such an extent that the person under obligation would, in principle, be entitled to withdraw his personality completely from the service and perform it in a purely objective manner by producing it, for instance, through the labour of another person. But in reality this is virtually ruled out by the economic system and by means of the product which must be given in payment. In this product the human subject himself remains under obligation and his personal energy is still confined in a certain direction. To what extent the principle of objectivity none the less represents a development towards freedom when compared with the principle of personality is shown, for example, by the greatly increased capacity of estate officials to hold a fief during the thirteenth century. For, as a result, their previous personal dependency was transformed into a merely objectified [dingliche] one and thereby placed under common law; that is, they were given freedom in all matters except those connected with feudal service. One finds a similar phenomenon today when talented people, who are forced to work for a wage, prefer to work for a company with its strictly objective organization rather than for an individual employer; or when a shortage of domestic servants occurs because girls prefer factory work to service with people of authority, where they are certainly in a better position materially but feel themselves less free in their subordination to individual personalities.

Money payment as the form most congruent with personal freedom

The third level, where the person is actually excluded from the product and the demands no longer extend to him, is reached with the replacement of payment in kind by money payment. For this reason, it has been regarded, to some extent, as a magna charta of personal freedom in the domain of civil law. Classical Roman law declared that, if a payment in kind were refused, then any demand for payment could be met with money. This is, therefore, the right to buy oneself out of a personal obligation by means of money. The lord of the manor who can demand a quantity of beer or poultry or honey from a serf thereby determines the activity of the latter in a certain direction. But the moment he imposes merely a money levy the peasant is free, in so far as he can decide whether to keep bees or cattle or anything else. Formally, in the sphere of personal labour services, the same process takes place with the right of appointing another person as a substitute, and the other party has to accept the latter unless his competence is in doubt. This right, which sets the whole conception of the relationship on a new basis, must often be fought for since it is felt that, like the right to make payment in money, it is a step on the way towards a dissolution of the entire obligation. The authors of the Domesday Survey characteristically selected terms for the peasants who replaced their socages by regular money payments which were intended to show that they were neither totally free nor totally subordinate. For a long time, however, the names of the money levies continued to reveal their origin in payments in kind: kitchen tax, barrel money, lodging money (instead of the provision of accommodation for the lords of the manor and their officials as they travelled around), honey tax, etc., were all levied. It is often the case, in a transitional phase, that the original payment in kind was estimated in money and that this sum was demanded as a substitute. This transitional phenomenon also occurs in relationships that are far removed from the example dealt with here. In 1877 in Japan all levies and taxes were still either paid in rice or calculated in rice and paid in money. Similarly, under Elizabeth I, the rent for certain estates belonging to the universities was fixed in terms of corn although payment was apparently made in silver. At least the identity of the value of the obligation is still emphasized in this manner, but any personal bondage resulting from rigidly fixed contents has already been thrown off. If the ius primae noctis had really existed anywhere, then its development would have followed analogous steps; every one of the feudal lord’s rights extended to the whole of the obligated person who had to forfeit his most fundamental possessions or rather his being. This would have been the price at which the lord would have granted his female subjects the right to marry. The next stage is that he grants this right – which he can deny at any time – in exchange for a sum of money; the third stage is that the lord’s veto as such is abolished and the subject is now free to marry if he or she pays the lord of the manor a fixed sum: bride-wealth, marriage money, bridal money, etc. Personal liberation is certainly linked with money, though not exclusively at the second stage, since the approval of the lord of the manor still had to be won and could not be attained by force. The relationship is completely depersonalized only when no factors other than money payment are involved in the decision. Before the abolition of every right of this nature that the lord of the manor possesses, personal freedom cannot rise any higher than when the obligation of the subject is transformed into a money payment which the lord of the manor has to accept. Consequently, the reduction and eventually the complete replacement of peasants’ services and payments frequently took place through their transformation into sums of money. This connection between a payment of money and liberation can perhaps be regarded by the person entitled to some service as being so effective that he himself suppresses the liveliest interest in cash payments. The transformation of peasant socages and payments in kind into money levies took place in Germany from the twelfth century onwards and the process was interrupted simply because in the fourteenth and fifteenth centuries the feudal lords also fell prey to capitalism. For they realized that payments in kind were far more elastic and susceptible to arbitrary extension than were money payments, which – once they had been quantitatively and numerically fixed – could not be altered. This advantage of payments in kind seemed, in their eyes, great enough to make them seize it in their greed at the moment when otherwise money interests were predominant. It is precisely for this reason that people were completely unwilling to allow the peasant to become rich. The English copy-holder was not generally allowed to sell any cattle without the special permission of his lord. For by selling cattle he obtained money with which he could acquire land elsewhere and extricate himself from his obligations to his previous lord. The greatest step forward in the process of liberation is achieved through a development within money payment itself when a single capital payment replaces the periodical levy. Even if the objective value is identical in both forms of payment, the effect upon the human subject is quite different. As we have pointed out, the various payments levied certainly give the obligated person complete freedom in terms of his actions, provided that he obtains the money required. But the regularity of the payments forces such action into a fixed scheme, imposed by an alien power, and so it is only with the capitalization of the payments that the form of all kinds of obligations is attained which corresponds to the greatest personal freedom.

Thus, it is only with the capital payment that the obligation is entirely converted into a money payment, whereas the money levy with its regular recurrence still preserves at least a formal element of bondage over and above the value required in payments. This distinction is manifested in the following manner. In the thirteenth century and later the English Parliament often decided that the counties had to provide a certain number of soldiers or workers for the king. The representatives of the counties, however, regularly replaced the provision of men with a money payment. But no matter how much personal freedom was saved in this manner, there is a fundamental distinction between this and the rights and freedoms that the English people purchased from their monarchs through single votes on money. If the person receiving the capital is then freed from all the insecurities to which he is subjected in the case of individual levies, then the corresponding equivalent on the side of the obligated person is that his freedom is converted from the unstable form that it possesses when recurrent payments have to be made into a stable form. The freedom of the English people with regard to their monarchs depends partially upon the fact that, by means of capital payments, the people had settled matters with their king once and for all with respect to certain rights: a document from Henry III states, for example, ‘pro hac concessione dederunt nobis quintam decimam partem omnium movilium suorum’. It is not in spite of but precisely because of the fact that such an agreement concerning the freedoms of the people reveals a somewhat brutal, external and mechanical character that it implies the most complete antagonism contrary to the feelings of the king that ‘no piece of paper should come between him and his people’. Yet precisely for this reason it also constitutes a radical abolition of all the imponderables of more emotional relations which, when freedoms are attained in a form less tied to money transactions, often provide the means for revoking them or making them illusory. A good example of the gradual development in which the substitution of money payment for payment in kind secures the liberation of the individual is revealed in the obligation upon subjects, citizens and copy-holders to accommodate and feed their monarchs, civil servants, patrons and manorial lords in the course of their travels. This burden stemmed from the old service to the monarch and achieved great significance in the Middle Ages. The first step towards an objectification and depersonalization of this obligation occurs when it is strictly defined. Consequently, we can find, even at an early date, an exact specification of how many knights and servants have to be accommodated, how many horses and dogs can accompany them and how much bread, wine, fish, dishes, tablecloths, etc., must be provided. Nevertheless, the moment that accommodation and feeding were actually required, on the one hand the limits to the services provided must easily have become vague and, on the other, such services definitely reflected the character of a personal relationship. In contrast, we are dealing with a more developed stage when we find that mere deliveries of payments in kind took place without any accommodation. In such cases, the measurement of the quantity could be much more precise than if people had to be accommodated and their appetites satisfied. We learn, for instance, that Count von Rieseck was to receive a certain payment of corn: ‘From this corn bread must be baked for his retinue when he is in the village of Krotzenburg so that he will not molest or harm the poor people in the village any further.’ Another consequence of this development is that fixed money payments are stipulated for the occasions when people of high rank appear on their travels or at court sessions. Eventually even the variable and personal element that is still present here is removed when these services are commuted into permanent levies which are imposed in the form of subsistence money, masters’ daily allowance, mercenary money, even when the former official journeys of the judges, etc., were replaced by completely different organizations. It was in this way that services of this kind were ultimately completely abolished and were absorbed into the general tax contribution of the lower orders. This development was, as it were, one that lacked any specific form and is, therefore, the correlate of personal freedom of modern times.

In such cases of the replacement of natural services by money payments the advantage is usually mutual. This is a most remarkable fact which calls for an analysis within a wider context. If one starts out from the assumption that the quantity of goods available for consumption is limited; that this quantity does not satisfy the given demands; that, finally, ‘the world has been given away’, that is, that in general every good has its owner, then it follows that whatever is given to one person must be taken away from another. Even if one disregards all cases where this obviously does not hold, there still remain countless others where the satisfaction of one person’s needs is at the expense of that of another. If one were to consider this as the, or as one, characteristic or basis of our economic life, then it would accord with all those world views that hold as immutable the total amount of values given to mankind – such as ethics, happiness, knowledge – so that only the forms and agents of these values can change. Schopenhauer is inclined to assume that the amount of suffering and joy that each individual experiences is predetermined by his essential nature, that this amount can neither be exceeded nor remain void, and that all extraneous circumstances to which we are accustomed to ascribe our situation only represent a difference in the form in which we experience that unchangeable amount of happiness and sorrow. If one extends this individualistic conception to mankind as a whole, then it appears as if all our striving for happiness, all evolution of material conditions, all the struggle for possessions and being is a mere shifting back and forth of values whose total amount cannot be changed in this way. As a result, all changes in distribution merely reflect the basic phenomenon that one person now owns what the other, voluntarily or not, has given away. This conservation of values obviously corresponds to a pessimistic–quietistic view of life; for the less we consider ourselves able to produce really new values, the more important it is that none are really lost. The widespread notion in India that, if a holy ascetic yields to temptation his merits are transferred to the tempter, teaches this with paradoxical consistency.

But exactly opposite phenomena must also be considered. In all those emotional relationships where happiness lies not only in what one receives but just as much in what one gives, where each is mutually and equally enriched by the others, there develops a value the enjoyment of which is not bought by any deprivation on the part of an opposite party. Similarly, the communication of intellectual matters does not mean that something has to be taken from one person so that another can enjoy it. At least, only an almost pathological sensibility can bring about a feeling of deprivation if an objective intellectual idea is no longer an exclusive personal property but is also shared by others. Generally speaking, one may assert that intellectual property – at least to the extent that it does not extend into economic property – is not gained at the expense of others, since it is not taken from a limited supply but, even though its content is given, ultimately has to be produced by the thought process of whoever acquires it. This harmonization of interests, which emanates from the nature of the object, should obviously also be provided in those economic spheres where competition for the satisfaction of individual needs is gained only at the expense of someone else. There are two types of means for transferring this situation into a more perfect one. The nearest at hand is the diversion of the struggle against fellow men towards the struggle against nature. To the extent to which further substances and forces are incorporated into human uses from the available supply of nature, competition for those that are already obtained will be reduced. The thesis of the preservation of material and energy is, luckily, valid only for the absolute total of nature, but not for that section of it which human purposive action designates. This relative total can, indeed, be multiplied indefinitely by bringing more material and forces into a form that accords with our purposes, that is by annexing them. A progressive technology teaches us to gain even more uses for things, even from what is already completely occupied. The transition from an extensive to an intensive economy is applicable not only to the cultivation of the land, but to any substance that can be subdivided into smaller and smaller parts for more and more specific usages or to the substance’s latent forces that are to be released to an even greater extent. The extension of human spheres of power in a variety of dimensions, which belies both the statement that the world is given away free and that the satisfaction of needs is tied to theft of whatever sort, could be termed the substantive progress of culture. Alongside this, there is what might be termed functional progress. The concern here is with finding the appropriate forms that make it advantageous for both parties to exchange ownership of specific objects. Such a form can originally have been attained only if the first owner had the physical power to keep the object wanted by others until he was offered a corresponding advantage, because otherwise the object would simply have been taken away from him. Robbery, and perhaps the gift, appear to be the most primitive stages of change in ownership, the advantage lying completely on one side and the burden falling completely on the other. When the stage of exchange appears as the form of change in ownership, or as stated earlier as a mere consequence of the equal power of both parties, then this would be evidence of the greatest progress that mankind could have made. In view of the mere differences of degree that exist in so many respects between man and the lower animals, many have often attempted to establish the specific difference that separates mankind unmistakably and unequivocally from other animals. Thus, man has been defined as the political animal, the tool-creating animal, the purposeful animal, the hierarchical animal – indeed, by a serious philosopher, as the megalomaniac animal. Perhaps we might add to this series that man is the exchanging animal, and this is in fact only one side or form of the whole general feature which seems to reflect the specific qualities of man – man is the objective animal. Nowhere in the animal world do we find indications of what we term...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Table of Contents
• Acknowledgements
• Foreword to the Routledge Classics Edition
• Preface to the Third Edition
• Introduction to the Translation
• The Philosophy of Money
• Preface
• Analytical Part
• Synthetic Part
• Afterword: The Constitution of the Text
• Name Index