What Money Wants: An Economy of Desire

Overview


One thing all mainstream economists agree upon is that money has nothing whatsoever to do with desire. This strange blindness of the profession to what is otherwise considered to be a basic feature of economic life serves as the starting point for this provocative new theory of money. Through the works of Karl Marx, Thorstein Veblen, and Max Weber, What Money Wants argues that money is first and foremost an object of desire. In contrast to the common notion that money is but an ordinary object that people ...
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What Money Wants: An Economy of Desire

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Overview


One thing all mainstream economists agree upon is that money has nothing whatsoever to do with desire. This strange blindness of the profession to what is otherwise considered to be a basic feature of economic life serves as the starting point for this provocative new theory of money. Through the works of Karl Marx, Thorstein Veblen, and Max Weber, What Money Wants argues that money is first and foremost an object of desire. In contrast to the common notion that money is but an ordinary object that people believe to be money, this book explores the theoretical consequences of the possibility that an ordinary object fulfills money's function insofar as it is desired as money. Rather than conceiving of the desire for money as pathological, Noam Yuran shows how it permeates economic reality, from finance to its spectacular double in our consumer economy of addictive shopping. Rich in colorful and accessible examples, from the work of Charles Dickens to Reality TV and commercials, this book convinces us that we must return to Marx and Veblen if we are to understand how brand names, broadcast television, and celebrity culture work. Analyzing both classical and contemporary economic theory, it reveals the philosophical dimensions of the controversy between orthodox and heterodox economics.
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Editorial Reviews

From the Publisher

"After a theoretical exposition founded chiefly on Marx in the first chapter, the book offers brilliant analyses ranging as far and wide as Dickens' Hard Times, classical and modern economics, communications theory and reality TV, advertising and brand theory, and finally original readings in Weber's The Protestant Ethic and the Spirit of Capitalism and Veblen's The Theory of the Leisure Class. Yuran's moves from the mundane and contemporary to high theory and historical myths, and across conceptual divides, are effective. An important strand of argument emerging from these explorations ties money with the consumer economy by showing that money's quality as endlessly exchangeable depends on every other commodity not being so. This structural argument, developed from Marx, offers deep insights about the commodity at the same time that it traverses the material/symbolic dichotomy informing histories of money, and shows a continuity between our own form of symbolic money and older ones based in material substances like gold."—Anat Rosenberg, Critical Inquiry

"This excursion into alternative economics is motivated by the belief that the recent financial crisis was caused by inadequacies in mainstream economic theory and that solutions are to be found in reinterpretations of the writings of Karl Marx, Vladimir Lenin, Georg Simmel, Thorstein Veblen, Werner Sombart, and Max Weber . . . Recommended."—E. L. Whalen, CHOICE

"Noam Yuran's brilliant book offers a new point of view about the relationship between money and the desire for it. Arguing that desire is built into the nature of money and is not an external attachment to it, Yuran opens up new readings of Marx, Veblen, and Weber, and also gives readers a new perspective on the ways in which money can inspire excess and destabilize economies. This book will be of great interest to economists, philosophers, and social theorists."—Arjun Appadurai, New York University

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Product Details

  • ISBN-13: 9780804785938
  • Publisher: Stanford University Press
  • Publication date: 3/26/2014
  • Pages: 320
  • Sales rank: 1,043,659
  • Product dimensions: 6.00 (w) x 8.90 (h) x 0.90 (d)

Meet the Author


Noam Yuran is a lecturer at the College of Academic Management Studies in Israel and a research fellow at the Minerva Humanities Center at Tel Aviv University.
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Read an Excerpt

WHAT MONEY WANTS

AN ECONOMY OF DESIRE


By NOAM YURAN

Stanford University Press

Copyright © 2014 Board of Trustees of the Leland Stanford Junior University
All rights reserved.
ISBN: 978-0-8047-8592-1



CHAPTER 1

ONTOLOGY

The Specter of Greed


PART I: BETWEEN ORTHODOX AND HETERODOX ECONOMICS

We start with an example from my teacher Haim Marantz. Occasionally we hear of an eccentric and rich person who has acquired an enormous collection of things. I have in mind the former first lady of the Philippines Imelda Marcos who was reported to own three thousand pairs of shoes in 1986 (the year her husband's regime collapsed). Such anecdotes usually serve to illustrate a quirkiness of the rich. "Who could wear three thousand pairs of shoes in a life time?" we might feel compelled to ask.

In contrast, without implying that anything is out of the ordinary, the media inundates us with a stream of information about people who acquire enormous amounts of money. It is considered a sign of craziness to collect shoes in excess of a certain number, whereas it is considered perfectly normal to amass an unlimited amount of money. Moreover, in these media stories, it goes without saying that a person with three thousand pairs of shoes is obsessed with this particular item. The mere possession of the collection attests to a somewhat pathological desire. However, in the same media space, rarely is it automatically assumed that a person in possession of millions or billions of dollars is obsessed with money.

What are we to make of this contrast? I do not think this difference in treatment is simply an indication of a bias in favor of the rich on the part of the mass media. Instead, I think that the distinction should be viewed seriously as an indication of an actual property of money. Drawing on Geoffrey Ingham's term, I propose to see this distinction as indicative of "the social ontology of money."

Perhaps the real point of the difference is that a person can have billions of dollars without actually being greedy. This does not necessarily mean that billionaires do not want money. It might mean that crazy and insatiable greed is encoded in the rules of the game. According to this view, the desire for money is not simply a psychological affect but, in a way, is embedded in the object itself. The fact that people can have billions of dollars without being greedy could simply be considered a minimal description of the way desire is ontologically related to money.

This idea, that greed is not just a desire for money, but embedded somehow in the object itself, is suggested by a comment of Karl Marx in the Grundrisse:

Greed as such [is] impossible without money; all other kinds of accumulation and of mania for accumulation appear as primitive, restricted by needs on the one hand and by the restricted nature of products on the other.


At first glance this may seem like a trivial observation: there is no greed without money, just as there is no desire for salted peanuts in a world that does not know of salted peanuts. But Marx is actually suggesting much more. What he suggests is that the form of the desire for money is inherently related to money as an object. A desire for things is limited by its object, whereas money is an object that allows infinite desire. For ordinary things, there is the possibility of satisfaction or even a limit beyond which the pleasure of use or possession turns into an annoyance, but money can be incessantly acquired; in other words, there is never too much money.

The radical aspect of this distinction between the wish for things and the desire for money is the inversion of the commonsensical relation between desire and the object. We can agree that peanuts are conceivable apart from the manner in which they are desired; however, what Marx suggests is that in the case of money, the desire for the object is intimately connected with the object itself. Taking this concept to its extreme, this idea may mean that in the case of money, it is not the object that arouses desire but instead that the object is constituted by desire. Money is the object that makes possible a certain form of desire. This could be read as a definition of money: money is the thing that can be infinitely desired. A well-known view suggests that money is an object believed to be money. Paraphrasing this concept, Marx's comment suggests that what constitutes a certain object as money is a certain form of desire attached to it, that money is an object desired as money.

A second reading brings to mind another possibility suggested by this formulation that in a way transcends the first one. There is a way in which things can be desired endlessly, that is, desired as if they are money; this is the case of luxury goods. In an example that I explore in more detail in the section called "Desire as Substance" in Chapter 3, the firm Patek Philippe sells luxury wristwatches at prices as high as two million dollars. According to Marx's distinction between the restricted desire for things and the limitless desire for money, an expensive watch is a thing desired as if it were money. (There is no real reason to stop at a few million dollars. If necessary, the market could produce a watch that would cost dozens of millions.)

Later I develop this insight more systematically and argue that we can view things as embodiments of the desire for money. At this point, we already can find within the object itself the distinction that Marx makes between the desire for things and the desire for money. What justifies the outrageous price of such a wristwatch? Diamonds are not an elegant solution for the watchmaker company because they bear no special relation to watches. One can put diamonds on any object.

In the case of the Patek Philippe watch, the price is justified, to a large extent, by special mechanisms such as those that ensure a high degree of accuracy. Of course, the point is that such a precise measure of accuracy—an error of less than one second over a period of twenty-four hours—is something that the watch owner cannot experience concretely. This level of accuracy stretches the logic of luxury to an extreme; this luxuriousness is in contrast to the thingness of things, to the possessor's immediate experience. In a sense, we see here Marx's distinction between things and money enfolded into the thing itself: a thing may be desired as money insofar as its thingness is somehow cancelled.

This shadow of money in the realm of things provides a key to a remarkable blindness in contemporary economic thought. In our feverishly economic era that is haunted by images of wealth, economics consistently fails to account for a notion of the desire for money. Money, it insists, is but a means and, as such, cannot be desired for itself. Indeed, a notion of desire for money upsets the categorical distinction of economics between money and things. This notion permeates the domain of commodities and presents certain things or certain qualities of things as effects of money. It is for this reason that the notion of a desire for money can serve as an Archimedean point for a multidimensional shift in our conception of the economy. The theoretical implications run much deeper than the nature of money. They also affect our concept of commodities, private property, economic action, the historicity of the economy, and more.

This chapter explores the reasons for this oversight and many of its implications. It shows how the basic tenets of the economic worldview exclude the possibility of conceiving of money as an object of desire. Indeed, the exclusion of this possibility is fundamental to what can be termed the economic worldview because it bypasses the debates between right and left within the circle of orthodox economics. Monetarists and Keynesians do not disagree about the commonsense assumption that for the individual agent, money is basically a means. To arrive at an alternative economic ontology based on the thinking of Marx and Veblen, we must first explore the current blindness of economics to the concept of the desire for money.


Why Economics Fails to Account for Greed

The idea to base money on desire is radically foreign to orthodox economics. However, it is not the crossing of the difference between subject and object that is problematic for economics. When economists must account for money's value philosophically, they can ground it in a subjective relation. The question is what type of relation they choose. Thus, for example, Milton Friedman bases the value of paper money on thought or belief:

Private persons accept these pieces of paper because they are confident that others will. The pieces of green paper have value because everybody thinks they have value. Everybody thinks they have value because in everybody's experience they have had value.


What must be acknowledged is that basing the value of money on a belief bypasses, from the very beginning, the possibility of the desire for money. This theoretical basis presupposes that the idea that people want money is something that requires an explanation in contrast to the idea that people want goods, which is considered a fact and self evident. For this reason, the idea of grounding money in thought refers to the basics of the economic worldview, that is, to what economics purports to study and, what is more important, to that of which it refuses to have any knowledge. The obviousness of the desire for goods does not mean that economics knows everything there is to know about this desire but, on the contrary, that economics purposefully refuses to have any type of positive knowledge about this desire.

In her anthropological study of consumption, Mary Douglas points out this peculiarity, claiming that economics cannot answer what appears as the most basic question, namely, "Why do people want goods?" This peculiarity is not at all coincidental. It is in fact implied by the concept of utility, which governs the view of human action held by economics. To sustain a concept of utility, economics must assume that the utility of qualitatively different things can be quantitatively compared, that is to say, one can compare the utility of a certain medicine with that of, for example, a car. But this means that, in theory, utility must ignore any positive knowledge of the enjoyment or use of things. This means that the knowledge of utility itself—like the knowledge a physician has of a medicine or an engineer has of a car—cannot, in principle, be economic knowledge. This is a basic but paradoxical characteristic of contemporary economic thought: utility plays a central role in its philosophy, yet economics can sustain the concept of utility only insofar as it knows nothing positive about it.

Economics does not see this paradox as a weakness but simply as a formulation of the discipline's assumption that economics is a science of means. Returning to Friedman's grounding of money in thought, we can formulate the underlying logic in terms of utility. When Friedman explains the value of money by the goods it can buy, he actually explains what he does not know (why people want money) by what he cannot, in principle, know (why people want goods).

Paradoxical as it may seem, there is actually something convenient in this theoretical position, which opens a black hole within the theory and in which one can ground any imaginable human behavior. This may be one of the reasons for the unequivocal dominance of the concept of utility over the economic view of human action. It is its discord with the concept of utility that explains why economics cannot account for the notion of a desire for money. This point cannot be overemphasized. The specter of greed and other obsessions with money haunt our popular imaginings of the economy, yet economic theory cannot even begin to conceptualize this desire.

Following the 2008 financial meltdown, Wall Street itself became synonymous with greed. Titles such as And Then the Roof Caved In: How Wall Street's Greed and Stupidity Brought Capitalism to Its Knees identified greed as the cause of the crisis. A symptomatic point is the way an official economic view engaged the subject. In the public atmosphere that surrounded the crisis, even the report of the governmental inquiry commission could not ignore the question of greed. The majority report mentions the term at a strategic point. Immediately following the list of summary conclusions, the report suggests that the conclusions should be viewed "in the context of human nature and individual and societal responsibility" and then states that "to pin this crisis on mortal flaws like greed and hubris would be simplistic. It was the failure to account for human weakness that is relevant to this crisis." However, throughout the four hundred pages of the rest of the majority report, the term is not mentioned again, which makes one wonder whether the commission is reiterating what it warns us about, namely, the failure to account for greed.

This failure is not accidental but actually implied by the terminology of the report, that is, by the categorizing of greed as "a human weakness." What this reflects is an inability of economic discourse to envision greed as an economic phenomenon—to conceive of greed not as an aberration but as embedded in the normal course of action and in economic institutions, practices, and habits of thought. The dismissal of this possibility should not come as a surprise because the idea of economic action oriented toward money, so central to the lay view of the economy, is rejected completely throughout the political spectrum of orthodox economics. To see how this rejection traverses what is considered to be the main lines of polemics within orthodox economics, I mention just two examples from the opposite extremes of this spectrum: Friedrich von Hayek, the spiritual father of neo-liberalism to the right, and John Maynard Keynes, a pillar of the idea of the welfare state, to the left.

In his most explicitly ideological book The Road to Serfdom, Hayek conflates political freedom with economic freedom. For that purpose he rejects the tendency to undermine economic issues as merely economic. This approach, he writes,

is largely a consequence of the erroneous belief that there are purely economic ends distinguished from the other ends of life. Yet apart from the pathological case of the miser, there is no such thing. The ultimate ends of the activities of reasonable beings are never economic. Strictly speaking there is no "economic motive" but only economic factors conditioning our striving for other ends.


Hayek dismisses activity directed at money as an economically pathological behavior. Behind this dismissal one can see how ideology permeates theory in economics. Here the rejection of the possibility of economic ends is related not only to the concept of utility, but also to the moral affirmation of the market.

This becomes evident if we consider how Hayek affirms the economic sphere as a tool for managing causes. "So long as we can freely dispose over our income and all our possessions," he writes, "economic loss will always deprive us only of what we regard as the least important of the desires we are able to satisfy." What Hayek invokes here is nothing but the basic principle of diminishing marginal utility. But what should be noted is how easily this allegedly technical tool of economic analysis is transformed into an ethical claim.

The concept of marginalism—which brought on the birth of neo-classical economics at the end of the nineteenth century and that dominates microeconomic theory to this day—posits that prices are set by what happens at the margin, not by an internal quality of goods, but by their marginal utility, that is, by the utility of the last unit purchased. To express this concept in concrete terms, one could say that the utility one obtains from an additional T-shirt is diminished by the number of T-shirts one already has. For this reason there is a point at which one will stop spending money on T-shirts and start purchasing something else instead, for example, bread.

The whole drama of price setting is located at this marginal point, in the interplay between diminishing marginal utility and rising marginal cost. Undoubtedly, the economic point of view owes much of its imperialist power to its ability to construct a magnificent theoretical edifice upon such a simple intuition regarding human activity. Hayek's formulation reveals how an entire ethic is ingrained in this allegedly technical tool of economic analysis. Because any cause, noble as it might be, can be subjected to this mechanism, the market is the ethically responsible way to commit to causes. As noble as our values might be, it is only this market mechanism that forces us to prioritize them and to determine what we are willing to sacrifice for them.

In this theoretical context, far from being a despicable haggle, pricing a value is the only ethically responsible way to commit to it. Thus, if we believe, for example, in the promotion of world peace, the protection of wildlife, and the elevation of modern human spirituality, it is only a market mechanism that forces us to show a real commitment to any of them. But note that if, in addition to these causes, we also want money, then the whole edifice is jeopardized: the authenticity of noble causes is endangered once they are suspected of masking a will to profit or of being motivated by considerations of profit.


(Continues...)

Excerpted from WHAT MONEY WANTS by NOAM YURAN. Copyright © 2014 Board of Trustees of the Leland Stanford Junior University. Excerpted by permission of Stanford University Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Contents

Acknowledgments, vii,
Preface by Keith Hart, ix,
Introduction, 1,
1 Ontology: The Specter of Greed, 13,
2 History: Fantasies of a Capitalist, 79,
3 Mystery: The Materiality of Symbols, 125,
4 Revelation: Weber's Midas, 181,
5 The Economic Sublime: The Fantastic Colors of Money, 223,
Notes, 269,
Bibliography, 283,
Index, 291,

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