Bill Maurer on cashlessness and the importance of information in money (Seminar in Cambridge, 01/02/2013)

Dear all,

I was fascinated by a talk that Bill Maurer gave about his latest research with regulators and practitioners in the payment industry. First of all, his 'opening up' of the black box of (electronic) payment is worth mentioning. Payment is not merely the 'reading of the debit/credit card', but several 'stops' (such as the payment device, the 'switch' deciding whether it is debit or credit etc) accompany the transfer along the 'rail'. All of those stakeholders have their own agendas and take a 'fee' for transferring the 'information'. It is secondly the notion of information that Maurer seems to focus on. His very positively formulated argument run approximately like this: digital money is actually not 'better or worse' than cash. It is different in the way that it is not material but rather 'information proper'. It is this information invested in the transfer (all the details about what you bought, where and when, with what means of payment you achieved the purchase etc) that is now valuable. 

This reminded me very much about Keith's argument in the last chapter's of 'Money in an unequal world'. Both of them seem to drive forward the argument that money is actually not mainly alienating, disconnecting or stressful - rather its new forms are newly personalized, and actually allow for 'personalization' as a means against alienation and disconnection in the economy.

What I now wondered about: is this reading not very much mirroring the 'ivory-tower'-view? In what way are we as consumer able to 'personalize' money so that it is of any good for us? What can this 'good' be? I struggle very much with putting a meaning behind the idea of 'depersonalizing' money (except in such forms as alternative currencies or localized currencies that obviously both Keith and Bill talk about as well - though in different contexts). Isn't the role of information not also to be found in a commercial sense? Companies are actually already selling the consumer data; Tesco is using it in order to better plan the shop floor or the ordering process. Amazon is implicitly already using the information it collects in the payment process. What about those other companies along the rail track? All of them control certain parts of the information chain which they might be able to (ab)use. 

I would be very much interested in your ideas about this.

Best,

Johannes

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Tags: Money, cash, digital, information, money

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Comment by John McCreery on February 19, 2013 at 3:09am

Johannes, I wonder if we should be talking about "personalizing money" at all. Wouldn't be more accurate to talk about personalizing transactions? The money is part of the transaction, but the data collected go beyond how much was paid to facilitate market research and, as the mantra has it, "getting to know the customer better." 

Also, I can't agree with your statement,

b) The population / the companies / the organizations who are using the money form to originally enable easy exchange can themselves not control the collection of the information. 

It is, in fact, who controls the information that is at stake in the competition here. 

I was, serendipitously, present at an earlier moment when this fact became clear to me. I was part of a team working on the launch of Caffeine Free Diet Coke in Japan. One thing I learned during that project was how radically the development of POS data systems had altered the positions of manufacturers (in this case Coca-Cola and its bottlers) via retailers (in this case convenience stores). Under the old regime, the agency would use market research data from surveys and focus groups conducted months or years before the launch of a new product to develop strategies that relied heavily on mass media advertising. Under the new post-POS regime, retailers knew on a day-by-day basis what was selling and what was not, who was buying and who was not. They would laugh at proposals based on data seen as already hopelessly out of date. One major result was a shift away from mass-media advertising (though some continued to be done) to in-store promotion and "incentives" (in effect, bribes) to secure shelf space, which had become a key bottleneck where demand outstripped supply. This was bad news for the advertising industry for whom mass-media advertising was the major revenue stream. It was also bad news for manufacturers, who in new product-saturated markets, could no longer announce the latest "breakthrough" and expect to sell a lot of product. 

What I see today, based on this experience, is a new step in this process. The big winners to date are big-box stores like Walmart and online retailers like Amazon. Both aim to be the one-stop shop for everything. Their problem is that driving down prices may attract more customers but also, necessarily, reduces the margins on what they sell. That is why they are turning increasingly to big data and the limiting case of niche marketing, one-on-one, targeted directly to individual customers. That is why "building relationships" has become another mantra. A relationship is what makes a consumer willing to pay a bit more than a strict supply-demand model would imply. 

In some respects, what we are seeing in these kinds of businesses is a return to the small neighborhood shopkeeper who knew all of her customers intimately and knew just what they would need or like—but the scale has increased by orders of magnitude rendering the process only pseudo-personal. That, anyway, is my take on what is going on.

P.S. In another thread I pointed people to a recent piece by Valdis Krebs, one of the smartest network-analysis-for-business people I know. Please check it out, and let me know what you think.

Comment by Johannes Lenhard on February 18, 2013 at 5:20pm

Now to get back to Keith - you say: The idea is slowly taking root that society is less an oppressive structure out there and more a subjective capacity that allows each of us to learn how to manage our relations with others. Money symbolizes this shift. It once took the form of objects outside ourselves of which we had a greater need than the available supply; but now it is increasingly manifested as digitized transfers mediated by plastic cards and communications satellites, thereby altering the notions of economic agency that we bring to participation in markets. Cheap information is undermining the assumptions that supported mass production and consumption for a century.

I wonder whether this shift you describe is actually linked to money as such or the increasing disappearance of the 'currency' form of money. The object 'coin' is increasingly exchanged for 'plastic money' - does that change our own relation to 'money' however? Don't we simply forget the existence of money as such using plastic money all the time - at least we forget about the actual value of money as Ritzer argues. In a certain way, I am inclined to say that I am still reluctant to describe money as a 'positive' agent of change (or even the embodiment of this change). I have the feeling that we are even further away from money now then we were before plastic cards and now electronic money. Isn't the housing crisis and the personal debt crisis that lead to the bursting of the bubble in 2008 not also support his observation? People do not have any idea about what money is anymore - it became even more abstract now that information technology has taken over.

I really like the idea that money is a particular form describing in the first instance our economic interaction with society and in the second even more than that (we pay for flowers that are then give away on Valentine's day - one might even anticipate this personal relation from the bank statement). If it is this idea of 'tracing relations' that you mean (or I could mean following Bill Maurer) with 'personalizing money', this is indeed positive. Nevertheless, I have serious problems seeing this a) in the rail track from the point of sale to the bank b) tracing happening in one form or the other now in personal lives. It could however be very interesting as an ethnographic project: what can you see looking at people's bank statements? Here Jose's project seems to fit in neatly. I will have a look at this shortly and get back to you!

Comment by Johannes Lenhard on February 18, 2013 at 4:59pm

John, to get back to your point first, I think you are completely right. It is not 'one single stream' (I was not assuming that - I guess just expressed myself to nonchalantly). There are multiple players (often competitors) controlling the different streams and positions in the rail track. I can also only nod when you talk about the uselessness of the concept of 'big brother' in that context - there is not single governmental institution that is controlling us anymore (even the state outsources security very often nowadays etc). To get back to the payment systems and money however my surprise was much more about the 'positiveness' that this is described with. I would not want to dismiss the (potentially underlying) idea of a 'democracy of information' very much resembling liberal notions of markets. What I would even more not want to dismiss is the danger that the dispersal of information (highly valuable information that is often collected without us being conscious about it) implies. The new revolution in the contemporary forms of money (particularly in digitalized) forms might indeed lead to a new personalization. This personalization I would argue does not in many cases take place on a conscious plane, however. Money is loaded with more and more information on its way - but I see two problems here:

a) It is every individual 'player' (the super market, the credit card company, the bank etc) for ITSELF that collects the information. Only the abstract money form knows all about its own life so to speak. There is - as John rightly points out - no one single entity that controls this information. 

b) The population / the companies / the organizations who are using the money form to originally enable easy exchange can themselves not control the collection of the information. 

Who then personalizes money I would ask.

Comment by Jose Ossandon on February 5, 2013 at 1:09pm

Dear Johannes, You might find this short report of our research with department store cards in Chile useful:

I think, it is an attempt to do what Keith was suggesting in his answer, we reconstruct the transactional data stored in the cards with information from interviews and other records (such as monthly bills), but also tried to deal with the particular type of information management used by retailers (from interviews with risk managers in another project). But, then we found something else, a whole parasitic circuit of card lending. Of course, as this is pretty much a work in progress, comments are very welcome, josé.
Comment by John McCreery on February 5, 2013 at 1:38am

Johannes, why are you, or the scholars you cite, assuming that there is only one rail track, one chain of information? The reality is that lots of companies, nation states, and other organizations are collecting unprecedented amounts of personal information—but they don't in many cases share it with each other. Google, for example, doesn't share what it knows about its users with Yahoo! or Amazon. The result is a constantly growing and increasingly tangled hairball of information circuits, with control scattered all over the place. Indeed, much of business and political competition these days turns on the scale and quality of the information controlled by the various players and how well they use it. That is what drives the excitement about "big data" these days. Everyone in the game is afraid that someone else knows more than they do. The dream of knowing and controlling the whole thing is, however, the Red Queen in Through the Looking Glass. Everyone is constantly running just to keep in place. And they aren't just running; they are stumbling over the black swans that proliferate as the growth of complexity in the net accelerates. 

What does this mean for anthropology? All those classic Frankfort School and other critical theories that assume an information landscape controlled and homogenized by a single Big Brother, the landscapes on which artifacts like the nation-states described by Ben Anderson as "imagined communities" could be built, are utterly out of date. They may still be relevant if we're talking about hermit states like North Korea that shut out the Net to maintain that kind of classic totalitarian control. As descriptions of the world system they are about as relevant as academic economics is to the way business actually works.

Comment by John McCreery on February 5, 2013 at 1:21am

Keith, I wonder, are you aware of Jim Wallis and the Sojourners movement in the USA? Wallis is a rare bird, a fundamentalist Christian minister of progressive political inclinations, also an effective political organizer.  A recurrent theme on his website and in his magazine is the proposition that a budget is a moral document, a statement of moral priorities. 

Comment by Keith Hart on February 4, 2013 at 6:25pm

Johannes, My first easy idea in writing The Memory Bank was that the digital revolution made it possible to personalize the impersonal society of the twentieth century through money. I soon learned, however, that this was misleading. The dialectic of personal agency and impersonal society is permanent and the historical question should rather be "How does the personal/impersonal relationship move over time?" That is the theme of The Hit Man's Dilemma (2005) and it was already acknowledged in the chapter you mention. One reason I chose to add Money in an Unequal World as the book's subtitle and later the main title for the second edition is that almost all my academic friends took a dim view of the idea that the digital revolution, harnessed to money, might have emanipatory potential. Look at the banks and companies like Tesco's, they said, who can take advantage of this revoution when we can't; they considered the internet to be a further source of inequality, a new entrenchment of haves and have nots. Against this I would say, of course it's unequal and many are excluded, but I am interested in the democratic potential for those who do gain access. But to appease them I kept the subtitle. I wonder which side is best described as "ivory tower".

I have spent the intervening dozen years exploring this issue further. Here is an excerpt from an article, "Money is always personal and impersonal" (Anthropology Today 23.5, 2007):

It is now possible to attach a lot of information about individuals to transactions at distance. The trend is thus to restore personal identity to impersonal contracts, not least in the market for credit/debt. Of course, powerful organizations have access to huge processors with which to manipulate an often unknowing public; and rich individuals always experienced markets and money as personalities in their own right. But for many people these developments have introduced new conditions of engagement with the impersonal economy. The idea is slowly taking root that society is less an oppressive structure out there and more a subjective capacity that allows each of us to learn how to manage our relations with others. Money symbolizes this shift. It once took the form of objects outside ourselves of which we had a greater need than the available supply; but now it is increasingly manifested as digitized transfers mediated by plastic cards and communications satellites, thereby altering the notions of economic agency that we bring to participation in markets. Cheap information is undermining the assumptions that supported mass production and consumption for a century.

Economic anthropology should aim to show that the numbers on people’s financial statements, bills, receipts
and transaction records constitute a way of summarizing their relations with society at a given time. The next step is to explain where these numbers come from and how they might serve in building a viable personal economy. When individuals are able to take responsibility for their own economic actions, they will understand better the social forces impinging on their lives. Then it will become more obvious how and why ruling institutions need to be reformed for all our sakes. If credit cards could be seen as a step towards greater humanism in economy, this also entails increased dependence on the impersonal organization of governments and corporations, on impersonal abstraction of the sort associated with computing operations and on the need for impersonal standards and social guarantees for contractual exchange. Once we accept that money is a way of keeping track of complex social networks that we each generate, it could take a wide variety of forms compatible with both personal agency and collective forms of association at every level from the local to the global. It is up to us to build them.

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