Inverting the Panopticon: Money and the Nationalization of the Future

Gustav Peebles

All the stupidity and the arbitrariness of the laws, all the pain of the initiations, the whole perverse apparatus of repression and education, the red-hot irons, and the atrocious procedures have only this meaning: to breed man, to mark him in his flesh, to render him capable of alliance, to form him within the debtor-creditor relation, which on both sides turns out to be a matter of memory — a memory straining toward the future.

— Gilles Deleuze and Félix Guattari, “Savages, Barbarians, Civilized Men,” in Anti-Oedipus: Capitalism and Schizophrenia

The national paper money that predominates across the globe today is a relatively newfound phenomenon, as many authors have detailed (e.g., Brantlinger 1996; Cohen 1998; Davies 1997; Dodd 1994; Eichengreen 1996; Hart 1986; Helleiner 2003; Ingham 2004; Sargent and Velde 2002; Spahn 2001). However, some specific and technical aspects of its emergence have been neglected, and this has caused a failure to emphasize the manner in which national money is the gradual result of successive open and agreed-upon contracts between citizens, states, and banks, rather than exclusively the result of systemic changes dictated from the top down. Following this long developmental process starkly reveals the way in which the state comes to control semiotic processes, in effect, appropriating an international sign of value held by its citizenry (e.g., gold or silver) and replacing it with a national sign of value (paper or token coins). This exchange of international and national signs, then, carries important consequences for binding the citizens to the nation-state.1 Whereas most studies of nationalism contribute to our understanding of how citizens became tied to a convergent and produced national past, the history of the emergence of national paper money will show that it is equally important to consider the manner in which people became bound, in unison, to the nation-state’s future.2

In so binding the citizenry to the nation’s future, this paper money system in turn contributes to the production of the spatiotemporal boundaries that mark the nation-state. In effect, it creates a sort of inverted panopticon, wherein the citizens must be constantly gazing back into the nation’s center, for their own economic self-interest has now become attached to the management of the national currency. Johann Gottlieb Fichte (discussed below) noted this power long ago, explaining that such a paper currency could serve as the sole method to police the borders of his recommended autarkic state; the people, out of their own selfinterest, would not transgress national boundaries, for fear that their economic wealth would evaporate into a sea of nonrecognized signs abroad.

As Helleiner (2003) describes so well, economists and economic historians have analyzed this system for a long while, referring to the “transaction costs” of traversing from one currency into another. Building on the arguments of these historians of national money, I am attempting to frame the discussion in terms that become more useful and compelling to anthropologists, sociologists, and scholars in the humanities. To do so, I am following not only Ferguson and Gupta’s (2002) suggestion that we pay attention to the ways in which routinized practices contribute to the boundedness of the state, but also Guyer’s important recognition that different currencies impose different temporal demands (1995: 1 – 26).

In order to clarify these arguments, I cover the seemingly unrelated set of rhetorical claims and institutional practices that long sought to denigrate and abolish individual hoarding practices. Indeed, across many countries during the nineteenth century, the individual’s long-standing desire to keep watch over his or her own money became marked as a “barbaric” survival that needed to be banished from a properly civilized society. Such individuals needed to be taught the difference between solipsistic hoarding and “civilized” pooled saving. Civilized subjects needed to learn to trust social institutions, to accept a new division of labor wherein the surveillance of economic value could be handed over to a special class: bankers. And this special class would see to it that the money then circulated in a more “rational” fashion, rather than merely moldering in a mattress. Knut Wicksell, a vitally influential monetary theorist of the turn of the nineteenth century, succinctly encapsulated this opaque relationship between individual savings and currency when he wrote, “We must, therefore, devote all the more attention to the banks, which are in fact the heart and centre of modern currency systems” (1967: 73).

Reviving the claims of important economists from the nineteenth and early twentieth centuries such as Wicksell, I argue here that the slow separation of individuals from their hoards constitutes an important chapter in the history of national money. Indeed, early-twentieth-century economists went so far as to heap opprobrium upon national gold reserves — those bedrocks of national currencies’ value for many years — as being mere “survivals” of individual hoarding practices from a previous barbarian age, useless “remnants” that subsequent enlightened scientists and statesmen would do well to abolish (e.g., Keynes 1971b: 236 – 42 ; Wicksell 1967: 124, 193).

Thus, esteemed people such as Karl Marx, John Fullarton (a prominent member of the so-called Banking School of monetary theorists to whom Marx turned frequently), Walter Bagehot, John Maynard Keynes, Wicksell, and Fichte all recognized the deep connection between shifting techniques for storing economic wealth and the creation of national money. They were well aware that the paper money that represented previously individual hoards had now migrated to the banks. As I detail below, individual hoards gradually became part of private bank hoards and, eventually, public national hoards; then, because of emerging practices (and sometimes laws) concerning “reserve requirements,” the paper money that was issued was intimately related to the totality of money that had been extracted from individual hoards, now centralized in a larger “socialized hoard” (as Marx, discussed below, would say). In other words, by following these theorists and their documentation, one can see that history attests to the gradual creation of one giant, national mattress. In the United States, this mattress is called Fort Knox.

This article covers, therefore, the manner in which institutional forms of saving money (instead of hoarding it) were created that became attractive at a crucial moment in Europe’s and Euro-America’s climb to world dominance (the system, first consolidated in Britain, rapidly spread throughout other European and American countries). In effect, I trace the democratization of banking, the delivery of new savings techniques to the masses that encouraged the replacement of the individual hoard with a socialized one. In turn, these banks represented the democratization of capitalism itself, providing everyday holders of minuscule amounts of economic value the ability to become embroiled in the giant, swirling system of economic investment (see Wicksell 1967: 11 – 12). It is a remarkable moment in history, when countless people were gradually convinced to “draw their money out of the mattresses,” separate it from their individual surveillance, and hand it over to a trusted social institution that would provide surveillance for them (and a profit, as well).

The inception of the national reserves cum giant “hoard” therefore presents people with a new bounded sphere of circulation that had never been present when they carried an international sign of value in their pockets. As one “monetary nationalist” asserted in the early nineteenth century, metallic money (viz., money unattached to a reserve system) was too “cosmopolitan” (cited in Helleiner 2003: 114). In other words, such money allowed the individual user too much freedom to determine where to use it. By eliminating transaction costs at the intranational level, states instituted new transaction costs at the international level (when currency now had to be “translated”). In the process, these states thereby created a new method of regulating the mobility of the populace and its capital, even if they did so unintentionally.3

And thus, it may be worth thinking of the attempt to banish individual hoards as a process of what Gaonkar and Povinelli (2003) refer to as “transfiguration,” wherein individual citizens become marked by way of indexicality and mimesis. They continue: “But whether demanding environments are built to make one’s life easier or harder to negotiate, one’s body seem smoother or more jagged, they entail, demand, seduce, intoxicate, and materialize rather than simply mean. They member subjects and tell them how to recognize something as something else in various environments and with various values” (395 – 96). This last sentence perfectly encapsulates the new relationship between citizens and money once national money replaced international money. In Charles Peirce’s terms, the paper (sign) was an indexical-icon of the socialized hoard (object), and if users (interpreters) failed to recognize the integrity or existence of the immobilized hoard, the circulating indexical-icon lost all value; this indexical relationship between sign and object then clarifies that paper money can circulate only in a sphere of users who grasp the semiotic relationship.4 Simply put, the creation of a central and immobilized “currency reserve” initiates a new set of monetary borders that are different from the borders circumscribing money that circulates without a semiotic relationship to a reserve.5

As Deleuze and Guattari (1983) would say, these people became branded with an object that forced them to strain toward a particular future and particular spatial borders. It is my contention that this process is initiated with the nationalization of the currency reserves cum hoard, the moment when the state contracts with its citizens to turn in (and immobilize) their international sign of value in exchange for a (flowing) national one. By separating the value of money into “reserves” and representations of those reserves, the modern era created what might be called “alienated” money, that is to say, money whose “inherent” value lay outside of itself. This bifurcation of value and sign in turn contributes to the spatiotemporal borders of money, since money’s meaning becomes indexically related to a physical object (imagined to be safely ensconced) in a specific place. Suddenly, rather than following the supply and demand curves of the precious metals market, citizens now had to pay attention to the state and its ability to plan for and manage the future. After this shift, their personal economic wealth was now tallied in a unit of value that was related to how well the state managed its own finances, and not related to whether gold had been discovered in South Africa. The state, long recognized as a colonizer both of the past and of physical territory, here proves itself adept at colonizing the future, as well.

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Notes

This essay has greatly benefited from public presentations at Columbia University, Zagreb’s Multimedia Institute, and the University of Chicago’s workshop on money and markets. I especially thank Miran Bozicevic, Jessica Cattelino, Susan Gal, Anush Kapadia, Karin Knorr, Paul Kockelman, Kenneth McGill, Nene Panourgia, Rashmi Sadana, Natasha Schull, and Caitlin Zaloom for their critiques and insights. I am also grateful for the excellent advice I received from Claudio Lomnitz and the anonymous reviewers solicited by the journal. Discussions with John Comaroff also provided the original inspiration for this essay, and I would like to thank him for that.

1. Roitman 2005: 48 – 72 has an important discussion of currency as a binding agent in a colonial, rather than nation-state, context.
2. See the excellent volume edited by Sophie Day, Evthymios Papataxiarchis, and Michael Stewart (1999) for many insightful ethnographies of groups of people who fail to follow the state’s dominant “future orientation.” For detailed and insightful work on the manner in which financial instruments can bind people and spaces together, see Zaloom 2005 and 2006. A stimulating recent forum in the American Ethnologist also tackles the question of how to grapple with the future as an ethnographic object (see Guyer et al. 2007).
3. People could, of course, still traverse national borders, but it now had an added cost and added surveillance (discussed below). Furthermore, I am aware that even gold and silver money sometimes needed to be “translated” abroad prior to the emergence of paper money, at, e.g., an assaying office, for the mark on the money was unfamiliar to the new set of users. However, this translation remained an individual decision between a currency owner and an assayer (as the vitriol of the mercantilists proves), whereas paper money can be converted into another currency only under the gaze of the state, which now has the power — not least via the management or mismanagement of its currency reserves — to make paper money more or less attractive on the international market. Sweden’s 1992 raising of its interest rate to 500 percent serves as a particularly impressive example of how a state might proscribe any and all translations (see Peebles 2004), but there are many others.
4. Kockelman (2006) provides an excellent and very helpful set of guidelines for approaching capitalist commodities with Peircian terminology. I also draw inspiration — in particular, the role of trust in establishing monetary signs and circulation — from Wennerlind (2001). On money and trust, see also Dodd’s seminal (1994) contribution.