Money and Credit (Sociology)

Introduction

Money is a central institution in modern economies. It quantifies economic worth according to a common metric; it plays a fundamental role in the commensuration of goods and social relations. As such, money is a social technology that permeates virtually all aspects of economic activity, and economic exchange in market societies would be impossible without the use of money. Yet neoclassical economics—the dominant school of economic thought— takes the most astonishing features of money for granted. Thus, in neoclassical economics, money is supposed to fulfill its functions without the interference of social and institutional constraints, and the cold logic of monetary computation is not supposed to admit cultural factors. Sociological analyses of money and credit pose a fundamental challenge to the conceptualization of money in neoclassical economics. Instead of seeing money as a neutral veil—a mere lubricant of economic exchange—sociologists examine how money is embedded in social relations, how social institutions shape money, and how monetary relations affect society. This research agenda yields important insights on the manifold dimensions of money in society. For instance, sociological research is particularly successful in examining how social factors such as trust underlie the functioning of money and credit in modern economies. In addition, there is a significant body of sociological findings on how cultural meanings and power relations shape the use of money in everyday life. In recent years, an increasing number of sociologists have begun to pay attention to the complex relations between monetary systems and politics. Sociologists who approach money as a topic of study often identify with other subfields of sociology, such as cultural sociology, economic sociology, and sociology of finance. As such, the research on money benefits from the venerable traditions and methods in other sociological subfields.

General Overviews

Ferguson 2008 offers a lively introduction suitable for a general audience by situating the scholarly analysis of money and credit within the historical development of finance. A particularly useful starting point is Carruthers and Ariovich 2010, which caters specially to researchers and students who are not familiar with the sociology of money and credit. Eagleton and Williams 1997 approaches the long and fascinating history of money and credit across cultures and geographical regions from the perspective of numismatics and archeology. Graeber 2011 digs into the same historical material but with a critical focus on the relationship between morality and money—a question that also motivated classical sociological analyses of money. Graeber’s book is also a useful introduction to the anthropological tradition on money and credit. Given the interdisciplinary nature of research on money and credit, Ingham 2005 fills an important vacuum by combining classical and contemporary readings from several social disciplines. The introduction to the edited volume offers a clear survey of the disciplinary differences within the scholarly literature. For the ontology of money, the most contentious topic in the study of money and credit, Smithin 2000 provides excellent summaries of virtually all important schools of thought.

Carruthers, Bruce G., and Laura Ariovich. 2010. Money and credit: A sociological approach. London: Polity.
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An introduction to money and credit firmly situated in contemporary sociology. Surveys classical as well as contemporary works on the history of money, the social meaning of money, the distribution of credit in society, and the role of credit in capitalist corporate economy.
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Eagleton, Catherine, and Jonathan Williams, eds. 1997. Money: A history. New York: St. Martin’s.
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An excellent introduction to money’s origins, meaning, and uses in history. While the book aims a general audience, its global coverage and informative essays make it an essential reading.
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Ferguson, Niall. 2008. The ascent of money: A financial history of the world. London: Penguin.
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Offers a bird’s-eye view of the coevolution of money and finance. While the historical narrative is uneven, The Ascent of Money provides an entertaining and accessible overview for a general audience. Ferguson’s accounts of crucial landmarks in financial history, such as the emergence of credit markets and commercialization of derivatives, are particularly informative.
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Graeber, David. 2011. Debt: The first 5,000 years. Brooklyn, NY: Melville House.
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Graeber’s book is about morality and the market; it asks fundamental questions about morality when markets quantify an increasing proportion of social life. Along the way, his book presents a critical history of money, monetary thinking, and financial relations in diverse societies. While the book is resolutely radical and brilliant in its synthesis, its universal history has been criticized for failing to recognize the diversity and fluidity of money in everyday life.
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Ingham, Geoffrey, ed. 2005. Concepts of money: Interdisciplinary perspectives from economics, sociology and political science. Cheltenham, UK: Edward Elgar.
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Wide-ranging selection of classical and contemporary works on the conceptualization of money. While the emphasis is on contending perspectives within economics (neoclassical, Marxist, and heterodox schools of economic thought), the volume also covers sociological approaches to money.
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Smithin, John, ed. 2000. What is money? London: Routledge.
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Contains essays representing diverse viewpoints on the nature and origins of money. Particularly useful are the introduction by Smithin, Ingham’s analysis of the social origins of money, and Wray’s account of modern money. Parguez and Seccareccia’s chapter offers an accessible introduction to the circuit theory of money.
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Classics

Discussions of the nature of money hark back to Aristotle. Contemporary scholarly analyses of money, however, follow in the footsteps of a select number of thinkers from the 19th and early 20th centuries. The most influential among these within contemporary sociology of money and credit are Simmel 2004, a sophisticated work on money and modernity; Polanyi 1968, which demonstrates the distinction between special-purpose monies and general-purpose money; and Marx 1978, on the role of money in capitalist societies. Einaudi 1953, Innes 2004a, Innes 2004b, Knapp 1924, and Keynes 1930 are classics that continue to inspire the recent syntheses of state theory and credit theory of money (see also Ganssmann 2011, cited under General Sociological Studies and Ingham 2004 and Wray 1999, both cited under Modern State Theories of Money).

Einaudi, Luigi. 1953. The theory of imaginary money from Charlemagne to the French Revolution. In Enterprise and secular change. Edited by F. C. Lane and J. C. Riemersma, 229–261. London: Allen & Unwin.
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A fascinating historical account concerning real coins, moneta immaginaria (imaginary money), and moneta numeraria (money of account). Shows that in most European countries before the French Revolution an abstract unit of account was the standard for deferred payments and the prevalent “technical device” to keep accounts. Originally published in 1936, this article has significant implications for contemporary sociology of money and credit.
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Innes, A. Mitchell. 2004a. The credit theory of money. In Credit and state theories of money: The contributions of A. Mitchell Innes. Edited by L. Randall Wray, 50–78. Cheltenham, UK: Edward Elgar.
DOI: 10.4337/9781843769842Save Citation »Export Citation »E-mail Citation »
Articulates the credit theory of money, where the value of money and “moneyness” are stipulated to derive from the capacity to settle debt payments.
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Innes, A. Mitchell. 2004b. What is money? In Credit and state theories of money: The contributions of A. Mitchell Innes. Edited by L. Randall Wray, 14–49. Cheltenham, UK: Edward Elgar.
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Originally published in 1913 and rather obscure until recently, this article offers a trenchant criticism of theories stipulating money’s origins in barter and exchange. Innes mounts an effective criticism of commodity theory of money and lays out the foundations of modern credit and state theories of money (also see Ingham 2004 and Wray 1999, both cited under Modern State Theories of Money).
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Keynes, John M. 1930. A treatise on money. London: Macmillan.
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Although this is a complex work that is much more than just a treatise on the nature of money, the first two chapters articulate a lucid argument on money being first and foremost an abstract unit of account that takes various different forms in society.
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Knapp, Georg Friedrich. 1924. The state theory of money. London: Macmillan.
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The classical work on the connection between money as measure of value and the state. The first edition was published in 1905. Unfortunately, the English translation (based on the fourth edition) omits the historical analysis that was present in the original.
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Marx, Karl. 1978. The power of money in bourgeois society. In The Marx-Engels reader. Edited by Robert C. Tucker, 101–105. New York: Norton.
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Marx’s views on the nature of money are scattered into various parts of his work, including A Contribution to a Critique of Political Economy and Capital. However, these few pages from Economic and Philosophic Manuscripts of 1844 offer some of Marx’s sharpest attacks on “the object of eminent possession” in capitalist society—money.
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Menger, Karl. 1892. On the origin of money. Economic Journal 2.6: 239–255.
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The classical account of the evolution of money in a barter economy, outlining the conceptual basis of neoclassical analyses of money (discussed in Neoclassical Approach to Money and Credit).
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Polanyi, Karl. 1968. The semantics of money uses. In Primitive, archaic, and modern economies: Essays of Karl Polanyi. Edited by George Dalton, 175–203. New York: Anchor.
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Elaborates on the distinction between special-purpose (payment, storage, accounting, and exchange) and all-purpose money (money as means of exchange unifying all the other uses). Argues that the different uses of money were institutionalized separately in much of history and that money as a means of exchange could not have given rise to the other uses of money.
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Simmel, Georg. 2004. The philosophy of money. London: Routledge.
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Despite Simmel’s own proclamation that his book is concerned more with modern life than money, The Philosophy of Money—especially the first part—contains profound insights on abstract value and money. Offers a distinct approach to the connections between measure of value, social relations, and exchange. This approach continues to inspire contemporary sociological research on money. The English translation is based on the second edition, originally published in 1907.
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Origins and History of Money and Credit

Given the paucity of historical data, the historical origins of money are likely to remain mysterious, and it is highly probable that money emerged from multiple different social practices independently. Nevertheless, the historical analyses of the development of money are important in understanding the nature of money. There is a wealth of information and historical analyses on the development of money and credit in different parts of the world. Among these works, Grierson 1977 is pertinent to the sociology of money and credit, as it engages Polanyi 1968 (cited under Classics) on general-purpose and special-purpose monies. Ingham 2000 provides a sociological perspective that relies heavily on the historical literature in answering fundamental questions on the nature of money. For those who want to consult the vast literature on the history of money, Davies 2002, Kindleberger 1984 and Vilar 2011 provide detailed historical accounts of the evolution of diverse forms of money and credit. The historical surveys in Harris 2008 and Peng 1994 are useful for understanding the early origins and development of money in ancient China, Greece, and Rome.

Davies, Glyn. 2002. A history of money: From ancient times to the present day. Cardiff: Univ. of Wales Press.
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Focuses mostly on Europe and the United States, covering the rest of the world only occasionally. Despite such limitations, Davies skillfully combines chronological narrative with institutional analyses of state finances, banking, and the credit system.
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Grierson, Philip. 1977. The origins of money. London: Athlone.
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Provides a historical explanation of how the transition from special-purpose money to a general measure of value occurred. Grierson, a distinguished numismatist, emphasizes the emergence of large-scale political organizations and the development of a legal system enabling compensation for personal injuries.
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Harris, William V., ed. 2008. The monetary systems of the Greeks and Romans. Oxford: Oxford Univ. Press.
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A comprehensive survey of money in the ancient Greece and the Roman Empire. Schaps’s review of the literature on money in ancient Greece and Harris’s chapter on the nature of money in Rome are of interest to the nonspecialist.
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Ingham, Geoffrey. 2000. “Babylonian madness”: On the historical and sociological origins of money. In What is money? Edited by John Smithin, 16–41. London: Routledge.
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A historical sociological account of the origins of money. Shows, through numismatic and historical evidence, the social forces that are likely to lie at the origins of money.
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Kindleberger, Charles P. 1984. A financial history of western Europe. London: Allen & Unwin.
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Outlines a complex history with great erudition. However, the absence of an analytical framework and Kindleberger’s aversion to synthesis make this a difficult book to read. Best used as a starting point and a reference volume on the evolution of different monetary instruments in Europe’s long financial history.
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Peng, Xinwei. 1994. A monetary history of China. Bellingham, WA: Univ. of Western Washington.
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Although there are now more penetrating studies on particular eras and topics in the history of money in China, Peng Xinwei’s book maintains its value as the most comprehensive introduction to the history of money and credit in China. Originally published in 1954 and revised in 1965.
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Vilar, Pierre. 2011. A history of gold and money, 1450 to 1920. London: Verso.
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An extensive survey of the interaction between credit, fiduciary money (e.g., paper money), precious metals, and prices in Europe. Presents a historical account critical of orthodox theories of money, including the quantity theory of money. Originally published in French in 1974.
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The Neoclassical Approach to Money and Credit

The neoclassical economics’ approach to money derives from an elegant theory of money’s origins in barter and trade. First formulated in a logically rigorous fashion in Menger 1892 (cited under Classics), this view of money can be found in all standard economics textbooks. Despite some methodological and theoretical innovations, the modern neoclassical analyses of money directly stem from the insights outlined in Menger 1892 (cited under Classics). While this approach narrates an elegant story on the origins of money and functions of monetary instruments, it finds little support in empirical evidence accumulated in anthropology, history, and sociology (see Origins and History of Money and Credit). As such, neoclassical economists are rarely in dialogue with other disciplines on money and credit. This is not entirely surprising, as neoclassical economics has an overwhelming preference for deductive reasoning and mathematical models, often at the expense of empirically sensitive research. In contrast, the beginning point for many researchers in sociology is a critical attitude toward neoclassical theories of money. The following influential articles give a good survey of the ways in which money and credit are modeled in neoclassical economics. Jones 1976 elegantly captures the modern neoclassical viewpoint on the origins and function of money through a mathematical model that generalizes the insights of Menger 1892 (cited under Classics). Kiyotaki and Wright 1989 and Kiyotaki and Wright 1993 continue this tradition by situating the analysis of money within the broader literature on search economics. For criticism from various other social sciences, see Ingham 2004 (cited under Modern State Theories of Money) and Smithin 2000 (cited under General Overviews).

Jones, Robert A. 1976. The origin and development of media of exchange. Journal of Political Economy 84.4: 757–775.
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A modern theoretical formulation of the mainstream viewpoint on money as medium of exchange. Develops a theory of money’s emergence from the uncoordinated action of market actors, where search costs lead individuals—in the absence of centralized coordination—to settle on an agreed medium of exchange.
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Kiyotaki, Nobuhiro, and Randall Wright. 1989. On money as a medium of exchange. Journal of Political Economy 97.4: 927–954.
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A widely influential paper that presents a general equilibrium search-theoretic model of commodity money as medium of exchange. Shows that commodity money is an optimal instrument for organizing exchange when search is costly and distribution is decentralized.
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Kiyotaki, Nobuhiro, and Randall Wright. 1993. A search-theoretic approach to monetary economics. American Economic Review 83.1: 63–77.
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Extends and generalizes Kiyotaki and Wright 1989 by considering fiat money.
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General Sociological Studies

The sociological literature on money features an impressive array of theorists and influential accounts of modernity such as the one found in Simmel 2004 (cited under Classics). However, money was not a persistent theme in mainstream sociology until the emergence of new economic sociology in the early 1980s. The new economic sociology that mushroomed during the 1980s led to a number of sociological analyses that answer crucial questions on the role of money in social life. These questions include how everyday use of money is intimately related to its meaning in particular social contexts and what the social foundations of money and credit are. The following surveys offer a comprehensive map of the sociological literature on money and credit. Among these, Zelizer 1989 stands out as a solid introduction to and criticism of the sociological tradition on money. Carruthers 2005 is unique in its survey of the anthropological, historical, and legal literatures concerning credit. Keister 2002 illustrates the connections between the sociological analysis of money and the literature on banking. Dodd 1994 and Baker and Jimerson 1992 survey the main approaches to the study of money within new economic sociology. The reader can also consult Dodd 2014 (cited under Diversity and Emergence of New Monetary Forms) for an eclectic survey that relies on various schools of thought in anthropology, philosophy, and social theory.

Baker, Wayne E., and Jason B. Jimerson. 1992. The sociology of money. American Behavioral Scientist 35.6 (1 July): 678–693.
DOI: 10.1177/0002764292035006005Save Citation »Export Citation »E-mail Citation »
Offers a survey of the sociological literature that distinguishes structural and cultural perspectives and then examines various works within each perspective that investigate money at the micro and macro levels.
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Carruthers, Bruce G. 2005. The sociology of money and credit. In Handbook of economic sociology. Edited by Neil J. Smelser and Richard Swedberg, 355–378. Princeton, NJ: Princeton Univ. Press.
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The most comprehensive survey of the sociological literature on money and credit. Particularly strong in its coverage of historical and legal literatures on credit.
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Dodd, Nigel. 1994. The sociology of money: Economics, reason and contemporary society. Cambridge, MA: Polity.
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In addition to surveying various approaches to the study of money, Dodd argues that various different functions of money in society should be examined by situating these functions in social networks of monetary transactions and of information flow.
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Ganssmann, Heiner, ed. 2011. New approaches to monetary economics and theory: Interdisciplinary perspectives. London?and New York: Routledge.
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Contains important essays by sociologists and heterodox economists who are critical of neoclassical theories of money. The chapters by Aydınonat, Carruthers, Ganssmann, and Smithin illustrate the increasingly fruitful exchange between heterodox economics and sociology on money and credit.
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Gilbert, Emily. 2005. Common cents: Situating money in time and place. Economy and Society 34.3: 357–388.
DOI: 10.1080/03085140500111832Save Citation »Export Citation »E-mail Citation »
A wide-ranging survey of different sociological approaches to the study of money, emphasizing in particular the embeddedness of money in social relations. Issues a call for studying the temporal and spatial dimensions of monetary circuits and relations.
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Keister, Lisa A. 2002. Financial markets, money, and banking. Annual Review of Sociology 28:39–61.
DOI: 10.1146/annurev.soc.28.110601.140836Save Citation »Export Citation »E-mail Citation »
While there are close connections between sociology of money and sociology of financial markets, the foci of these literatures often differ. This review offers a useful starting point to trace where these literatures overlap and where they differ.
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Kus, Basak. 2015. Sociology of debt: States, credit markets, and indebted citizens. Sociology Compass 9.3: 212–223.
DOI: 10.1111/soc4.12247Save Citation »Export Citation »E-mail Citation »
Reviews the burgeoning literature on increasing levels of credit and indebtedness in the world economy. Kus argues that several demand and supply factors (such as low wages, income inequality, culture of consumption, government regulations, and easy access to credit) contribute to the increasing levels of credit and debt. She further observes that all of these factors are tightly coupled with the neoliberal transformation in the world economy since the 1970s.
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Zelizer, Viviana. 1989. The social meaning of money. American Journal of Sociology 95.2: 342–377.
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One of the most authoritative accounts of how the sociological tradition approaches the study of money. Republished as a chapter in Zelizer 1994 (cited under Circuits and Social Meaning of Money), this article can be read as a particularly illuminating account of the strengths and weakness of classical sociological perspectives on money.
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Theoretical Debates in the Ontology of Money and Credit

The most fundamental question concerning money—“What is money?”—is also the most contentious. The sociology of money and credit has witnessed heated debates in recent years regarding the nature of money and credit. While the different parties in these debates share a critical attitude toward neoclassical economics’ approach to money, they diverge—often significantly—on what money is and how different monetary instruments should be classified. However, these debates are not simply debates concerning the ontology of money. They also reflect quite different research methodologies and theoretical traditions that concurrently exist within economic sociology. Hence the following works can be read as the clash of different research traditions in sociology of money and credit, including Chartalism, credit theory of money, the Simmelian approach, and Zelizer’s influential perspective on circuits and specific purpose. As such, they offer a useful portrayal of the complementarities and contradictions between different approaches in sociology of money and credit. In particular, the theoretical debate between Dodd 2007 and Ingham 2007 and the exchange between Fine and Lapavitsas 2000 and Zelizer 2000 illustrate that the fluidity of money and its diverse uses in social life justify a multiplicity of theoretical and methodological approaches. The theoretical debate between Dodd 2007 and Ingham 2007 is valuable in itself for the penetrating analyses of Simmel’s approach to money (Simmel 2004, cited under Classics).

Dodd, Nigel. 2005. Laundering: On the need for conceptual clarity within the sociology of money. European Journal of Sociology 46.3: 387–411.
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Provides a novel approach to the nature of money by developing Simmel’s “pure concept of money”—an ideal that can be approximated by actual forms of money but can never be attained fully. Employs this perspective to analyze the contemporary diversity of money and the proliferation of monetary forms.
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Dodd, Nigel. 2007. On Simmel’s pure concept of money: A response to Ingham. European Journal of Sociology 48.2: 273–294.
DOI: 10.1017/S0003975607000379Save Citation »Export Citation »E-mail Citation »
Offers a penetrating analysis of Simmel’s sociology of money, in addition to defending Dodd’s original position regarding the “pure concept of money” against the forceful criticism by Ingham.
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Fine, Ben, and Costas Lapavitsas. 2000. Markets and money in social theory: What role for economics? Economy and Society 29.3: 357–382.
DOI: 10.1080/03085140050084561Save Citation »Export Citation »E-mail Citation »
A Marxist criticism of the sociology of money, in particular of Viviana Zelizer’s influential work on the meaning of money. The authors offer a nuanced commodity theory of money based on Marxist political economy, emphasizing the relationship between commodities and money as the universal equivalent.
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Ingham, Geoffrey. 2007. The specificity of money. European Journal of Sociology 48.2: 265–272.
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A sharp criticism of Dodd’s application (Dodd 2005) of Simmel to contemporary diversity of monetary forms. Useful in further elucidating the ontology of money laid out in Ingham 2004 (cited under Modern State Theories of Money).
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Zelizer, Viviana. 2000. Fine tuning the Zelizer view. Economy and Society 29.3: 383–389.
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Zelizer’s rejoinder to Fine and Lapavitsas’s criticism of the sociology of money (Fine and Lapavitsas 2000). An important illustration of the strength and distinctiveness of the sociological approach to the study of money.
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Social and Institutional Foundations of Money and Credit

A distinguishing strength of economic sociology is the analysis of social infrastructures that undergird economic phenomena. Thus it is not a surprise that sociologists have contributed remarkable analyses of the various social institutions that provide the foundations of money and credit. Kuroda examines how different social structures underlie currency-dependent and credit-dependent monetary systems. Carruthers and Stinchcombe 1999 illustrates the important connection between social knowledge and liquidity in monetary markets. Espeland and Stevens 1998 argues that cognitive techniques such as commensuration and quantification enable valuation based on a common metric—a crucial aspect of money. Guseva and Rona-Tas 2001 and Poon 2009 show how quantification of risk plays a fundamental role in credit markets. Lapavitsas 2007 discusses how trust enables the operation of credit markets. Fourcade and Healy 2013 examines how credit markets are intertwined with social stratification under neoliberalism. MacKenzie and Millo 2003 investigates the role of economic ideas in the emergence of new monetary instruments (cited under Diversity and Emergence of New Monetary Forms). Hence these sociological analyses demonstrate how particular knowledge structures, cognitive techniques, and trust networks enable the features of money, such as commensuration, that social actors take for granted in everyday life.

Carruthers, Bruce G., and Arthur L. Stinchcombe. 1999. The social structure of liquidity: Flexibility, markets, and states. Theory and Society 28:353–382.
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An influential sociological account of liquidity in financial markets, which defines it as a problem in the sociology of knowledge. Carruthers and Stinchcombe argue that liquidity depends on the homogenization of heterogeneous commodities and income streams. They then show that such homogenization is a cognitive achievement in the construction of public knowledge.
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Espeland, Wendy Nelson, and Mitchell L. Stevens. 1998. Commensuration as a social process. Annual Review of Sociology 24 (1 January): 313–343.
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Commensuration and quantification based on a common metric lie at the core of money’s function as a measure of value. The authors argue that commensuration is a symbolic act laden with power relations. They further discuss commensuration in relation to classics within sociology of money.
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Fourcade, Marion, and Kieran Healy. 2013. Classification situations: Life-chances in the neoliberal era. Accounting, Organizations and Society 38.8: 559–572.
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Studies how the credit market in the United States shapes life chances by classifying individuals according to credit risk. The authors illustrate how credit-scoring techniques produce distinct advantages and disadvantages for individuals. They argue that the cumulative result of such classification situations is an increasingly important dimension of social stratification.
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Guseva, Alya, and Akos Rona-Tas. 2001. Uncertainty, risk, and trust: Russian and American credit card markets compared. American Sociological Review 66.5: 623–646.
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Through an original comparison of the then-nascent Russian credit market and the long-established American credit market, the authors show how institutions enable credit markets by reducing uncertainty and quantifying risk.
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Kuroda, Akinobu. 2013. Anonymous currencies or named debts? Comparison of currencies, local credits and units of account between China, Japan and England in the pre-industrial era. Socio-Economic Review 11.1: 57–80.
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By comparing monetary systems in the rural economies of China, Japan, and England in the preindustrial era, Kuroda shows how communal property management, communal cohesiveness, and network clustering in England and Japan tended to produce credit-dependent monetary systems with a single unit of account. The case of China stands in contrast to England and Japan, where a high degree of anonymity in society led to currency dependence and plurality in the unit of account.
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Lapavitsas, Costas. 2007. Information and trust as social aspects of credit. Economy and Society 36.3: 416–436.
DOI: 10.1080/03085140701428381Save Citation »Export Citation »E-mail Citation »
Shows how credit is predicated upon trust and the norm of payment by examining credit relations among individuals, commercial enterprises, financial institutions, and central banks.
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MacKenzie, Donald, and Yuval Millo. 2003. Constructing a market, performing theory: The historical sociology of a financial derivatives exchange. American Journal of Sociology 109.1: 107–145.
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An impressive illustration of the notion of performativity—the idea that economic ideas shape the economic reality they aim to explain—in the context of financial derivatives. The authors show how the Black-Scholes-Merton option pricing theory was instrumental in the emergence of novel monetary instruments.
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Poon, Martha. 2009. From New Deal institutions to capital markets: Commercial consumer risk scores and the making of subprime mortgage finance. Accounting, Organizations and Society 34.5: 654–674.
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Traces the historical development of consumer credit scores in the United States and their use in mortgage underwriting. Poon shows how the rise of the subprime mortgage market was far from spontaneous. It instead was the result of direct government intervention and the engineering of shared calculation techniques by industry actors.
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Political Sociology of Money and Credit

Several sociological studies examine the relations between power, politics, and the operation of monetary systems. These macro-sociological works offer valuable insights on how the historical development of money and credit are intertwined with politics and power dynamics at the nation-state and international levels. Block 1977 examines the political underpinnings of money and credit in the international arena after World War II. Arrighi 1994 provides a theoretically informed historical analysis of how the expansion of finance through the emergence of new monetary instruments is related to the global dynamics of capitalist accumulation. Krippner 2011 defines financialization as a fundamental transformation in capitalism and explains the rise of finance in the American economy since the 1970s. Prasad 2012 investigates a related phenomenon, the prevalence of easy credit in the American economy. Carruthers 1996, Carruthers and Babb 1996, and Polillo 2011 show how politics play a fundamental role in the institutionalization of money and credit.

Arrighi, Giovanni. 1994. The long twentieth century: Money, power, and the origins of our times. London: Verso.
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Provides an analysis of money and credit by examining several episodes of financial expansion in the history of world economy. Starting from Genoese economy in the 14th century and ending in contemporary financialization of the American economy (see Krippner 2011), Arrighi examines how finance is related to capitalist accumulation and political dynamics among great powers.
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Block, Fred L. 1977. The origins of international economic disorder: A study of United States international monetary policy from World War II to the present. Berkeley: Univ. of California Press.
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Presents a historical sociology of the birth and collapse of the Western international monetary system after World War II. Block emphasizes how power relations between the United States and Western Europe, the Cold War security considerations, and ideological beliefs shaped the institutional setup of the Bretton-Woods monetary system and created contradictions that would lead to its collapse.
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Carruthers, Bruce G. 1996. City of capital: Politics and markets in the English financial revolution. Princeton, NJ: Princeton Univ. Press.
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Examines one of the most important chapters in financial history from a perspective inspired by the notion of embeddedness in economic sociology. Through a detailed historical study, the book investigates how politics was integral to the operation of financial markets during the English financial revolution.
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Carruthers, Bruce G., and Sarah Babb. 1996. The color of money and the nature of value: Greenbacks and gold in postbellum America. American Journal of Sociology 101.6: 1556–1591.
DOI: 10.1086/230867Save Citation »Export Citation »E-mail Citation »
Money as measure of value is often taken for granted. This article studies the social construction of money as a measure of value and shows how political conflict played a role in the institutionalization of money in the postbellum United States.
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Krippner, Greta R. 2011. Capitalizing on crisis: The political origins of the rise of finance. Cambridge, MA: Harvard Univ. Press.
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Defines financialization as the shift in profit-making from productive activities to financial channels and examines its political origins in the United States. Krippner shows that financialization has its roots in how US policymakers responded to the social and economic crises of the late 1960s and early 1970s by liberalizing interest rates, credit allocation, and capital flows.
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Polillo, Simone. 2011. Money, moral authority, and the politics of creditworthiness. American Sociological Review 76.3 (1 June): 437–464.
DOI: 10.1177/0003122411407737Save Citation »Export Citation »E-mail Citation »
Studies how moral authority underlies the institutionalization of creditworthiness, which Polillo sees as a defining property of organizations that produce stable money.
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Prasad, Monica. 2012. The land of too much: American abundance and the paradox of poverty. Cambridge, MA: Harvard Univ. Press.
DOI: 10.4159/harvard.9780674067813Save Citation »Export Citation »E-mail Citation »
Develops an argument on how consumption-driven economic growth, poverty, and anemic welfare state are connected to easy credit in the United States. Prasad traces the origins of US easy credit to the late 19th and early 20th centuries by focusing on agricultural overproduction, agrarian resistance against sales tax, and expansion of private consumption through the increased availability of credit.
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Modern State Theories of Money

The past two decades witnessed a revival of research from heterodox economics on the nature of money. By building on the works of Knapp 1924, Innes 2004a, Innes 2004b, and Keynes 1930 (all cited under Classics), heterodox economists have developed powerful analyses of how the state’s power to tax is an essential determinant of what is accepted in society as the measure of value and means of payment. For instance, Bell 2001 illustrates how sovereign money’s privileged status as a common metric of value is tied to the taxation powers of the state. Wray 1999 presents a mature statement of the state theory of money. Goodhart 1998 is useful in delineating how the state theory of money differs from conventional conceptualization of money (discussed in Neoclassical Approach to Money and Credit). The monetary analyses of heterodox economists offer fruitful venues for theoretical development within sociology of money and credit, as can be seen in Ingham 1998 and Ingham 2004. Ingham’s synthesis of the sociological tradition and heterodox economics is theoretically rich and empirical works that take advantage of this richness are yet to appear.

Bell, Stephanie. 2001. The role of the state and the hierarchy of money. Cambridge Journal of Economics 25.2 (1 March): 149–163.
DOI: 10.1093/cje/25.2.149Save Citation »Export Citation »E-mail Citation »
Develops state theories of money further by showing how the sovereign capacity to tax is at the root of sovereign money’s privileged status among different types of monies.
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Goodhart, Charles A. E. 1998. The two concepts of money: Implications for the analysis of optimal currency areas. European Journal of Political Economy 14.3 (August): 407–432.
DOI: 10.1016/S0176-2680(98)00015-9Save Citation »Export Citation »E-mail Citation »
An extensive comparison of the strengths and weaknesses of Metallist and state theories of money. Argues that state theories of money (Chartalism) is much more successful in historical and institutional analyses of money, including the analysis of the historical origins of money.
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Ingham, Geoffrey. 1998. On the underdevelopment of the “sociology of money.” Acta Sociologica 41.1: 3–18.
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Inspired by state theories of money, this article offers a sharp criticism of the sociological tradition on money. Particularly useful in understanding the theoretical framework outlined in Ingham 2004.
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Ingham, Geoffrey. 2004. The nature of money. Cambridge, UK: Polity.
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One of the most comprehensive sociological treatises on the nature of money (see Dodd 1994, cited under General Sociological Studies and Dodd 2014, cited under Diversity and Emergence of New Monetary Forms for alternative accounts). The analytical contribution of the book derives from combining sociological perspectives with state theories of money. In addition, Ingham surveys nearly all the contemporary approaches to money and its role in modern societies.
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Wray, L. Randall. 1999. Understanding modern money: The key to full employment and price stability. Cheltenham, UK: Edward Elgar.
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Advances a mature formulation of Chartalism or state theory of money. In this view, what is accepted as unit of account and measure of value follows from what the state accepts for payment of taxes.
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Circuits and Social Meaning of Money

Within sociology of money and credit, works that examine the social meaning of money constitute one of the most fruitful strands of empirical research. Inspired by Zelizer’s theoretical synthesis (see Zelizer 1989, cited under General Sociological Studies and Zelizer 1994), this body of research yields important findings on the role of money and monetary instruments in social life. In addition to the classical works on the social meaning of money, the following selection includes some particularly poignant illustrations of the diverse meanings of money in society. Baker 2001 and Belk and Wallendorf 1990 show that money is not simply a common metric of value but that it also acquires meanings shaped by social context. Bradford 2013, Pahl 1999, and Rogers 2005 demonstrate how the meaning of money structures its usage in everyday life in contexts ranging from household finances to the informal economy of Russian villages. Carruthers and Espeland 1998 examines the connections between symbolic meaning of money and morality. Zelizer 2005 develops the author’s earlier work by investigating how the meaning of money is embedded in particular social circuits.

Baker, Tom. 2001. Blood money, new money, and the moral economy of tort law in action. Law & Society Review 35:275.
DOI: 10.2307/3185404Save Citation »Export Citation »E-mail Citation »
A remarkable illustration of how a particular social context shapes the meaning of money and monetary compensation. Baker shows that practitioners of tort law attribute different meanings to payments made by insurance companies and payments made by uninsured and underinsured individuals.
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Belk, Russell W., and Melanie Wallendorf. 1990. The sacred meanings of money. Journal of Economic Psychology 11.1 (March): 35–67.
DOI: 10.1016/0167-4870(90)90046-CSave Citation »Export Citation »E-mail Citation »
A cogent challenge to the economistic idea that money has meaning only as a quantitative measure of value. Belk and Wallendorf show how money can acquire a sacred meaning depending on the source from which it is obtained and where it is used.
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Bradford, Tonya Williams. 2013. Earmarking money and consumption. In Research in consumer behavior. Vol. 15. Edited by Russell W. Belk, Linda Price, and Lisa Peñaloza, 167–183. Bingley, UK: Emerald.
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An in-depth investigation of how people earmark money for specific purposes and how the practice of earmarking shapes consumption behavior.
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Carruthers, Bruce G., and Wendy Nelson Espeland. 1998. Money, meaning, and morality. American Behavioral Scientist 41.10: 1384–1408.
DOI: 10.1177/0002764298041010003Save Citation »Export Citation »E-mail Citation »
Inspired by Wittgenstein’s pragmatic theory of language, this article offers a theory of how the practical use of money shapes its symbolic meaning. Furthermore, the authors show how networks of monetary flows constrain the symbolic meaning people attribute to money.
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Pahl, J. M. 1999. Invisible money: Family finances in the electronic economy. Bristol, UK: Policy.
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Examines new forms of money in the context of household finances. By using quantitative and qualitative data, Pahl shows how patterns of financial exclusion are shaped by class and gender.
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Rogers, Douglas. 2005. Moonshine, money, and the politics of liquidity in rural Russia. American Ethnologist 32.1 (1 February): 63–81.
DOI: 10.1525/ae.2005.32.1.63Save Citation »Export Citation »E-mail Citation »
An illuminating analysis of the meaning and uses of different currencies—moonshine, rubles, and US dollars—in the local economy of a small farming town in Russia. Shows how social inequality and power imbalances interact with different circuits of money.
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Zelizer, Viviana. 1994. The social meaning of money: Pin money, paychecks, poor relief and other currencies. New York: Basic Books.
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A contemporary classic, The Social Meaning of Money is arguably the most influential work within sociology of money. By relying on the distinction between special-purpose monies and general-purpose money (see Polanyi 1968, cited under Classics), Zelizer questions the common depiction of money as a homogenizing force in social life. The book illustrates how money has diverse meanings in social life and how such meanings create special monies with restricted usage.
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Zelizer, Viviana. 2005. Circuits within capitalism. In The economic sociology of capitalism. Edited by Victor Nee and Richard Swedberg, 289–322. Princeton, NJ: Princeton Univ. Press.
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Generalizes the Zelizer view on social meaning of money by situating the use of money in particular circuits such as migrant remittance networks where monetary media circulate.
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Diversity and Emergence of New Monetary Forms

Textbook accounts of money stress that money plays a crucial role in the commensuration of otherwise incommensurable objects and relations. In these accounts, money is a powerful homogenizer. Sociological research challenges this very idea. It also shows that money’s own embodiment in tangible and intangible media is subject to constant change and diversification. Hence the sociology of money and credit provides interesting analyses of the proliferation of monetary media and the emergence of novel monetary forms. Zelizer 1998 is a classical account of the proliferation of special-purpose monies in social life. Bryan and Rafferty 2007 and Esposito 2011 offer provocative approaches to understanding the “moneyness” of financial derivatives. Dodd 2005 aims to decipher how and why the forms of money in modern economies diversify. Dodd 2014 builds on Simmel’s view of money being a claim on society (see Simmel 2004, cited under Classics) to stress the fluidity of monetary forms.

Bryan, Dick, and Michael Rafferty. 2007. Financial derivatives and the theory of money. Economy and Society 36.1: 134–158.
DOI: 10.1080/03085140601089861Save Citation »Export Citation »E-mail Citation »
Examines the extent to which financial derivatives should be considered money. Shows that the “moneyness” of derivatives follows from their widespread use in commensurating different types of physical and financial assets.
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Dodd, Nigel. 2005. Reinventing monies in Europe. Economy and Society 34.4: 558–583.
DOI: 10.1080/03085140500277096Save Citation »Export Citation »E-mail Citation »
Proposes a new theoretical framework for understanding the proliferation of new monetary forms. Dodd argues that a fundamental property of money—its duality as a unit of account and as a medium—is the key to deciphering the accelerating diversification of monetary forms.
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Dodd, Nigel. 2014. The social life of money. Princeton, NJ: Princeton Univ. Press.
DOI: 10.1515/9781400852048Save Citation »Export Citation »E-mail Citation »
By using a wide-ranging array of social theories, Dodd argues against conceiving of money as having definite form and stable properties. Instead, it is a dynamic and contested social process. Hence neither the nature nor the form of money is fixed; they are ever-changing depending on the social life—the surrounding power relations, meanings, and functions—of money.
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Esposito, Elena. 2011. The future of futures: The time of money in financing and society. Cheltenham, UK: Edward Elgar.
DOI: 10.4337/9781849809115Save Citation »Export Citation »E-mail Citation »
An innovative theoretical study of financial derivatives and to which extent these monetary instruments should be considered money. The contribution of the book lies in its examination of how all forms of money are related to uncertainty and time.
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Zelizer, Viviana A. 1998. The proliferation of social currencies. The Sociological Review 46.S1: 58–68.
DOI: 10.1111/j.1467-954X.1998.tb03469.xSave Citation »Export Citation »E-mail Citation »
Applies Zelizer’s theoretical framework on special-purpose monies to the proliferation of monetary media in society, including new monetary forms such as electronic currencies.