If all money is the same, why do we call some dollars “dirty” — or even “blood money” — and others “honest”? Why is the money we earn as a salary often spent differently from a lottery winning? Why did we invent gift certificates rather than offer straight cash? Why do organizations construct elaborate compensation systems marking differences between salaries, bonuses, and perks? Why is it that a wife’s money is often spent differently from her husband’s?
Some of these questions are getting unexpected answers. In the past few decades, novel approaches to money have challenged conventional wisdom: money is not one thing but many things. It turns out that how the money is earned, by whom, what it is spent on, when, and for whom often matters as much as — or more than — how much money is involved in the transaction. At stake is not just the quantity of money, but its quality; and that quality is variable. Consider, for instance, the powerful democratic symbolism of the small sums of money donated to Bernie Sanders’s presidential campaign in 2016. Surely, not all dollars are equal.
What explains money’s multiplicity? Behavioral economics tells us that people keep track of their finances by creating discrete mental compartments for their various moneys: rent money is thus set apart from entertainment money, investment money, or charity money. Unexpected funds occupy a different cognitive space from a salary or other forms of routine income, even when the sums involved are identical. People are likely to spend such windfalls less cautiously and more rapidly.
But these intriguing psychological partitions only explain part of money’s variability. Sociologists go further by showing how all of us dispense different “kinds” of money to mark distinctions among our social relations: we tip a waiter but not our spouse, we may give our child a weekly allowance but rarely our grandfather, we pay our employee with a salary not a gift certificate (unless it’s Christmas). We all care deeply about such monetary distinctions: the wrong kind of money might sometimes amuse us but will more often shock or offend. Why? Because mistakes violate our expectations of how social relations should work. Imagine my (and the administration’s) shock if one of my students offered me a bonus as an incentive to teach a better class.
The new money researchers thus puncture the illusion that all money is seamlessly interchangeable. But the revisionists go even further by boldly challenging our usual understandings of money’s morality. Money has long carried a bad moral reputation: we often think of it as tainting, and as inevitably corrupting personal relations with cold-blooded calculation. Once you start dealing with money, goes the argument, you stop caring about people. We often explain people’s moral failings by saying that he or she “did it for the money,” and just as often assert that “money destroys friendships” and that “everyone’s for sale — the only difference is in the price.” Some of our nation’s most brilliant minds worry about these nefarious effects. For instance, in What Money Can’t Buy (FSG, 2012), the political philosopher Michael J. Sandel warns us that “putting a price on the good things in life can corrupt them.” “Like water,” John Updike once wrote in one of his poems, money “(dis)solves everything.”
Not so, according to studies that investigate money’s multiple meanings and moralities, including my book The Social Meaning of Money (Princeton University Press, new edition 2017). If many different forms of money do indeed exist, then we should be able to discern between corrupting money and redeeming money. People regularly make such distinctions when they differentiate bribery from donation or extortion from request. And we even develop strategies for the moral laundering of those moneys that make us ethically queasy. Consider, for instance, Sue Klebold’s 2016 memoir about her son Dylan’s participation in the horrific Columbine High School massacre in 1999. Klebold makes it clear that she will not be profiting from the book’s sales by declaring that any profits will be donated to charities devoted to mental health issues. We can thus morally sanitize concerns about making money from a tragedy. As one recipient of the 9/11 Victim Compensation Fund explained about the monetary settlement he and his family received after his firefighter brother’s death, “Nobody went out and bought convertibles with it.” Instead the family set up a college scholarship fund in the brother’s name.
Or consider the estimated $65 million advance that Barack and Michelle Obama received from Penguin Random House for the rights to publish their books. According to press reports, the Obamas plan to donate part of their advances to charity, including the Obama Foundation. The donated money is meant to certify the moral underpinnings of the exorbitant transaction. Such certification is bipartisan: former President George W. Bush will donate proceeds from his 2017 book of paintings, Portraits of Courage, to groups helping veterans.
In Money Talks: Explaining How Money Really Works (Princeton University Press, 2017), a volume I co-edited with Nina Bandelj and Frederick F. Wherry, interdisciplinary scholars map out multiple facets of money’s moral as well as social and emotional life. What happens, for instance, when money enters households and other intimate relations, areas of life usually considered outside ordinary market transactions? How do surrogate mothers experience the exchange of babies for cash? And why does selling sex cells vary by gender, so that women’s provision of eggs is framed as a gift to recipients who are unable to have children while sperm donors define their donation as a job? How do morals and emotions shape our charitable contributions? And what about money’s social meanings when it circulates within organizations such as banks or other financial organizations? The book also explores the profound political symbolism of different forms of money: Why, for instance, does any tampering with the design of money evoke the sort of passionate debates we saw when the United States Department of the Treasury initially proposed to replace Alexander Hamilton with a woman on the $10 bill? If money is no more than an instrumental medium of exchange, why care about its looks?
Other recent books further bury the fantasy of amoral, fungible money. They examine money’s multiplicity and variable morality in settings as diverse as the corporations that mix money with social mission, studied by Emily Barman’s Caring Capitalism (Cambridge University Press, 2016), to the Argentine “villa miseria” (slum), documented by Ariel Wilkis’s The Moral Power of Money (Stanford University Press, forthcoming 2017). Wilkis discovered that the world of the poor in the “villa” was suffused with distinguishable categories of moneys: lent money, earned money, donated money, political money, and more. Beyond its economic value, each type of money served to mark moral distinctions. We hear from Sonia, the coordinator of a parish church soup kitchen, who refused to accept a salary in order to reaffirm her moral prestige within the religious community, marking her contributions as service rather than work. In my own Morals and Markets: The Development of Life Insurance in the United States (Columbia University Press, new edition 2017), I trace the changing moral standing of life insurance money. At the turn of the 20th century, insurance policies were often stigmatized as an immoral monetary gamble on human life. Indeed, middle-class widows, life insurance’s main beneficiaries, often rejected a policy as unholy “blood money” extracted from their husband’s death. Eventually, however, life insurance was incorporated as a meaningful contemporary ritual: in fact, “death money” became part of a good provider’s ethical duty.
Households are active sites of moral and other forms of monetary earmarking. Jonathan Morduch and Rachel Schneider’s The Financial Diaries (Princeton University Press, 2017) takes us into the world of low- and moderate-income households in five states across the United States. The authors tell us, for instance, how Janice, a single mother struggling to make ends meet as a casino dealer, is determined to set apart at least some “tithe money” for her father’s church, and how the Vargas family consistently puts aside extra funds for retirement and for their children’s education, despite criticism from their extended families for their frugality. It is not only the poor that mark meaningful differences among their moneys. In her interviews with wealthy New Yorkers for the forthcoming Uneasy Street: The Anxieties of Affluence (Princeton University Press, 2017), Rachel Sherman found her respondents repeatedly drawing monetary moral boundaries by distinguishing, for example, between what they considered a worthier earned income and inherited wealth. Inheritors, Sherman discovered, often “cleansed” their inherited money by spending it to help others rather than themselves.
But why does unmasking money’s moral and social meanings matter today? After all, in a time of growing economic inequality, shouldn’t we be focusing exclusively on quantity: the vastly different amounts of money earned by different social classes? Not really. As Jennifer Sykes, Laura Tach, Kathryn Edin, and Sarah Halpern-Meekin demonstrate in their It’s Not Like I’m Poor: How Working Families Make Ends Meet in a Post-Welfare World (University of California Press, 2015), the form and significance of various moneys are consequential. By analyzing the Earned Income Tax Credit (EITC) refund, they show how its low-income working-class recipients earmark their refunds, spending them differently from other sources of money, be it wages or welfare. Parents used the money for paying bills or debts, to increase their savings, and also to offer their children special treats or subsidize a family trip to see relatives.
Most notably, for the families involved, the tax refund represents a more dignified transfer than other forms of government assistance. It was not the amount of money that made the difference, but the form and meaning of the payment. Paying attention to such monetary distinctions can significantly impact the success of policy interventions. Consider, for instance, the consequential differences between how mothers and fathers spend household moneys. According to multiple studies, when mothers rather than fathers control family income, the money is more likely to be spent on household needs and children’s welfare. That’s why microcredit organizations and conditional cash transfer systems target their loans to poor women, not to their husbands. As Edin has suggested, we should be investigating a wide range of such “policy moneys.”
Do explorations of money’s complex meanings naïvely expunge its evils? By breaking down rigid boundaries between money and moral domains, do we risk giving a pass to monetary greed? What about money’s corrosive powers, its degradation of intimacy, politics, and more?
To be sure, we need to worry about the exploitative and corrupting uses of certain kinds of money, and we should remain deeply concerned about the unequal distribution of wealth. But unfounded arguments that predict money’s inevitable perversion of moral and social domains do not advance collective welfare. Certainly, we should be asking when, how, and which forms of money threaten social well-being, but we should also be asking the flipside of that question: When does money in its various forms enhance moral concerns and sustain social lives? Under what conditions does monetization advance justice and equality?
And what about future moneys? If Kenneth S. Rogoff’s predictions about the end of cash in his The Curse of Cash (Princeton University Press, 2016) turn out to be accurate, paper money is on its way out. Will money’s multiplicity survive in the anonymous 21st-century world of Bitcoin, Ethereum, and other cybercurrencies? Or will technology finally squash money’s social and moral lives? In Margaret Atwood’s chilling The Handmaid’s Tale, the systematic state oppression of women is first established by replacing all paper money with tokens and then forbidding women access to their Gilead Compubank accounts. Totalitarianism, speculates the novel’s protagonist, Offred, may have been facilitated by the absence of portable money.
Sociological visions are more optimistic. In his chapter in Money Talks, British scholar Nigel Dodd boldly predicts that “the era in which money was defined by the state is coming to an end.” He advances a hopeful scenario of multiple “utopian moneys,” ranging from emerging social modes of financing such as crowdfunding and peer-to-peer lending arrangements to the local moneys created by communities to foster their social ties and reduce inequality. Utopia or dystopia? As I see it, the 21st century may well bring uplifting or terrifying changes in social life, but these changes will not stem from money’s power. As soon as we recognize the inexorable social and moral differentiation of money, then it becomes clear that money will always be shaped by institutions and people’s social relations. In other words, money is not a social engine, but rather a malleable social product. That’s why we must ask which kinds of moneys we want to create, who should create them, and for whom.
Viviana A. Zelizer is the Lloyd Cotsen ’50 Professor of Sociology at Princeton University. She is the author of The Purchase of Intimacy, Pricing the Priceless Child, Economic Lives, and Morals and Markets.