From collateral to money: social meaning, security devices and the law in the depersonalization of monetary relationships

ABSTRACT

A new sociology of money has emerged over the past three decades. Unlike conventional accounts, it is attentive to the social conditions of money-making and circulation: social relationships, authority, and impersonal trust. Yet, the problem of how money is at once ‘special’ – invested with meaning, personalized, and often physically earmarked in everyday transactions – and generalized, used across social boundaries, remains unsolved. Building on the anthropology of law and the economization perspective, I bridge this gap by focusing on the processes by which money is economized through security devices, mechanisms that enable the exchange of money by sustaining a credit relationship when connections between lender and borrower are insufficient, inadequate, or altogether absent. As they make such transactions possible, security devices create new interdependencies, which become visible once the promise is broken and the guarantee that was pledged as security is repossessed. Understanding the regulation of security devices, therefore, yields new insights into the nature of money, as the legal remedies in place to deal with failure implicate monetary authorities in a politics of redress, through which what counts as collateral, under what conditions, and with what penalties, gets redefined and connected to broader financial and political processes of monetary creation.

KEYWORDS:

• Money
• law
• trust
• devices
• credit

Acknowledgements

I wish to thank Jennifer Silva, Laura Goldblatt, and Koray Caliskan for their careful reading and extensive comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The importance of connecting the cultural sociology of money to political sociology from the bottom-up is recognized by Greta Krippner’s pioneering analysis of ‘financial citizenship’ (2017). Krippner shows that consumers rely on two general strategies to access credit—through connections, that is by leveraging their social networks; and through collateral, by securing the loan so as to reduce the lender’s vulnerability in case of default. In turn, these two strategies pave the ways for different kinds of political claims on the part of borrowers—in the US context, she argues, collateral is particularly conducive to robust collective action in that it allows claim-makers to couch their demands in terms of ownership.

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Simone Polillo

Simone Polillo is Professor of Sociology at the University of Virginia. His latest book is The Ascent of Market Efficiency: Finance that Cannot be Proven (Cornell, 2020).