I had the honor to share a panel recently with Jean Chatzky, author and journalist. She knows about money, Jean does. That's her beat, money and finance. And it turns out she looks a little like Alice in Wonderland. How apt. How poetic. Can there be a better metaphor for the world of money now? Think of Jean as our Alice.
To encourage the metaphor, Jean came to the panel bearing Dodgsonian (Carrollian) puzzles, including this stunner. Apparently studies say we spend a credit dollar more easily than we do a debit dollar and a debit dollar more readily than a cash dollar. And this strikes at the heart of the economics paradigm. Economists rely on the idea that that all money is created equal.
Certainly, we have heard evidence of this before. Zelizer's work at Princeton on earmarking is an examination of how the categorization of value can change the value of value. And my favorite example: a couple of years, the Canadian government tried to roll up the Baby Bonus it created after WWII. It wasn't much money, about 14 dollars a month. But there was a great outcry because many households treated these 14 dollars differently from the rest of the dollars in the household budget. (Roughly: they belonged to women who had license to spend them on discretionary purchases.)
Generally, though we treat these as exceptions, as events that occur on the margin of the economics paradigm, as anomalies with which we can live, as differences that make no difference theoretically. And maybe this is right. (But what if it isn't?)
The liberating thing about value as money is that it's "colorless." It carries no meaning. When value is "at rest" in this way, it is culture free, non denominational, undeclared, so to speak. It will become cultureful when used to buy a Hummer or a Prius. But for the moment it is value free. All units of value are the same. (Until they aren't.)
I have been tracking the stories about the rise of negotiating over prices (aka haggling). This was a fixture of market economies until the installation of the fixed price. Certainly, haggling was allowed at tag sales and farmer's markets. But these too were exceptions that proved the rule. Mostly, we think that prices should be fixed, and anything else is unseemly and unduly complicated. (And we persist in thinking this even as digital technologies threaten to make fixed prices the antique of another age.)
Haggling appears to be on the upswing. Apparently, it is now possible to haggle at places like Nordstrom and Best Buy. Really. I have no personal data here because Canadians do not question prices. (We would rather pay too much than risk being identified as a "trouble maker." )
So what is going on with money? It's behaving in new ways on both sides of the buyer-seller divide, becoming more meaningful, cultureful even when in storage. Or maybe this is just noise generated temporarily by our Wonderland economy. Perhaps the conventional idea of value is perfectly safe, fixed at anchor even when driven about by high winds and water. On the other hand, if even this is in play…
Carroll, Lewis (aka Charles Dodgson). 2005. Alice's Adventures in Wonderland. Old LandMark Publishing.
Noguchi, Yuki. 2009. Haggling Picks Up Steam During Recession. NPR.org. August 10. here.
Zelizer, Viviana A. 1997. The Social Meaning of Money: Pin Money, Paychecks, Poor Relief, and Other Currencies. Princeton: Princeton University Press.