Social Relations and Money

About a decade ago, Dr Tom McDonald of the Department of Sociology was studying media use in rural China. But the deeper he got into his topic, the more he realised something bigger was afoot. Money exchanges on different kinds of social media were aligning with different kinds of social relations – WeChat for close friends and family, QQ for gaming and distant acquaintances, and Alipay for third parties and businesses. Workers were spending large amounts of their free time on social media to collect virtual money convertible to tiny amounts of real-world money.

“It became obvious that money in China was becoming social media and that you couldn’t study the media in China anymore without having an awareness of what money was and how media itself was increasingly becoming transactional,” he said.

So he set out to learn more about money from an anthropological perspective, a journey that led him to develop a Common Core course on the topic and research further into the role of money in society.

“Many economists believe that human beings are rational economic actors, that our use of money is primarily as a medium of exchange and that we act in self-interested ways. However, anthropologists look at the way people really use money out in society and it’s quite obvious that a lot of our monetary practices are deeply irrational,” he said.

Emotional need

Things like gambling and shopping sprees can be motivated by emotional need, social signalling or even just a feeling of satisfaction from the act of spending money.

Stock market bubbles are also led by emotion. “When money seems to have this capacity to generate more money, people fear they are missing out and they pile into the stock market, further increasing the value. But when confidence changes, they want to turn their capital into cold hard cash. Suddenly, you get a crash,” he said.

Contemporary understanding of money, debt and value is also changeable, he said. For example, the modern idea of debt allows creditors to earn money by charging interest, while in the past debt was seen as a straightforward exchange of favours between people. Physical money has changeable forms, from the kula shells still used for exchange in parts of Papua New Guinea to the SMS money transfers that proliferate in Haiti, where most people do not have bank accounts or identity documents. The monetary value attached to objects is also not fixed, as seen most explicitly in art auctions where auctioneers use various techniques to push the price of artworks to their highest possible value.

All these issues are explored on the course with the aim of getting students to reflect on the role of money in their lives and in society, he said. Their output has included taking photos or videos that document the use of money in their communities, such as the monetary debt implied in filial obligations and the social signalling behind the city’s obsession with luxury watches (the results are at the Hong Kong Money Museum). Students also compose essays in the form of letters outlining problems with money and future scenarios, such as writing to the World Bank about wiping out national debts and setting out the arguments on why children should receive pocket money.

Crypto questions

Dr McDonald said the topic was timely for students, not only because they will soon be making decisions about careers to pursue and how to spend their earnings, but because new forms of money are taking hold.

“Students are fascinated by cryptocurrencies and NFTs [non-fungible tokens],” he said. “In the end, it’s important that they realise money is created by human beings and that it has not always been the way it is now. All these new technologies are re-drawing the possibilities of money and the relationships involved in money. For example, many cryptocurrencies cut out the traditional banking system and often the state. Is this desirable? Is this what we want?”

Apart from the Common Core course, Dr McDonald also recently completed a research project that highlights the human relations that remain pivotal to money exchange. Looking at cross-boundary transactions among people who travel regularly in the Greater Bay Area, he found they often rely on friends and family for cross-boundary money exchange, for example, by transferring Hong Kong dollars to a friend through one account and being repaid by the friend in RMB through a different account. This is cheaper and avoids the bureaucracy of regular banking.

“Despite the promise of things like digital wallets and new virtual banks in Hong Kong, people often still fall back upon informal transactions,” he said.