CHAPTER 8

The Macro-Social Meaning of Money

FROM TERRITORIAL CURRENCIES TO GLOBAL MONEY

Eric Helleiner

VIVIANA ZELIZER’S (1994) THE SOCIAL MEANING OF MONEY was a landmark study in challenging dominant views about the sociological role of money in modern societies.1 Thinkers such as Georg Simmel and Karl Marx had argued that money was an impersonal instrument whose increasingly pervasive use in the nineteenth century was commodifying society and fostering more distant, cold, and calculating forms of social interaction. Zelizer questioned this utilitarian model of money, arguing that it failed to recognize how nonpecuniary social values transformed money in ways that highlighted money’s noneconomic functions. She developed this critique through a detailed examination of local US monetary practices such as earmarking and the creation of special purpose monies during the very time that Marx and Simmel were writing.

This chapter extends Zelizer’s central insight beyond “micro,” local monetary structures to more “macro” monetary structures at both the national and global levels. It begins by pointing out how Zelizer’s arguments intersected very well with a growing body of literature from political science that analyzed the politics of these more “macro” monetary structures. Drawing and building on that literature, it then explores some ways in which nationalist values helped to shape the emergence of modern territorial currencies in the United States and elsewhere during the nineteenth century. Turning to global monetary systems, the chapter shows briefly how more cosmopolitan, nonpecuniary values helped to inspire a failed initiative to create a world monetary union in the 1850s and 1860s. It subsequently examines in more detail the international gold standard of the late nineteenth and early twentieth centuries, offering a Zelizer-style critique of Karl Polanyi’s well-known argument about its socially disembedded nature. The final section demonstrates how the creation in the early 1940s of the gold standard’s successor, the Bretton Woods system, provides a very clear example of a global monetary system invested at the start with social meaning. Like Christine Desan (in chapter 6 of this volume), I emphasize in this analysis how money has been actively created and engineered by societies for collective purposes—purposes that, I argue, include important collective, nonpecuniary social values. In so doing, the analysis also complements David Grewal’s critical genealogy of the “mirage” that liberal economic theory projects onto society (in chapter 7 of this volume).

The Politics of National and Global Monetary Systems

At the time of its publication, Zelizer’s critique of utilitarian models of money overlapped well with the work of political scientists who had become increasingly interested in how monetary structures were shaped not just by economic logic but also by politics. While economists identify how money serves as a medium of exchange, a unit of account, and a store of value, political scientists have explored how money also serves various political functions. As they have pointed out, control over the issuing and management of money has been deeply politicized throughout history because it has enormous consequences for the distribution of power and wealth. The organization of money has thus, not surprisingly, been determined only rarely by mere concerns about its economic functions. Equally, and often much more important, has been the role of political objectives (Kirshner 2003).

While Zelizer was focused primarily on the “micro” level of local monetary practices, most of this political science literature has analyzed larger “macro” monetary structures. These include national monetary systems where political struggles within national societies have been critical in shaping the organization and management of territorial currencies. At an even more “macro” level, others have explored the politics of the evolution of international monetary systems, including regional monetary unions and global monetary orders. In these international cases, where no single political authority exists, monetary systems are shaped by politics both within and between national societies (Kirshner 2003).

Much of this political science literature analyzes the role of interest groups, political institutions, and power in influencing the construction and functioning of national and international monetary systems. In recent years, however, political scientists have also become more interested in the significance of ideas and culture in molding monetary systems (McNamara 1998; Kirshner 2000; Helleiner 2003). This “constructivist” turn in the study of the politics of money has encouraged greater engagement with the work of sociologists and anthropologists of money. Zelizer’s argument about the social meaning of money has particular resonance for this work. Although her empirical research was focused on local monetary practices, Zelizer’s core theoretical point raises the question of whether larger monetary structures are also shaped by nonpecuniary social values and thus invested with the kinds of social meaning to which she calls our attention.

This chapter addresses this question directly. Drawing and building on recent work, it suggests that the answer is a definitive yes. To develop this argument, I begin by exploring an important national-scale monetary transformation in mid-nineteenth-century America that Zelizer identifies in her book: the emergence of a more territorially homogenous and exclusive currency within the US territory. I then go on to analyze the evolution of global monetary systems in the nineteenth and first half of the twentieth centuries.

Nationalist Values and Building of Territorial Currencies

It is important to recognize the novelty of the new kind of territorially homogenous and exclusive currency that Zelizer describes emerging in the nineteenth century. Before then, no country’s monetary system had been organized on this basis of a “one country, one money” principle. In the nineteenth century, however, the US monetary system—like that of many other countries—was transformed along these “territorial” lines through what Zelizer (1994: 205) calls the “painstaking and deliberate activities of public authorities.”

These activities were wide-ranging and extensive. Foreign currencies were expelled from domestic circulation through elaborate US government initiatives throughout the 1850s. A new standardized national bank note was created by federal legislation in 1863 to replace the thousands of different kinds of private banknotes that circulated before this time. The federal government also launched much more comprehensive efforts both to stamp out counterfeiting and to produce standardized low-denomination coin that could replace widely used heterogeneous privately issued coins and tokens (Helleiner 1999, 2003).

What drove US policymakers to undertake these extensive monetary reforms? One motivation was the economic utilitarian desire to create a more orderly monetary system that could better serve the functional needs of America’s increasingly monetized economy and national-scale markets. Policymakers also hoped to strengthen the fiscal capacity of the federal state by expanding the potential for seigniorage revenue (profits derived from production of money) and by facilitating payments to and from the federal government (Helleiner 2003). In this section, however, I highlight a Zelizer-style argument about the way the construction of a territorial currency was also shaped in part by a nonpecuniary social value: in this case, nationalist sentiment.

The influence of nationalism was particularly evident among the rationales presented for the establishment of the national banknote in 1863. According to the US treasury secretary at the time, a key goal was to foster “the stimulation of the patriotism of the people which would arise from their closer touch with national affairs” (quoted in Davis 1910: 106). One contemporary US senator made a similar point, arguing that the new uniform currency would make “every stockholder, every mechanic, every laborer who holds one of these notes … interested in the Government…. If we are dependent on the United States for a currency and medium of exchange, we shall have a broader and more generous nationality” (quoted in Johnson 1995: 176, 172). Another supporter of the reform drew the link between national identities and a homogenous banknote in a slightly different way: “Every citizen … who is supplied with such a currency [the national banknote]—a currency which will be equal to gold through every foot of our territory, and everywhere of the same value, with which he can travel from Oregon to Florida and from Maine to New Mexico, would feel and realize, everytime he handled or looked at such a bill bearing the national mark, that the union of these states is verily a personal benefit and blessing to all” (quoted in Helleiner 2003: 111).

Particular attention was also given to the potential social significance of nationalist imagery that could be placed on the new national banknote. Whereas pre-1863 private banknotes had usually carried images of local settings and cultural references, the treasury secretary made sure that the first national banknotes had imagery that was “National in its character” (quoted in Helleiner 2003: 105), including nationalist symbols (flag, eagle, Capitol building) and detailed depictions of key events in the nation’s history (the signing of Declaration of Independence, Battle of Lexington, pilgrims landing, General Scott entering Mexico City, baptism of Pocahontas, surrender of General Burgoyne). These images were explicitly seen as a tool to cultivate national identities, as a comment from the chief clerk in the US Treasury at the time makes clear:

[They] would tend to teach the masses the prominent periods in our country’s history. The laboring man who should receive every Saturday night, a copy of the “Surrender of Burgoyne” for his weekly wages, would soon inquire who General Burgoyne was, and to whom he surrendered. This curiosity would be aroused and he would learn the facts from a fellow laborer or from his employer. The same would be true of other National pictures, and in time many would be taught leading incidents in our country’s history, so that they would soon be familiar to those who would never read them in books, teaching them history and imbuing them with a National feeling. (Quoted in Helleiner 2003: 106)

The influence of nationalism in shaping these monetary initiatives was no doubt heightened by the US Civil War. But it was not just in the United States that nationalist sentiment encouraged territorializing currency reforms in the nineteenth century. In many other countries, policymakers cited the symbolic value of territorial currencies and the imagery placed on them in explaining their support for reform. For example, after the unification of Italy, one Italian policymaker highlighted in 1862 how the benefits of new uniform coin for the country went well beyond the economic sector: “Money, while it circulates in the hands of all as a sign and equivalent of every kind of value, is likewise the most popular, the most constant and most universal monument that can represent the unity of the nation. It is for this reason that the emancipated peoples look with suspicion upon the old coins, which connect themselves in their thoughts with the humiliations and slaveries that they have endured, and with one voice ask for a coinage bearing the effigy of the unifying king” (quoted in Helleiner 2003: 107–8).

Policymakers in other countries also cited other ways in which they hoped new territorial currencies might serve nationalist values. Territorial currencies were seen as creating a common economic language as well as collective monetary experiences that brought citizens into a closer relationship to each other. In Canada, for example, advocates of the unification of the country’s monetary standard in the early 1870s argued that its use “would make the people of the Dominion feel more like one people” (quoted in Helleiner 2003: 112). The removal of foreign coin was also associated with the bolstering of national sovereignty; in the nationalist age, its circulation domestically had come to be seen as “humiliating” for the nation or something that “hurt national pride” (Reis 1996: 161; Helleiner 2003: 137). Some analysts also argued that territorial currencies would help foster a deeper sense of trust and even spiritual unity among citizens of the nation (Helleiner 1998).

It is clear, then, that the construction of territorial currencies was driven in part by nationalist sentiment. In this way, we can see how Zelizer’s critique of utilitarian models of money is relevant not just at the micro level she analyzed but also at this more macro (national) level where “territorial” currencies were invested by their creators with nationalist meaning. Far from being an impersonal instrument that was fostering more distant, cold, and calculating forms of social interaction, these national monetary structures were seen by many in the nineteenth century as a tool for strengthening of sociocultural and emotional ties of citizens to each other in what Benedict Anderson (1983) called “imagined community” of the nation.

From World Monetary Union to the International Gold Standard

Zelizer’s argument can also be extended to the international level during this same historical era. While the United States was consolidating a territorial currency during the 1850s and 1860s, an international political movement emerged to create a “world monetary union.” The supporters of this movement, who included prominent figures such as Walter Bagehot, John Stuart Mill, and Michel Chevalier, called for all countries to adopt the gold standard with a common unit of account and to create national gold coins with identical gold content that could circulate in all member countries as legal tender. The movement succeeded in attracting enough political attention that a major international conference was held in 1867 to discuss the proposal, which included delegates from all European countries, the United States, Russia, and the Ottoman Empire. Other countries also signaled their interest in the initiative, including China, Japan, Canada, and many Latin American countries (Perlman 1993; Helleiner 2003: 128–33).

Some of the backing for this international reform was motivated by the utilitarian goal of reducing transaction costs for international commerce and travel in an era when both were expanding rapidly. But many supporters were also inspired by the idea that a world monetary union could foster greater social understanding, international peace, and even cosmopolitan identities among people across the world. For example, US supporters of the proposal argued: “Next to a universal language, everywhere spoken and everywhere understood, it will as eminently conduce to general peace and general good understanding, among nations, as any other measure which can be devised” (quoted in Helleiner 2003: 130). Bagehot went further in making the case for a world monetary union (which he hoped would also include common imagery on money): “All Englishmen would lose some of the exceptional national feeling which retards their progress, which makes them look at others as strange, which makes them think us singular too. If civilization could make all men of one money, it would do much to make them think they were of one blood” (quoted in Perlman 1993: 318).

The proposal ultimately failed in the face of opposition in a number of countries. Interestingly, opponents also invoked the broader social meaning of money, highlighting concerns about the impact of the world monetary union on national identities. For example, in Britain, the idea that the pound’s value would need to be lowered slightly under the proposal sparked resistance on these grounds. One British opponent called attention to the “spirit of nationality” that “surrounds the pound sterling” because it was a “a long-existing standard of value, recognized by everybody.” As he put it, “If it be considered what the power of the pound and of the penny is on the public mind … its importance as a representative of value will be recognized…. Our language, our literature, our proverbs, are permeated with these associations…. All this shows the extent to which this idea of the pound and the penny has become an almost universal presence—a sort of national inheritance…. The pound and the penny are scriptural words, associated with our earliest and most irradicable thoughts” (quoted in Helleiner 2003: 132).

Despite the failure of the world monetary union initiative, the utilitarian goal of reducing international transaction costs was partially realized after the 1860s, as many governments chose to fix the value of their countries’ currencies to the common monetary standard of gold. Indeed, by 1914, most of the world’s independent countries and colonized regions had joined the gold standard. The emergence of this de facto world monetary standard and its sociological consequences have often been interpreted through the kind of theoretical lens that Zelizer critiques.

For example, as early as 1859, Marx ([1859] 1904: 208) himself had seen gold as a kind of emerging “world-money” whose growing global use would encourage commodification on a worldwide scale. As he put it, “As the identical gold that lands in England in the form of American eagles, turns there into sovereigns and three days later circulates in Paris in the form of Napoleons, only to emerge in Vienna a few weeks later as so many ducats retaining all the while the same value, it becomes clear to the commodity owners that nationality ‘is but the guinea’s stamp.’ The lofty idea which he conceives of the entire world is that of a market, the world market” (italics in original).

Karl Polanyi’s 1944 work The Great Transformation develops the best-known interpretation of the international gold standard along these lines. For Polanyi, the international gold standard was a key pillar in the nineteenth-century liberal initiative to build “a self-regulating market on a world scale” (Polanyi [1944] 1957: 138). In addition to fostering international commerce, it promised a monetary order in which the management of money—both domestically and internationally—was left to the market. As he put it, “With the international gold standard the most ambitious market scheme of all was put into effect, implying absolute independence of markets from national authorities. World trade now meant organization of life on the planet under a self-regulating market, comprising labor, land, and money, with the gold standard as the guardian of this gargantuan automaton. Nations and peoples were mere puppets in a show utterly beyond their control” (ibid.: 217). From Polanyi’s perspective, the overall nineteenth-century liberal project was a “stark utopia” whose advocates sought to build a socially disembedded form of economic life that would end up “annihilating the human and natural substance of society” (ibid.: 3). He saw the international gold standard in this light, arguing that society—including private businesses—could not cope with the economic instability that its automaticity generated. As he put it, a completely monetized community could not stand the “devastating effects as to its welfare, whether in terms of production, income, or employment” or “the ruinous effects of abrupt changes in the price level necessitated by the maintenance of stable exchanges” (ibid.: 198–99).

Polanyi argued that the social dislocations generated by the liberal project provoked a spontaneous social backlash—or “countermovement”—designed to protect society from self-regulating markets in the late nineteenth and early twentieth centuries. In the monetary realm, he argued that this took the form of the creation of modern central banking and national “token” forms of money—such as banknotes and token coin—that could be actively managed. In his words, central banks “reduced the automatism of the gold standard to a mere pretense” (Polanyi [1944] 1957: 195) through their active monetary management and their use of reserves and short-term foreign loans to cushion against balance-of-payments deficits. The final collapse of nineteenth-century market civilization then came in the 1930s after national governments around the world abandoned the gold standard altogether.

Nationalism and the Creation of the Gold Standard

Polanyi’s analysis of the international gold standard was provocative, and it echoed the arguments of Marx and Simmel about money’s role in commodifying society. But it also has some important weaknesses, including the fact that it overlooks the degree to which nonpecuniary social values helped to shape the creation of the gold standard. To be sure, Polanyi was correct in arguing that many liberals backed the international gold standard because of its utilitarian role in supporting the spread of self-regulating markets on a worldwide scale. But his analysis neglected the important role of nationalism in generating the gold standard, a role that meant this monetary order was less socially disembedded than he suggested.

Nationalist sentiments helped shaped the gold standard’s emergence in a number of ways. To begin with, in poorer countries and emerging powers such as Japan, decisions to join the gold standard in the late nineteenth century were often driven at least in part by considerations of national prestige and power. Gold was seen as the currency of great powers and of civilization, and its adoption symbolized national achievement. In these contexts, governments had no intention of following the liberal “rules of the game” of delegating the management of money to the market after joining the gold standard. Instead, their monetary authorities pursued more activist and unorthodox activities from the very start, such as intervening in currency markets, sterilizing gold inflows, and engaging in deliberate reserve accumulation. These activities emerged not as a kind of spontaneous reaction against their experiences on the gold standard, as Polanyi’s analysis suggested, but rather as part of the thinking underlying their initial embrace of this monetary order (Bryan 2010).

The gold standard also served nation-building goals, because its adoption often went hand-in-hand with a considerable enhancement—rather than diminution—of the state’s control of the domestic monetary system. This requires some explanation, since it challenges Polanyi’s analysis directly. In Polanyi’s account, the gold standard was presented as a novel “system of commodity money” in which the value and amount of money was regulated entirely by the market ([1944] 1957: 193). He contrasts this with systems of “token” money in which currency is created “outside the market,” such as the issuing of token coin or banknotes by public authorities (ibid.: 131). In most countries, however, the adoption of the gold standard signaled a dramatic shift away from dependence on commodity forms of money because it replaced bimetallic monetary systems that had been dominated by “full-weight” silver and gold coins whose value was equivalent to their intrinsic commodity value.

Under a bimetallic system, the value and quantity of these coins was subject to trends in the relative market prices of silver and gold. Sudden changes in market prices often generated enormous shortages of coin that were extremely socially disruptive, particularly in the nineteenth century, as economic life became increasingly monetized. The introduction of the monometallic gold standard eliminated this problem overnight by replacing full-bodied silver coins with a token or “fiduciary” coinage whose face value was no longer linked to its metallic content and whose supply was tightly managed by public authorities. In most countries on the gold standard, fiduciary coins dominated the coinage, and few gold coins were actually used. In this way, and contra Polanyi, the creation of the gold standard was associated with a considerable increase in state intervention in the domestic monetary system in ways that reduced the vulnerability of the population to commodity forms of money (Helleiner 2003).

It is important to recognize that this fact often provided a key motivation for policymakers to introduce the gold standard in the nineteenth century. In many instances, the trigger for this monetary reform was a sudden shortage of low denomination silver coin that generated widespread popular protests, particularly given the increasingly pervasive role of money in economic life. Creating a monometallic gold standard with a stable supply of fiduciary coinage provided a way to respond to these protests, particularly those of the poor, who were now seen as citizens in the nationalist age. In these contexts, the establishment of the gold standard with a fiduciary coinage was—once again, contra Polanyi—a protective anti-market reform that helped to consolidate the state’s ability to serve its citizenry (Helleiner 2003: chap. 3).

The new state-managed fiduciary coinage systems of the gold standard also generated the nationalist benefit of discouraging foreign coins from domestic circulation. Under bimetallic monetary systems, foreign coins were widely accepted and used within countries because they often supplemented an inadequate supply of local coin and because the value of all coinage was judged more by its intrinsic metallic content than its issuer. But this practice became much less widespread as fiduciary coins were introduced because shortages of local coin became much less common and the value of coin became dependent on the trustworthiness of the issuer or the prospect of redeeming it for gold with that issuer. For nationalists, this was a development to be applauded.

The establishment of the gold standard was also often associated with initiatives to bring the issuance of banknotes—another form of token money—under greater state control. As part of their effort to establish and maintain gold convertibility, governments often sought to regulate the supply of banknotes more tightly, including by assigning note-issuing monopolies to central banks. By the time of the Brussels (1920) and Genoa (1922) international economic conferences, the link between the gold standard and domestic note issue monopolies was even formalized in resolutions that called for central banks with monopoly note issues to be created in all countries as part of the post–World War I initiative to restore the international gold standard (Helleiner 2003: ch.7).

For liberals (including those at the Brussels and Genoa conferences), banknote monopolies enabled central banks to ensure that the supply of paper money simulated the automatic macroeconomic adjustments of the gold standard. But for many nationalists in the nineteenth and early twentieth centuries, the establishment of a central bank with a monopoly note issue served nation-building purposes both in a symbolic sense (including through the imagery placed on banknotes) and as a powerful monetary instrument to serve domestic needs and help to protect the nation from external shocks by centralizing and managing the country’s gold reserves, intervening in markets, and attracting foreign funds (Helleiner 2003: chaps. 4, 7).

It is important to recognize that Polanyi provides some very insightful analysis of the nationalist role of central banks in the late nineteenth and early twentieth centuries. But he associates this role entirely with the countermovement against the gold standard. In fact, it often went hand-in-hand with the creation of the gold standard itself and was part of its appeal. As Marcello De Cecco (1984: ii) puts it, the adoption of the gold standard “was in most cases a giant step towards dirigisme.”

In sum, Polanyi accepts too uncritically the liberal interpretation of the international gold standard, which suggests that this international monetary structure was created primarily to serve the utilitarian goals of fostering international commerce and the spread of self-regulating markets. These goals did indeed play some role in generating support for the gold standard, but they were not the whole story. Others backed the adoption of this monetary regime for quite different reasons informed by broader nationalist values. This fact helps to explain why the spread of the gold standard took place in an age of heightened nationalism. It also provides an important reminder for followers of Marx that nationality was more significant than just “the guinea’s stamp” in the international monetary system.

The Initial Social Meaning of Bretton Woods

If the social meaning of the international gold standard has sometimes been obscured, the same cannot be said of its successor, the Bretton Woods system. This monetary regime provides a clearer example of an international monetary system shaped by nonpecuniary social values and invested with social meaning at the start. One key reason is that it had a clear “founding moment” at the famous Bretton Woods Conference in 1944, in contrast to the international gold standard that emerged in a rather incremental and unplanned manner in response to the individual decisions of national governments throughout the late nineteenth and early twentieth centuries. Equally important is the fact that the Bretton Woods architects expressed very explicitly their goal of building an international monetary order that would serve broader social purposes.

This goal was outlined very early on by the lead US negotiator during the Bretton Woods negotiations, Harry Dexter White, in one of his initial drafts of the International Bank for Reconstruction and Development (IBRD) in early 1942. Writing soon after the United States had entered World War II, White suggested that members of the new bank would be required to subscribe publicly to “a bill of rights of the peoples of the United Nations” that set forth “the ideal of freedom for which most of the peoples are fighting the aggressor nations and hope they will be able to attain and believe they are defending.” His justification was as follows: “The inclusion of that provision would make clear to the peoples everywhere that these new instrumentalities which are being developed go far beyond usual commercial considerations and considerations of economic self-interest. They would be evidence of the beginning of a truly new order in the realm where it has hitherto been most lacking—international finance” (quoted in Helleiner 2014: 121).

White’s specific suggested provision did not appear in IBRD’s final charter, but the Bretton Woods agreements of 1944 were certainly designed to support the broad values that the United Nations were fighting for during the war. The formal name of the Bretton Woods Conference—which began in New Hampshire on July 1, 1944, very shortly after the Allied invasion of Normandy—was the “United Nations Monetary and Financial Conference,” and one of its functions was inspire the Allies to victory. As US Treasury Secretary Henry Morgenthau told the delegates at the very end of the conference, “We must offer this [the Bretton Woods agreements] to the men in the armies and on the sea and in the air. We must offer them some hope that there is something to look forward to a little better than in the past and I like to think that Bretton Woods is this hope in somewhat concrete form” (US State Department 1948: 1126).

The values that the United Nations were fighting for drew on US President Franklin Roosevelt’s “four freedoms” speech of early 1941 and the Atlantic Charter of August of that year. The Bretton Woods architects focused particularly on Roosevelt’s idea of creating a postwar world in which there was “freedom from want … everywhere in the world” (quoted in Helleiner 2014: 120). The goal reflected Roosevelt’s vision of internationalizing the New Deal’s commitment to provide economic security to individuals by raising living standards worldwide as a key foundation for postwar global peace (Borgwardt 2005). In his opening speech at Bretton Woods, Morgenthau reiterated this goal: “Prosperity, like peace, is indivisible. We cannot afford to have it scattered here or there among the fortunate or to enjoy it at the expense of others. Poverty, wherever it exists, is menacing to us all and undermines the well-being of each of us” (US State Department 1948: 81).

To realize this ambitious vision, the Bretton Woods architects developed an international monetary order informed by what John Ruggie (1982) has famously described as the compromise of “embedded liberalism.” The Bretton Woods agreements combined support for liberal multilateral principles with a commitment to new interventionist economic practices that had become influential across the world during the 1930s. In specific terms, all member governments would be required to commit to stable exchange rates and current account convertibility, but they would also be allowed to adjust exchange rate pegs and employ capital controls in order to protect their autonomy to pursue activist domestic policies. Policy autonomy would also be protected by the fact that they could take short-term loans from a new international public institution, the International Monetary Fund, to cover balance-of-payments deficits.

In developing the phrase “embedded liberalism”, Ruggie draws explicitly on Polanyi’s view that the nineteenth-century liberal order was socially “disembedded.” He argues that the Bretton Woods architects gave greater priority than had nineteenth-century liberals to social objectives such as full employment and the provision of social security that had become more prominent politically since the 1930s. For the reasons noted in the previous section, Polanyi’s view that the international gold standard was socially disembedded was overstated. But Ruggie’s phrase remains useful in identifying the contrast between nineteenth-century liberalism and the views of Bretton Woods architects.

It is important to recognize that the social purpose of “embedded liberalism” was initially supportive of activist policies aimed not just full employment and social security goals in industrialized countries but also rapid economic development and industrialization in developing countries. It was hoped that the latter would benefit from the specific provisions protecting policy autonomy noted above as well as from the creation of the IBRD, whose mandate included the mobilization of long-term lending for development purposes. Morgenthau put particular emphasis on the role of Bretton Woods in raising living standards in developing countries. As he put it a high-profile article in Foreign Affairs in early 1945, “The Bretton Woods approach is based on the realization that it is to the economic and political advantage of countries such as India and China, and also of countries such as England and the United States, that the industrialization and betterment of living conditions in the former be achieved with the aid and encouragement of the latter” (Morgenthau 1945: 190).

To reinforce this social purpose, US policymakers worked energetically around the time of Bretton Woods to help many developing country governments in Latin America and elsewhere to reform their domestic monetary systems to support state-l ed development goals. Reforms included de-dollarization; the creation of new national currencies; the establishment of central banks with powerful mandates to pursue activist monetary policies and support development lending; and legislation enabling the use of capital controls and adjustable exchange rates. These US-supported reforms represented one further way in which money was given new social meaning in the context of the Bretton Woods framework, although the US enthusiasm for state-led development policies quickly waned during the early postwar years (Helleiner 2014).

Conclusion

Zelizer’s 1994 book has played a very significant role in encouraging scholars to question conventional approaches to study of the sociology of modern money. It has inspired new research on the social meaning of money that explores how various kinds of social values can shape monetary practices and structures. This chapter has suggested that this new research should not be restricted in its focus just to the local forms of money that Zelizer herself examined. Equally important is the task of examining how national and even global monetary structures are influenced by these kinds of social values.

Here, I have suggested some ways in which this task can be carried out with a focus on the nineteenth- and early-twentieth-century period that attracted Zelizer’s attention. But the task of analyzing this “macro” social meaning of money is also relevant to the contemporary world. Researchers certainly have much raw material to work with in this era, when money and its management are generating so much controversy. Many of the controversies have arisen in the wake of the massive 2008 global financial crisis that generated many calls for a new “Bretton Woods” at the global level (Helleiner 2010). That emergency also led directly to the ongoing eurozone crisis that has revealed how the new European common currency is deeply infused with various kinds of social meaning, ranging from European identities to ideological views about money’s management. These and other contemporary contexts reveal not just money’s heightened influence in the early twenty-first century but also the enduring capacity of a range of social values to shape its future.

Note

1.  I am grateful to the Social Sciences and Humanities Research Council of Canada for its research support and to Nina Bandelj, Frederick Wherry, and Viviana Zelizer for their helpful comments.

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