“Your bank balance is not the only indicator of creditworthiness”
You are an ethnologist and conduct research in the field of economic anthropology. What exactly is the subject of your investigations?
Silke Meyer: In anthropology we study the general question as to how people become members of groups, in other words the ways in which they socialise. One of the answers is that people relate to each other through a system of give-and-take. So in my field we look at how we consume, spend money, save money or invest money and what social function each of these activities has.
How does money structure social relationships?
Meyer: In addition to economic capital, such as money and other assets, there's what is called cultural capital. This can involve certain skills, like playing the violin, a university degree or owning status symbols like an expensive painting. And then there is social capital, which enables people to become members of various social groups. The way these various capitals can be interspersed says a great deal about our social background. For instance, people like to say that you cannot buy friendship. But in actual fact we know that friendship is bought almost everywhere, be it in the playground or at the golf club. Hence, social capital can be converted into economic capital, but it is important not to say so openly, and to conceal the economic aspect. These complex connections and rules are among the things we study.
Are you saying that our monetary habits are based on more than just a material cost-benefit approach?
Meyer: If you look at the middle class you notice conventions about the things we may spend our money on – including more money than we actually have – and the things that are frowned upon. We have different ways of managing our budgets, which is also a very topical issue in times of rising prices. In certain areas you are free to spend a little more, other areas are socially taboo. But this is not the same for everyone. Depending on where you are on the social scale, different rules apply. Making debts to be able to buy the latest smartphone is common practice in some circles – because it is a consumer item to which a lot of kudos is attached. In other circles it is frowned upon because people believe that you have to have the money first before you can spend it on luxury items. From a scientific point of view, we are interested in the point at which this conspicuous consumption starts. It involves great social differences.
One doesn't talk about money, or so the saying goes, where does that come from?
Meyer: Yet another social convention, but in my opinion one that no longer applies in today’s society. This observation ties in with my findings from debt research. We talk more openly about debt today than we did 20 or 30 years ago, when it carried a stigma comparable to unemployment. Both can have different external causes, rooted more in social and structural backgrounds than in people's character.
How does being in debt affect people?
Meyer: I have conducted many interviews with people in debt. I am struck by the fact that their personal stories are often dressed up in narrative patterns that invite interpretations and social positioning. The story can be about the underdog, who has to assert himself against the big banks, or revisionary stories, where people experience their debt crisis as positive because it enabled them to change their perspective on what is essential in life. This social positioning is important for those affected, who often feel marginalised. The narrative allows them to view the evolution of their identity in a positive way.
I have found that such narratives work along the lines of the insolvency code, which provides a template of how to get out of debt not only financially, but also morally. It is achieved by acting responsibly, showing initiative and being thrifty (neoliberal virtues) – but without the thriftiness overshadowing everything. It is important for people in debt to be able to afford something even though they have little money. They don't want to be caught in an economic trap. That is the reason why there was so much over-indebtedness in the 1990s and 2000s. The dominant mindset then favoured effectiveness of action, identifying yourself as an active consumer. People did not want to be excluded from the realm of consumption that defines societal rank.
The economisation of society promised freedom and self-fulfilment. But haven’t we actually become more dependent?
Meyer: The financial system's evolution since the 1990s often promised freedom but actually increased dependencies in a negative way. Consumer loans were advertised as offering infinite possibilities for everyone, and they were granted easily and quickly. Digitisation has opened up new avenues that have not been beneficial for everybody. Anthropological theory tells us that exchanges require mutual recognition. In banking, this involves rating someone’s creditworthiness, which is not only defined by the account balance, but also has a social dimension. In some cases, creditworthiness has surprisingly little to do with how much money someone has.
You have studied credit practices in the USA and Germany, two cultures that differ greatly in their approach to money. What are your findings?
Meyer: From a social science perspective, the aspect of residual debt discharge is very interesting. German insolvency law pursues an educational intention and defines how one must fulfil moral obligations in order to become “bona fide” again - as it says in the law. If one displays bone-fide conduct for a certain period, one's residual debt is forgiven. In Germany, the period used to be seven years, now it has been reduced to four. In the USA, however, it is only two months, hence very much shorter. American insolvency law uses the term “fresh start”, which reveals a much less moralising approach. This may be explained by the fact that, being an immigrant society, the USA has always attached much less stigma to taking up credit throughout its history. It is entirely normal for someone who moves to a new country and builds a life there to borrow money. In the US, that situation hasn’t changed. It is very common there for a young person to graduate from university with a student loan of 20,000 to 30,000 dollars that needs to be repaid. In Austria and Germany, being indebted is much more stigmatised. That goes to show to what extent debt behaviour is subject to cultural norms.
Economic and social action cannot be separated. But it is also said that money erodes relationships. How does that tally?
Meyer: Both things are right, and they occur simultaneously. We live in a thoroughly economised world in which we use money every day. At the same time, there is a lot of sociality in this money trade. The remittances sent by migrants to their places of origin, which we investigated in an FWF-funded project, are a good example. These money transfers contain expectations, hopes, wishes or even fears and are thus highly charged emotionally for both the sender and the receiver. One can see how the money transfers consolidate social relations and structure the transnational space. In the process, money can fulfil different functions, such as compensating for absence, ensuring security of supply or taking social control. Ultimately, the process is also a negotiation of power relationships.
When dealing with money, social relationships are always part of the picture. It becomes noticeable even in small examples such as giving a tip or gifts of money. Hence, there are certain social conventions as to how money is given away “properly”, and what is “proper” also depends on what generation someone belongs to. That says a lot about society.
Ever since the global financial crisis of 2008 and now during the coronavirus pandemic, the issue of proper economic management confronts us almost daily, both politically and in our personal lives. What influence does this have on the way we deal with money?
Meyer: It was certainly a novel experience for us as a society when at the beginning of the coronavirus crisis states gave priority to health concerns under the motto of: “whatever the cost”. We cannot yet say what the future impact will be, but this strong message from the state was very significant. Up to that point, the trend had gone towards personal responsibility, privatisation and neoliberalisation. For decades, states had greatly reduced their sphere of influence. Right now, the issue of inflation is preoccupying us in everyday life; in this context, the topic is becoming even more urgent, because with rising energy and food costs, money is becoming scarce in many households. The climate crisis is also linked to money. As with the pandemic, all will depend on what we can and want to afford as a society.
Economic policy geared to growth is reaching its limits. Do we have to think about new economic models in order to remain sustainable?
Meyer: Historically speaking, there are moments of great change in the history of money – as described by the Austro-Hungarian economic sociologist Karl Polanyi in his book “The Great Transformation” in 1944. One such transformation happens when commonly-owned property becomes private property. When, for instance, meadows and forests are no longer accessible to all, with the result that the population is gradually deprived of the resources it needs to make a living. Polyani predicted inter alia that we will get to the point where we will no longer have enough resources to go round for everyone. That is what we are talking about at the moment. In the face of water, energy or food shortages, we will not be able to succeed without new models. Maybe we can learn from the past and focus more on the community economy. There are already working examples of this, such as the municipalities that have established energy-autarchy or sharing economies where one shares resources rather than owning them. But this needs solid structures that only a state with a strong position in society can reshape. Whether this transformation can succeed is a question only the future can answer.
Silke Meyer is Professor of European Ethnology at the University of Innsbruck. Her research focuses on economic anthropology and the use of money and debt, migration and remittances from migrants to their places of origin, and narrative research. In her professorial qualification thesis she dealt with narratives of debt in contemporary society.
Panel discussion: We don't talk about money - oh yes, we do!
Silke Meyer will be speaking at FWF’s “Am Puls” science talks in Innsbruck on 5 October 2022. In a conversation with Head of Private Banking at Tiroler Sparkasse Désirée-Marie Holjevac, she will be discussing money, fairness, and how these play out in real life. The event is being held in cooperation with the University of Innsbruck and the daily newspaper Tiroler Tageszeitung. Please note that this event is in German.
More informaton and registration: fwf.ac.at/ampuls
