Inconsistent values: some thoughts about money

Money is pretty strange, especially the more you really think about it.  What makes people willing to hand over things like DVDs, steaks, and churros in exchange for a piece of paper with ridiculous little pictures and numbers all over it?  Why would anyone trade a delicious arrachera taco, say, for a grubby little piece of metal with an eagle stamped into it?  Why do sane people accept these transactions as reasonable, let alone desirable?  Well, there are of course a lot of reasons behind these kinds of decisions, including everything from the political power of states to a kind of trust that exists within a community of users.  One question that always gets me thinking is this: what exactly upholds the value of money?  State power?  Trust?  The symbolic meanings  that people attach to money?  Habit?  A big global conspiracy?  All of the above!?!*

I have been working in Mexico off and on since around 2007, and during that time I have had a few interesting run-ins with this thing we call money.  Many of these experiences point to one particularly intriguing fact: the value of money is anything but stable.  Of course, we all know that.  Markets shift, currencies rise and fall.  Inflation happens.  The value of money changes all the time, right?  Yes, it does.  But what I am talking about is how money that is supposedly stable at larger levels can change value depending on specific social situations.  So values shift in the macro sense, but also in micro, very quotidian senses as well.  And the reasons for those micro fluctuations of value are many.  In short, when it comes to the actual value of money, social context matters.  A few examples:

1. Size matters: Small change is god in many places.  Not just Mexico, of course, but that was where I learned this lesson.  I got the chance to travel around in Oaxaca City and the surrounding area in 2007-2008.  There was one incident that really drove home the value of small change, right after I arrived in the city.  I took a bus out to visit one of the pueblos on the outskirts of the city with a few other friends.  The fare was cheap, about 10 pesos.  Well, I spent my small change during lunch, and when I went to get on the bus for the ride back to the city, I tried to pay with a 200 peso bill.  The driver looked at me like I was insane.  At that moment and in that situation, the bill was clearly not going to work.

In a truly pragmatic way, that note of exchange was worth almost nothing.  Not for someone who needed a ride.  Luckily, after asking around a bit one of my traveling companions had an extra 10 pesos, and I was once again back in business.  But that moment was key–a big lesson.  Once you figure out that carrying around a large bill can be about the same as having no money at all, you gotta get strategic about finding ways to get change.  There are certain restaurants and stores that deal with enough cash and larger bills that getting change isn’t too bad.  The funny thing is that during many transactions at certain stores, the person at the register would literally grumble, if not outright argue with me for using 200 peso bills (which is less than 20 dollars).  So sometimes I would give in and give up the chance for some change, and other times I had to hold out because I was running low.  But when things were going really well, I had a nice collection of small coins, which was essential to be able to go to the weekly markets and actually buy something.

Anyway, in this case, the point is that there are moments when small change might be considered more valuable (desirable, useful) than technically more valuable bills.

2. It’s all about location: Here’s another really interesting thing about value and money and Mexico: sometimes it matters where you are.  I’ll use the Baja California peninsula in this case, which is where I am working for my dissertation research.  Let me start off by saying that compared to some other parts of Mexico where I have traveled, the US dollar is actually quite readily accepted throughout this peninsula.  That’s because there has been a pretty steady flow of travelers from the US (many by car) for decades.  It’s also because of the power and influence of the US.  But the rate of exchange is a matter of debate and negotiation.  It all depends.

Yes, there are standard exchange rates.  Of course there are, and people know these rates.  In the past four or five years, the exchange rate between the dollar and the peso has hovered between about 11 to 1 and 13.5 to 1 (which is where it’s at now).  In many cases you can get a pretty decent exchange rate if you try to pay with dollars.  Pretty close to whatever the official rate happens to be.  But, in some “out of the way” places, that probably won’t happen.  Of course, that makes some sense at an intuitive level, but there’s also something going on that’s worth looking at, I think.

Using dollars is fine–especially near borders and in tourism zones.  But in other places currency from the US starts to lose its sheen a bit.  So what happens is this: when you find yourself outside of these main centers, the exchange rate gets closer and closer to about 10 to 1.  For several reasons, among them the fact that the math is a lot simpler than trying to figure out the proper change for a 13.5 to 1 exchange rate.  When I drive through some town in the middle of the peninsula and want to stop and buy something cold to drink, the person in the store isn’t necessarily going to be pleased to see a green bill with Abe Lincoln’s head on it…hence the tough exchange rate.  If I hand over 5 bucks, it’s probably going to get treated as 50 pesos.  I lose some value, but that’s the way it is.  Sure the dollar is backed by the US, but that little tienda isn’t in the US and it’s about 97 outside.  It’s a “take it or leave it” kind of situation.

So the official value and exchange rate of a dollar is one thing in theory, and another thing in a small place like Cataviña, to give another example.  If you’re out of gas there and have to stop and refill from the guys who sell from large drums on the side of the road, don’t expect to get the rate you saw back in Tijuana when you crossed the border.  You might get lucky, though.  I usually do not get stuck in that situation, since I get pesos right when I cross the border.  But I hear lots of complaints from folks about these tough exchange rates in the smaller towns along Mexico 1, which traverses the whole peninsula.  The point: sure the dollar is stable…except when it isn’t.

So the point of this example is that even with an agreed upon exchange rate between two nations (in this case the US and Mexico), the actual daily value of money shifts all around depending on where you happen to be.  So geography–social and physical I suppose–matters as well.  Sure, the value of money is backed by state power…but that power has its limits and edges where things get a little fuzzy.

3. Give me some credit: Ok, this is my last example.  This one took place in Baja as well.  During the summer of 2010 I was down here doing some prelim work for my dissertation.  I had to rent a car.  This is not cheap around here, mostly because it’s a tourism zone and prices are inflated.  Well, when I went to actually rent the car, I ran into a problem.  My credit union card from the US did not work for the transaction, since it was technically a debit card (even though many debit cards will work, this one did not.  Oops).  So the rental company would not let me actually rent a vehicle.  And here’s the kicker: I had enough money for the rental in my account.  In fact, I could have gone to an ATM and taken the money out to pay for the whole rental.  But that was not possible.

To rent the car, they needed a credit card–which means that the form of money that I happened to have was wrong for that transaction.  Therefore, in that situation, the little electronic blips of money that I had were suddenly not sufficient for what I needed to do.  It was not a matter of getting MORE money, which was amazing to me.  I will never forget that afternoon–it was an interesting lesson.  Of course, I understood why they wanted credit cards (liability, damages, etc), but what this illustrated to me is how the access or lack of access to particular forms of money can really limit the possibilities of what people can do.

The same thing happened when I tried to rent a hotel room later that day: no credit card, no deals.  So this lack of access to money in the plastic-card-with-proper-logo form effectively kept me blocked from certain kinds of possibilities.  It did not matter if I could actually walk in with the correct amount of cash…the rental agencies and hotels demanded money in very specific forms.  So this is another case in which the actual value of money is quite situational.  So what did I do?  Well, I found a hotel that took cash.  And for the car, well, that took a few days of finagling to work out (I had to get authorization to rent the car with one of my wife’s cards).  Nobody was willing to rent me a car for cash…at least not where I was.

What does this final example show?  Well, it shows that sometimes having the right technical amount of money isn’t enough.  Sometimes, if you don’t have the right amount of money in the right form, you are out of luck.  This is one way in which money can be used to keep some people in…and others out.  When I dealt with this credit card situation, I kept thinking about the vast layer of the tourism economy that was basically closed off from anyone who had not entered into the wonderful world of credit.

I’ll end with a good quote: “Money conveys meanings, and the meaning of money itself tells us a lot about the way human beings make the communities we live in” (Hart, Money in an Unequal World, 256).  What kinds of meanings about community do the above examples convey?  Lots, I’d say.  About the tensions between two neighboring countries, about class, power, geography, and new forms of economic segregation.  If nothing else, money tells us quite a lot about the instabilities and complexities of human relationships.  It’s a medium of exchange, sure, but it’s also a social medium that builds relationships–and creates boundaries.  Think about that the next time you buy a churro from a street vendor in Tijuana while waiting for your chance to slide on through one of the largest international crossings in the world.


*For really good anthropological discussions about money and value and that sort of thing, check out Keith Hart’s Money in and Unequal World and his 1986 article “Heads or Tails?  Two Sides of the Coin.”  Oh, and you might also want to check out Graeber’s book Debt: The First 5,000 Years.  Excellent stuff.


Ryan Anderson is a cultural and environmental anthropologist. His current research focuses on coastal conservation, sustainability, and development in the Californias. He also writes about politics, economics, and media. You can reach him at ryan AT savageminds dot org or @anthropologia on twitter.

14 thoughts on “Inconsistent values: some thoughts about money

  1. One question that always gets me thinking is this: what exactly upholds the value of money? State power? Trust? The symbolic meanings that people attach to money? Habit? A big global conspiracy? All of the above!?!*

    This is a fundamental question in anthropology, because the answer is the same answer to the question of “what makes a government a government” and “what gives words conventional meanings” – basically, the answer to the question of how “social facts” exist. The answer from philosophers and game theorists is based in the tricky concepts of collective intentionality or common knowledge (they’re not exactly the same), which amount to thoughts about other people’s thoughts and mental abstractions based on the same. Searle has an influential but flawed theory of collective intentionality that he has outlined in several recent books. His recent [2010] book Making the Social World has the most thorough treatment of it, and Joshua Rust’s books on Searle and his theory of social facts are also a good source. Rust also presents problems with Searle’s views that could be resolved by social scientists (or social-scientifically-inspired philosophers). Many of your observations about how money is used would make good fodder for ameliorating Searle’s theory, although there are plenty of other formal adjustments to make, I think.

    Good post, by the way!

  2. I find it really funny that Americans expect to be able to use American money in Mexico, especially in out of the way towns away from the border, when even people in border towns up north will look at you like you’re some kind of idiot for trying to use Canadian change – coins of the same name and value as their American equivalents. In Canada, American coins are treated as if they were simply the same as Canadian coins and they circulate as if they were our own coins. The reverse does not hold in the states.

  3. @Al West:

    Thanks for the comment, and for pointing me to Searle’s 2010 book–sounds like something I definitely should read (Rust too). The big question about what, exactly, upholds the value of money is endlessly fascinating. A lot of things have to come together for such a system to work, and to keep working day in and day out. If you look at it from a certain perspective, it makes almost no sense to exchange something immediately useful or desirable (like food) for little pieces of paper or bits of metal or even some numbers on a plastic card. It’s crazy, but it works anyway…and why or how it works is a massive, but important question I think. Anyway, that’s why I have been getting into reading more econs and economic anthropologists in the past few years, because there’s some pretty good stuff out there about this sort of thing. Thanks again Al.


    “I find it really funny that Americans expect to be able to use American money in Mexico, especially in out of the way towns away from the border, when even people in border towns up north will look at you like you’re some kind of idiot…”

    Exactly. It is funny because there is a definite double standard. Some of the same folks who might get irritated about a lower exchange rate in the middle of Baja would not even *think* about accepting pesos back home in the US. In fact, I can’t think of any place in the US that freely accepts pesos in a similar way that many businesses accept dollars in Mexico. Thanks for the insight about Canada–that was something I didn’t know. Interesting how the use of different money is pretty flexible and open in Mexico and Canada, no? Definitely not the case in the US…

  4. It’s crazy, but it works anyway…and why or how it works is a massive, but important question I think.

    It’s not such a massive question, and the proposed resolution is pretty elegant (or at least, the route to it is). But most of the comprehensive theories need tweaks. Searle’s treats social facts as if they’re true whether you care about them or not – you’ll apparently follow them whether you have any investment in the outcome of following the rule or not (or, as he puts it, they’re “desire-independent” reasons for action, which to my mind makes them not reasons for action at all). That doesn’t make any sense to me, and I thought at first that I’d misunderstood Searle. I hadn’t, and the claim he made about the desire-independence of rules depended on a theory of action he proposed in a book called Rationality in Action. It turns out that changing our view of rules and social facts has a huge impact on how we understand all of human action, which makes this a particularly tricky area.

    Rust takes on Searle’s claim but doesn’t propose a resolution; as far as I remember, he only shows that Searle’s proposal isn’t very naturalistic and that it fails at its task. But it’s still pointing in the right direction, especially as it is an attempt to make naturalise our understanding of society. It just needs to be put to the test of explaining why people don’t like small change or credit in certain situations, and other sorts of ordinary life challenges. My view is that rules and social facts are entirely desire-dependent (as all reasons for actions must be), but it’s complicated.

    You’re right: money is prima facie absurd, but so is government. Government has no real substance, and money is just bits of stuff (or, imaginary bits of stuff) with no inherent value. It seems like an insurmountable obstacle to explain such things. I find it instrumental to look at examples where these things fail to see that they’re not so metaphysically challenging at all. There are, of course, plenty of examples of this from both recent and ancient history.

    I’d also suggest looking at Michael Suk-Young Chwe. Good game theorist who has developed some interesting ideas about ritual (oddly) using the idea of common knowledge.

  5. The least accomodating thing any Canadian store will do with American money is count it as on par with our dollar instead of calculating the exchange rate. Since 2008 at least there’s been such a trivial difference it hardly matters. We generally feel like cashiers shouldn’t have to do the fussy math for such a miniscule difference, although bigger shops will often have registers that automatically calcuate exchange. Either way, American money is almost always accepted here, even well away from border towns, and as far as I know so are American debit cards – when again, the reverse isn’t always true for ours down there. It’s interesting though how bills are thought of as more or less the reasonably legitimate tender of another country, but coins are just taken to be essentially our coins with different pictures. A quarter is a quarter, a dime is a dime and even vending machines recognize them.

    For real though, I have had people look at me like I’m trying to rip them off and ask “what is this?” when I’ve tried to slip a Canadian coin into my payment down there. “It’s a nickel, it’s the same as yours,” doesn’t fly. I’ve even had this experience over pennies.

    Canada and Mexico should really stop being so accomodating until the US learns to reciprocate the favour.

  6. There may be a broad sense in which all behavior is desire-dependent, but it might be worth having a look at the consumer psychology literature for a more nuanced take on how desire figures in decision-making. Much of what we do is habit. Some is impulse. Some involves elaborate aesthetic or monetary risk calculations. Which applies depends not only on the action per se but the circumstances of the actor. A pair of Nike shoes, an habitual or impulse purchase for some of us, may be an inducement to murder to those in other situations. A choice of soft drink from a vending machine is not the same sort of decision as a choice of medical procedure when the person most concerned is sick and may be unconscious. I

    f you have access to back issues of Anthropological Quarterly, you may want to have a look at a piece I wrote titled “Getting to Persuasion,” whose starting point is the observation that social and cultural explanations too often assume that the rules in question are taken for granted and that people don’t have to be persuaded to follow them.

  7. Much of what we do is habit. Some is impulse.

    Indeed, but even habitual and impulsive action results from some form of calculation in the brain – and this calculation depends on some kinds of mental states that we could call “beliefs” and “desires”. “Desires” are also referred to as “pro-attitudes”, to encompass habit (a “desire” or inclination to perform an action for its own sake), obligation, etc, which are (arguably) based in deeper desires. An obligation will only sway you if it’s backed by something, whether your desire to please the person obliging you or your desire to avoid punishment. It is in this sense that all action is “desire-dependent” – caused by your beliefs and desires (which are really just the causes of your actions and ultimately chemical phenomena in your nervous system). This is your “broad sense” in which all action is desire-dependent.

    However, this is what Searle calls the “classical model” (or the Davidsonian model), and he rejects this on the grounds that humans have some kind of free will (and can therefore exhibit true weakness of the will and choose to follow rules or not – not on the basis of a calculation of beliefs and desires but a free choice). I find his argument here a little ridiculous to be honest, and it causes him to make a mistake regarding the nature of rules. It seems like an arcane point to say that all action is ultimately desire-dependent, but it has repercussions.

    I have access to Anthropological Quarterly and shall track down your article – sounds good.

  8. While I’m not generally a fan of simply borrowing theories from economics into anthropology, I think your example of higher exchange rates in more remote areas can be pretty easily explained with transaction cost theory. The further I have to travel in order to transform the bills you gave me into actually useful money, the more you’ll have to pay me in order to cover what it’s actually costing me to accept those bills.

    You mentioned the usefulness of small change – what about its opposite? A hundred pennies is generally less desirable than a dollar bill. Here in the Netherlands, this idea has even been institutionalized: every purchase in a store is rounded off to the nearest 5 cents. If the cash-register in the supermarket says you owe 5.64 Euros, the cashier will ask you for 5.65 – and won’t accept less (though I admit I’ve never actually tried it). It works the same way with rounding down.

    And (to continue what Jennifer started with the Canadian examples) if you’re collecting examples of interesting ways people behave with money and what it might mean for identities and power, here’s another one: try using Northern Irish money in England. It’s the same currency, printed with the head of the same Queen, but it looks different and says “Bank of Ireland” on it. Getting it accepted can involve a conversation with the manager. Bank of England notes in Northern Ireland, on the other hand, are no problem at all.

    Nice post!

  9. I’d add Mongolia to the odd-currency-thingy list. You can use USD in Mongolia (they call it nogoon, “green”), and in fact it’s often more acceptable than the tögrög. This is probably old data, though – I’m not sure if it’s still the case, but it was a few years ago.

    The Scottish pound has the same problem in England as the Northern Irish, although I’ve found cashiers usually accept Scottish notes after giving them a good look over.

  10. I think that what is interesting here Ryan also is your “something is going on here” observation focuses on what’s up with the money in Mexico rather than what is up with money in the US. I have never experienced such unfettered access to fungible money as I did in the US, and this goes from my experiences in banking down to how money is used on the street. You want to by a lollipop with a credit card, pay bills, get change, or get cash at 6 AM on a Sunday morning? No problem. Certainly monkeying with unfettered access, for example, putting mandatory PIN chips in your credit cards like in most of the rest of the developed world, is in someone’s best interest (e.g. banks in this case). But why doesn’t anyone do it? Why aren’t political attacks of Republicans against democrats waged through making money somehow inconvenient, like in other countries? Just look at Argentina, where for the past year some one (probably anti Christina political interests) has been disappearing all of the small change that the government can produce and the gov’t has had to legislate conditions to try to control the political fall out of the absence of change (e.g. round up goes to the customer law). Why can’t the US even get rid of the penny? Maybe someone can help me understand why barriers to using money seem to disappear in the US.

  11. Not offered as a complete answer, but it might be worth considering the role of the penny in marketing, e.g., selling something for $1.98 instead of $2.00, which may be just below the price point at which the customer gets nervous about making an impulse purchase.

    In marketing, pricing is a black, and not always successful art. In one case, famous in Japan, the suppliers of Johnny Walker Black whiskey decided to reduce the bottle price from ¥5000 to something less, thinking that a lower price would sell more whiskey. Their sales collapsed. Most, it turned out, had been for obligatory gifts, which are priced in increments of 3, 5 and 10 thousand. Lowering the price took it out of the category in which it had been a popular item.

    Also, did you know that contact lenses are an enormously profitable business because if you try to sell lenses at a price much lower than wearing glasses, easy to do because contacts are dirt cheap to manufacture, people start worrying about their safety.

  12. One more example. I think of the vegetable seller on the shopping street below our apartment complex in Japan. He or she (it’s a couple who run the business) will often wave off a few yen, turning, for example, a 1005 yen bill into 1000. The small change makes it possible to stroke the customer without incurring serious costs.

  13. Thanks for the comments everyone. I like the idea of posting all of these different examples from here and there…

    @Al West:

    “It seems like an insurmountable obstacle to explain such things. I find it instrumental to look at examples where these things fail…”

    Good idea–look at where the system of belief and habit starts to unravel. You know what came to mind for me: what happens when a bill of currency is ripped or torn or damaged in some way. Suddenly everyone starts to worry if it still counts. Hmmm.


    “Canada and Mexico should really stop being so accomodating until the US learns to reciprocate the favour.”

    Hmmm. That would be pretty interesting. My guess is that the tourists from the US would freak out!


    “The further I have to travel in order to transform the bills you gave me into actually useful money, the more you’ll have to pay me in order to cover what it’s actually costing me to accept those bills.”

    I’m sure that’s part of it…but I wonder what other reasons or motivations might be behind these kinds of choices? This is me just guessing, but I wonder if some folks just don’t accept US money in some cases to make a point, or because of principle, etc?


    “I think that what is interesting here Ryan also is your “something is going on here” observation focuses on what’s up with the money in Mexico rather than what is up with money in the US.”

    Ya, I definitely agree with you that there’s plenty of material when it comes to money in the US. My focus on Mexico here has more to do with the fact that I have been here for the past six months than anything else. You bring up some good points about money in the US…I am always wondering why we still have pennies in circulation. Maybe for the coin collectors or something…


    “Not offered as a complete answer, but it might be worth considering the role of the penny in marketing, e.g., selling something for $1.98 instead of $2.00…”

    I like that avenue. But even then, some of that pricing has more to do with the idea of pennies (or just one cent) than the actual little metal things we carry around in our pockets (or used to at least). Funny how one cent matters in some of these ways (pricing, etc) but still many people feel that pennies in and of themselves are a waste of time.

    Thanks again for all the comments everyone. If you have more examples, post away.


    The US dollar having been the world currency for some time, I don’t find this that surprising for people outside of the US to be okay with accepting that currency.

    For Canada, the US dollars has long been of greater value, so there were no risk in accepting it. Most cashiers that deal with tourists had little signs that would say something along the line of “We don’t reimburse difference of rate.” Now the two dollars are more or less at parity. If Canadian dollar ever gets much higher, commerces will probably shy away from the USD.

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