Seashells in the Trobriands, Fish in Prison, and Fiscal Insanities

You all know the old cliche about how after some point the money's "just a way of keeping score." Honestly, I just don't know how people who have more money than they know what to do with feel about it, but the thought has occurred to everyone that it's pretty weird that everyone from the dude buying the half million dollar house with $40,000 a year in income to the bankers funding the mortgage seems to have thought the the laws of arithmetic had been repealed.

I'm starting to think that just talking about bubbles isn't enough, and you have to start looking for the explanation of these things somewhere outside the laws of supply and demand. This weekend I picked up a copy of Bronislaw Malinowski's study of the exchange rituals of the Trobriand islanders, Argonauts of the Western Pacific. The Trobriand islanders engage in two trading rituals. One exchange is called "gimwali," a barter of useful and necessary objects. The one that Malinowski spends most of his attention on is the "kula" a ritual trade in valuables. The kula is a trade in objects of symbolic significance central to traditional Trobriand status hierarchies. The kula is governed by traditional rules requiring that kula gifts be reciprocrated with ones of equal value, but there is no way to mandate this and no hard and fast rules to determine how much any kula object is worth. Success in the kula is determined by the perception of how much you've gotten and the perception of how much you've paid.

This may all sound impossibly premodern, but the Wall Street Journal recently reported on an equally abstract system of exchange: the use of packages of mackerel as currency in prisons . (This WSJ link doesn't seem to require a subscription.) The mackerel economy apparently started with cans of mackerel, and switched to sealed pouches (ick) as the prison system moved to food items that could not be used to make shanks. The value of the mackerel as currency is that basically no one actually wants to eat it, so the packets can be hoarded more or less indefinitely, and traded for things like haircuts and cigarettes. The thing that's really weird is that the mackerel has to bought for real money in the prison commissary, but obviously can't be sold back. When the owner, umm, let's say "graduates," the mackerel just gets passed on to someone else. So basically the mackerel economy is one in which people exchange real money for prison scrip, which everybody agrees is valuable mainly because someone paid actual US cash for it somewhere along the line.

What all this means for the anthropology of financial bubbles, I'm not really sure. But I think it does mean something, because there's a point, in the California real estate market of 2006 or the mortgage backed securities market of 2007, when prices diverge so far from any value the underlying strings of shells or cans of fish may have that they feel like they're in some antimatter parallel economy. Academics take note. This is sociology heaven, and safer than running with crack dealers. As long as you stay away from the stock market.