Money is as money does: It is more than just an economic resource

Prithwiraj Mukherjee February 16, 2017 4 min

Story Highlights

  • Even in modern societies like ours, money has meanings well beyond the obvious
  • Money assumes different meanings in different contexts, associating itself with different emotions, feelings and connotations
  • One's perception of money is context dependent, and how it was earned and how it is spent can lead to very different perceptions of it

November 8, 2016 will go down as a landmark in Indian history, as the day on which about 86% of our currency, in high-value notes of Rs 1,000 and Rs 500, was invalidated overnight. This demonetisation decision led to confusion, serpentine queues at banks and ATMs, polarising debates, hope of flushing black money out of the system and much more.

Since the demonetisation, discussions on digital disruption, online wallets and contentious issues of privacy and cybersecurity have dominated discussions in both mainstream and social media. But could there be more than just economics and technology involved in the demonetisation discourse?

Money assumes different meanings in different contexts, associating itself with different emotions, feelings and connotations

Let us explore the various meanings of money in this three-part mini-series.

Humankind’s relationship with money is long and colourful. At face value, money is an instrument that facilitates transactions more efficiently than the barter system. Ancient humans soon discovered that there was a limit to the amount of milk one could exchange for foodgrains and vice versa, and a medium that could be exchanged at any time for anything that was required. Thus, money was designed to be something that was formless — both transient if the owner chose to spend it, or permanent if she chose to store it. Unlike goods that have symbolic meaning, one may expect money to have no such connotations. Except, this is not really true.

In her iconic essay on the meanings of money, sociologist Viviana Zelizer cites the example of a small community in Rossell Island in the Pacific Ocean — they have separate lower denomination coins for women and higher denominations for men, a concept so strange that it is likely to outrage some of us.

Think about the money a woman may have carefully stored under her pillow. Since the demonetisation, it may have been converted into distant, cold cash in the bank — possibly profane and replaceable  

Surprisingly, even in modern societies like ours, money has meanings well beyond the obvious. Think about your childhood — of times you may have picked up some change lying around in the house and sneaked out for a furtive chaat or a precious wrestling postcard.

The meaning of that money, and your relationship with it, may be very different from the salary that you now draw, the lottery you may have won, the loan you may have taken for your new home, or simply the money you may have set aside for a rainy day. The money you spend at a theatre or a sports arena assumes very different connotations from that which you spend on your college fees or hospital bills. Money thus assumes different meanings in different contexts, associating itself with different emotions, feelings and connotations.

The meaning of that money, and your relationship with it, may be very different from the salary that you now draw, the loan you may have taken for your new home, or simply the money you may have set aside for a rainy day  

Can money have religious or sacred connotations? Think about the Hindu goddess Lakshmi, or the Protestant’s ‘almighty dollar’. On the flipside, we also see negative connotations assigned to ill-gotten money, the idea of ‘filthy lucre’ or virtues of poverty, and hence the virtues of philanthropy associated with many religions.

A study by Russell Belk further explores the sacred connotations of money (sacredness, as opposed to profaneness, has connotations beyond religion, and can extend to gifts, relationships, souvenirs and more. Profane commodities, on the other hand, are those that are easily replaceable. Thus, a new teddy bear may be profane while one that you have grown to love could be sacred). In short, your perception of money is context dependent, and how it was earned and how it is spent can lead to very different perceptions of it.

Can money have religious or sacred connotations? On the flipside, we also see negative connotations assigned to ill-gotten money, the idea of ‘filthy lucre’ or virtues of poverty, and hence the virtues of philanthropy associated with many religions  

So what does all this have to do with demonetisation? Think about the money that a woman may have carefully stored under her pillow. Is it just an economic resource to her? Or is it a sacred entity, a secret companion, a friend or more? Since the demonetisation, it may have been converted into distant, cold cash in the bank — possibly profane and replaceable. Could this have an impact on her relationship with money? Could her choices be different because of these? These are some questions that can only be understood once we have entered a new steady state post-demonetisation.

In next week’s column, we will discuss a concept called ‘pain of payment’, a phenomenon where the psychological pain of parting with hard cash is more than using plastic cards, where the money is debited from a distant source, and discuss its implications on consumers’ choices and behaviour.

This is Part 1 of a three-part mini-series on money that Pritwiraj Mukherjee will be writing over the next few weeks.

This column is intended to showcase interesting academic research in marketing. The technically oriented reader is encouraged to read the original research articles cited in the column.

Prithwiraj Mukherjee is Assistant Professor of Marketing, IIM Bangalore. Views are personal.

Lead visual: Nikhil Raj