Because money makes the world go 'round

Bill Maurer, PhD, IMTFI Director, Dean, UCI School of Social Sciences explains money's many meanings, particularly amid the COVID-19 pandemic and times of crisis, in this piece for the Consortium of Social Science Associations (COSSA).

I often get asked questions like, “What is an anthropologist like you doing studying money? I thought that was the domain of economists!” The archaeological and ethnographic record is full of objects, texts, and records of promises humans have used for millennia to mark transactions with one another and figure value. It’s true that I enjoy working with and thinking about those objects, and among my favorite places are the money galleries in museums around the world and at the regional branches of the U.S. Federal Reserve. But the anthropology of money is more than an archive of the arcane. Understanding practices like bridewealth, involving objects like the tevau of the Santa Cruz Islands, can shed light on how contemporary money is far more than a neutral medium of exchange. This matters for product design, financial literacy programming, and macroeconomic policy, too.

Indeed, now that the world is in a global pandemic caused by the rapid spread of the COVID-19 virus, what people do with money and its technologies has acquired a new kind of significance. Although the virus apparently does not survive for long on fibrous materials like cloth and paper, reports have surged of Chinese and other officials ordering the disinfecting of banknotes to prevent its spread. The fintech industry conference organization Money 2020, promoting its (almost certainly to be cancelled) next event, proclaimed in an email that the pandemic would usher in the end of cash and the era of digital payments—despite the fact that most in-person digital payments (at your local take-out restaurant now, for example) rely on plastic and metal cards and point of sale devices, touched by many hands, on which the virus can survive for several hours. And in Kenya, the authorities are recommending all Kenyans use mobile phones to pay—about which, more below.

Economic uncertainty is leading many to horde cash, which may intensify a trend that had already been in motion given historically low interest rates—now even lower—and shifting behaviors related to digital payment. The Federal Reserve reports a steady increase in cash demand, despite a decline in cash transactions. Since the rich are putting their money in things like money market funds and CDs, however, this cannot be due to their behavior. With all the ways to pay via laptop, mobile phone or smart watch, why should the Fed need to supply banks with more and more banknotes? We found a clue in some recent research on young people’s use of budgeting apps like Mint. We set out to understand what financial literacy lessons—if any—such apps taught their users. But along the way we discovered that some of our subjects were withdrawing cash from the ATM on payday and stashing it away, because services like Venmo had made it so easy to spend the money in their bank account. Whereas, for me, the money in the bank is my store of value, for them, Venmo had turned bank money into current-use funds. Storing cash was a means of controlling spending. Cash is not dead or dying—its uses are just changing.


Read the full piece, courtesy of COSSA: https://www.whysocialscience.com/blog/2020/3/24/because-money-makes-the-world-go-round

Why Social Science? is a project of the Consortium of Social Science Associations, a 501(c)(6) non-profit organization based in Washington, DC. Our goal is to share the benefits and contributions of federally-funded social and behavioral science research with the public and encourage its widespread use for tackling challenges of national importance. To learn more about COSSA visit www.cossa.org. #whysocialscience

Virtual Currencies and the State - B. Maurer, Money at the Zero Lower Bound

Bill Maurer in Just Money's Roundtable 2: Virtual Currencies and the State

I picked up a copy of the Financial Times in the Munich airport on my way home from keynoting the Bundesbank’s biannual International Cash Conference. The lead article, headlined “Draghi calls for urgent spending as he relaunches stimulus,” reported that the European Central Bank had lowered interest rates deeper into negative territory, to -0.5%. In the opinion pages, anthropologist and regular columnist Gillian Tett observed that negative interest rates were constraining policy options to stimulate growth, which might compel central banks to coordinate more directly with fiscal policy makers—thereby lessening, if not abandoning, central bank independence. Lack of monetary policy options was  leading to a “changing zeitgeist,” she wrote.

At the Bundesbank conference, attended by people affiliated with the cash payments divisions of central banks and others, researchers presented data on the increase in cash demand despite the decline of cash transactions at the point of sale. People are increasingly paying with their mobile phone or cards, but at the same time, negative interest spotlights the cost of bank deposits, suddenly making cash a smarter option for savings. At the conference, lighthearted disagreements over whether to call this “cash hoarding” gave way to more insistent pleas for what some called “non-transactional” cash to be recognized as a rational response to negative interest with consequences for commercial banking and banknote design. If people are going to hoard cash, then perhaps banks need to get into the business of building vaults. And if people are going to want cash as a store of value resistant to negative interest, perhaps innovative banknote design should support hoarding: the cash should be more durable, stackable, maybe smaller than a standard banknote, and able to be kept in a cupboard and easily stashed in a backpack, should one need to escape a natural disaster, political instability, or war.

These were European designers, talking about European banknotes. This is a changing zeitgeist indeed.

Cash limits just how low interest rates can go, unless governments find a way to levy and enforce a tax on cash. Cash holdings are an alternative to paying the bank to hold your deposits—at least until the cost of storage, security and insurance approach the cost of paying negative interest. Hence: vaults. If for everyday transactions cash serves as a control mechanism for consumption (the pain of seeing your cash go away introduces a mental speed-bump in your spending), at the monetary policy level cash is a control mechanism defining a limit to the “innovative” monetary policies we have seen since the global financial crisis.

To read the full discussion, please visit https://justmoney.org/b-maurer-money-at-the-zero-lower-bound/.

New bank account, who dis?

IMTFI Director Bill Maurer talks about fintech apps in this Dope Labs podcast by Zakiya Whatley, Titi Shodiya & Jenny Radelet Mast

Interview Transcript Excerpt:

Zakiya: FinTech is all around us and it can feel like these apps have been around forever, but that's not exactly the case.

Titi: Yes, so our first question for Dr. Maurer was when did all of this stuff start popping up?

Dr. Maurer: This really kind of hit the scene in a big way in 2008 and 2009 with the launch of the iPhone.

Zakiya: Yes, the iPhone launch in the U.S. in 2007. But the iPhone 3G came on the scene in 2008.

Titi: Revolutionary.

Zakiya: Changed everything.

Dr. Maurer: All of a sudden people have this really cool device that fits in their pocket and is basically a terrific interface into a whole bunch of different applications are a whole kind of appecology grew up around the iPhone and similar devices. And people in Silicon Valley and in the banking industry and payments industry started realizing, hey, this device, this suite of devices and apps could really change people's relationship to their money into the existing financial and banking infrastructure.

Zakiya: I love that he describes this as ecology because we've talked about ecology on a couple of different episodes.

Titi: Yes.

Zakiya: And so the ecology is just how different things usually in biology we say how different organisms interact with one another. But now we're saying, how do these different apps talk to each other? How do people want to access the information now that they have a smartphone? So it's really cool to think about this in the context of more of a relationship.

Titi: Yes. So these apps have created their own special environment.

Zakiya: That's right. So the first category we're walking through is personal finance. These are apps like Mint, Credit Karma, You need a budget, and even your personal banking app. Generally, they help you manage your spending and saving.

Dr. Maurer: These apps basically serve almost as like training wheels. Right. So it's like training wheels on a bicycle that teaches you a little bit about budgeting and investing or savings. It's usually not enough to get you where you need to go, but it gives you basic skills and a basic vocabulary. So then you can start talking to other people, to friends, to your parents, or even walk into your credit union or bank and start asking better questions.

Titi: And these apps or services can be really good for helping people make smarter financial decisions. This help comes primarily in two ways. The first is by data visualization or giving people charts and graphs to show them what they're really doing with their money.

Dr. Maurer: For so many people. Money is just coming in and going out and they're not really being mindful about it or paying any attention to where things are going.


Listen to the full podcast and read full transcript to learn more about algorithmic bias, personal finance, and gender & credit. Links below.

Via podcast: https://megaphone.link/GLT5697101460 or online at https://www.dopelabspodcast.com/listen (Lab 021: New Bank Account, Who Dis?).

Full transcript:
https://static1.squarespace.com/static/5b38f40b7e3c3a94b302ba0d/t/5e347323e051ef5d568babaf/1580495652102/lab+021+transcript.pdf

For further reading, view Filene Research Report: "The Lessons of Fintech Apps: Design Matters for Personal Finance​"

Emotional Currency: How Money Shapes Human Relationships

IMTFI Director Bill Maurer interviewed on NPR's Hidden Brain, with Shankar Vedantam, Parth Shah, Tara Boyle, Jennifer Schmidt.

There's a story you may have heard before about what the world look like before money was invented. It's a story built on the idea of barter.

"It goes something like this: in the beginning, before there was money, if I had something that you needed, I would approach you with that thing and see if you had anything that I needed," says anthropologist Bill Maurer.

"The problem is that when we look around the world and in the historical and archaeological record for instances of this kind of direct barter, unfortunately we don't find it."

This week on Hidden Brain, we challenge established ideas about the origins of currency, and highlight the connection between money and relationships.

"Society is a thing of ongoing continuous relationships. The settling and unsettling of debts, on and on and on and on and on."

Listen to the interview podcast here: https://www.npr.org/2020/01/10/795246685/emotional-currency-how-money-shapes-human-relationships

The Lessons of Fintech Apps: Design Matters for Personal Finance​

by Bill Maurer, UCI; Melissa Wrapp, UCI; Chandra L. Middleton, UCI; Vivian Dzokoto, Virginia Commonwealth University; and Jenny Fan, UCI

This research report from Filene's Center of Excellence, the Center of Emerging Technology at UC Irvine provides lessons to credit unions that may help ​improve how their services are​ perceived and that may help ​activate deeper engagement ​with younger members.

Executive Summary
Fintech-based personal financial management (PFM) apps are providing new ways for budgeting and investing. In an effort to attract or retain Gen Z and Millennial members, financial institutions have been quick to adopt products similar to Mint or Acorns. In the race to provide these services, few financial institutions have reviewed and explored the value that such products provide, and how people interact with and feel about budgeting and investing with these new apps.

What Is the Research About?
Filene piloted a study that tested three PFM apps for budgeting (Mint, Wally, and You Need A Budget) and two for investing (Stash and Acorns). Twenty-seven participants between the ages of 18 and 34 used an assigned app for one month. Each participant was interviewed before and after using the app. Focus groups were held to provide additional insights.

We set out to learn three things from this study:

• How do people use these apps? And how does the design of the apps shape the user experience?
• What are the apps really teaching users? Are there conflicting messages to “buy” in budgeting apps? And how do users’ behaviors change as a result of using the apps?
• How effective are the apps at getting people to improve their financial behaviors?

Surprisingly, we learned that traditional financial institutions are still preferred over PFM apps. Although the apps have their benefits, people still want access to actual people in their financial institutions. In terms of design shaping the user experience, good design begets credibility. Poorly functioning or shoddy-looking apps eroded trust in the financial institution.

The apps tended to raise awareness of participants’ budgeting or investing behaviors rather than change behaviors. For some, using the apps reinforced preexisting frustration or stress participants felt about their financial lives. With investment apps, some participants felt that the gamification of the apps promoted addictive behaviors.

Read additional takeaways, download the full report, and view summary slides here: https://filene.org/487

Libra's biggest problem? Facebook

Bill Maurer, IMTFI Director, anthropology and law professor and social sciences dean in Wired, Dec. 5, 2019

Credit: Mike McQuade

Digital currency Libra needs Facebook's global reach to succeed, but the social network is also the biggest driver of its backlash. As regulators gather, controversy reigns.

…As the controversy rages on, Bill Maurer, the dean of social sciences at the University of California, Irvine, sees a missed opportunity to have necessary discussions about important issues with the world’s financial systems and the impacts on democracy. “In a way, I think, unfortunately, because it is Facebook, it's just, ‘get them in front of us on the TV cameras, and let's yell and scream at them about privacy and security’,” he says.

For the full story, please visit https://www.wired.co.uk/article/libra-cryptocurrency-facebook.

In Search of the Human Face of Artificial Intelligence

by Bill Maurer and Daivi Rodima-Taylor in Backchannels, Society for Social Studies of Science (4S)

“Once bots gained human rights, a wave of legislation swept through many governments and economic coalitions that later became known as the Human Rights Indenture Laws. They established the rights of indentured robots, and, after a decade of court battles, established the rights of humans to become indentured, too. After all, if human-equivalent beings could be indentured, why not humans themselves?” – Annalee Newitz, Autonomous

Figure 1. At the Symposium. Credits: Daivi Rodima-Taylor

We recognize the grim logic governing unfree labor in Annalee Newitz’s 2017 novel about future forms of property. Contemporary forms of human slavery and indenture occupy the same world as new intelligent computational systems and human-computational assemblages that are shifting the nature of work and contract—see, for instance, ride hailing, which is only a prelude to broader changes in augmented labor relations. This conjuncture brings to the fore urgent questions of autonomy, infrastructure, and ethics.

The symposium “The Human Face of Artificial Intelligence: Infrastructures, Narratives, Ethics” that took place at the University of California, Irvine on October 17, 2019, brought together an interdisciplinary and international group of scholars to discuss new challenges and opportunities around the systems of AI. Broadly defined as intelligent automated systems that can analyze their environment, make decisions and adapt their behavior by learning from experience, systems of AI steadily permeate social and political spaces, fomenting novel conversations about law, ethics, governance, sociality, and humanity.

If a complex AI system malfunctions and causes harm to humans, who or what should be found liable and according to which criteria? Should AI be viewed as a mere technological tool, or an autonomous agent with a free will? How does artificial intelligence reshape our conversations about legal personhood and human spirituality within this increasingly complex intersection of humanity and technology? Exploring the conceptualizations of a legal person in the history of Anglo-American jurisprudence, Summer Kim of UCI Law School discussed the challenges around prescribing new rights and obligations to artificially intelligent autonomous agents. Reflecting on lessons from arguments that corporations have used to enjoy some of the rights that natural persons have, she examined the ways how corporate law could guide the responsible use of technology in society.

Read the full post on Backchannels, Society for Social Studies of Science (4S) here: https://www.4sonline.org/blog/post/in_search_of_the_human_face_of_artificial_intelligence