By Magdalena Villarreal and Isabelle Guérin based upon their IMTFI-funded research
Our inquiry focused on valuables in South India and Western Mexico, particularly
the frameworks of calculation and the financial instruments involved when they are generated, stored, accumulated, mobilized and exchanged. At first glance, these sites seem very
different, but in both our Indian site in the South Arcot region of Tamil Nadu
and our Mexican site in the municipality of El Grullo, agriculture is a very
important activity, and capital from outside of the area (such as petrochemical and
horticultural industry). Both also have strong
histories of social credit and savings associations like rotating savings and
credit associations (ROSCAS).
In exploring calculation and financial instruments, we came across the
relevance of gold, both as a marker of status and a representation of value. As
we documented the ways in which it was deployed in the two different social,
cultural and geographic contexts, we found striking differences, however. Such
differences reveal important issues concerning the nature of social
relationships involved in the processes of valuation, mobilization, accumulation
and exchange.
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| A financial company (photo by Isabelle Guérin) |
Our findings confirmed a wealth of financial activity, including
pawnbroking, informal lending, borrowing from relatives and friends, and intense
participation in credit and savings cooperatives, ROSCAS and micro-financial institutions. But more than a few participants in
microfinancial institutions were in large amounts of debt.[1]
Arrangements made to meet payments often involved third parties and the
translation of one type of valuable into another. In the Indian region studied,
for example, households had a higher propensity to engage in debt than Western Mexicans. But in both contexts debt was fragmented along class and
gender lines, as well as caste in India and ethnicity in Mexico. In the latter
region indigenous migrants struggled for access to different sources of money lending.
Diverse forms of saving were resorted to in both countries, mostly for
the short and medium term. Investments for the future tended to be in the way
of buying land, a house, a vehicle or a small business. But the most resorted
to in the Indian region studied were gold and ROSCAS. In Mexico, gold and jewelry were less valued
as a form of investment than were cattle or housing. Cattle were not regarded
as a form of saving in India due to the sluggish market, but were, like in
Mexico, a matter of status.
In Mexico, saving in money tended to meet short and
medium term needs. In terms of accumulation of patrimonial assets, it was
‘inefficient’ if what was sought was to multiply existing resources, since such
assets were not very fungible. This could entail loss of opportunities. We are
here speaking of two different circuits of valuation. On the one hand,
agricultural land and housing provided security for families, but their
acknowledged value relied less on the market than on the utility they provided.
But if the intention was to invest in the market, the value of “access capital”
in terms of information, contacts and the possibility of speculation could be
greater than the value of the asset itself.
Gold constituted an important alternate form of savings in both
countries. It provided material wealth that could be held, measured and
displayed. In the Indian region studied all households owned gold, an average
value of which was 105,519 INR[2]
(around 2,321 USD), but 76.5% of it was pledged to pawnshops. Gold enhanced
women’s status and helped entice good husbands for their daughters. It was used
as a form of protection for daughters who were less powerless in their
households because they had valuable possessions that could be pawned.
In Mexico only 7.5% reported owning jewelry, although through our
ethnographic inquiries we know that more than a few pledged jewelry (and as is also
testified by the number of pawn shops mushrooming in the area), it was not well
reported as relevant in the survey. However, 16.25% of households have lost an
electronic home appliance to pawnbrokers.
In rural Tamil Nadu, gold could be considered
as a buffer, with jewelry pledged and very often sold in case of problems. When
women were asked how they coped with emergencies, their first reply was often:
"the things I wear on my ears and hands." Gold was a very
efficient means of speculation as the gold rate constantly grew. Gold could also be considered as a form of long-term
saving. Women tried to buy gold regularly for the marriage of their children,
to prepare for the ceremony and the many gifts they would have to distribute.
But gold was first and foremost an ostentatious item and an outward sign of
social status. Women displayed their jewelry at social and religious rituals,
particularly marriages and puberty ceremonies. Alongside clothing (sarees), jewelry was a true marker of
local hierarchy.
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| A gold earring (photo by Isabelle Guérin) |
There was an important gendered aspect to gold, since
it was one of the few assets women could actually own. It was inherited at
marriage, the mother seeking a form of security for her daughter. Some forms of
jewelry were very discrete (e.g. taking the form of very small spheres (kundumani) which women hung on their
necklaces). Much jewelry circulated among women and their reciprocal exchange
was instrumental in the creation and strengthening of women's solidarity. Men
often found it difficult to assess their monetary value, while women were more
experienced in distinguishing gold from gold-plated jewelry, establishing
genuine from fake, and evaluating depreciation due to wear. Women played with
these aspects in order to estimate what they possessed, and were sometimes more
effective in dealing with pawnbrokers, visiting in groups in order to negotiate
prices in a context where interest rates varied little, but the amount of cash
per gram changed considerably.
In Mexico, on the other hand, too ostentatious a display of jewelry was considered
inappropriate. While people did value gold and silver, they tended to keep them
in safe places and only pledge them when it was absolutely necessary. Rather,
status markers for men included vehicles, large watches and fancy boots or
cowboy hats, and for women, clothing. However, women tended to prefer a solid
house, a cow, or a piece of land as a way of storing value. It is telling that
in Mexico people used 14 karat gold the most, while in India they tended to use
18 karats. Also the circulation and exchange of gold was much more intense in
rural Tamil Nadu than in Western Mexico.
As well as displaying many types of value production, accumulation and types of transaction, a focus on the use of gold is useful to explore the diverse forms
of financialization that are taking place.
These entail diverse modes of social organization (gender regimes,
caste, ethnic and class hierarchies), patterns of social hierarchy,
predominant moral criteria and forms of valuation. They thus reveal the bare
bones of social relations and processes of valuation that underlie financial
transactions.
[1] The social fabric of finance, saving and debt and its
consequences in terms of vulnerability and over-indebtedness has been explored
in more detail in an edited volume Microfinance, Debt and Over-Indebtedness: Juggling with Money.
[2] The
statistical data reported in the document come from a survey done with 400
households in each region within the RUME project
(www.rume-rural-microfinance.org).
Link to Magdalena Villarreal's working paper: About Calculations and Social Currencies: Indigenous Househoulds' Financial Practices in the Highlands of Chiapas
Link to Magdalena Villarreal's working paper: About Calculations and Social Currencies: Indigenous Househoulds' Financial Practices in the Highlands of Chiapas
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