Monday, September 14, 2020

Money and Speculation in Times of Crisis

by Smoki Musaraj. Ohio University

During the peak of the COVID-19 pandemic in Italy earlier this year, I frequently checked the Facebook feed of many friends and family living there. Growing up in Albania like me, many of them had migrated to Italy in the 1990s. I checked to make sure they were OK. Other friends situated in other parts of the world did the same. Facebook feeds became a space for comparing the degrees of quarantine in different countries and for providing mutual support in times of collective isolation. During these checks, I often ran into conversations by Albanian diaspora that compared the experience of the COVID-19 quarantines to that of the infamous year 1997 (or, in colloquial Albanian, nëntdhteshtata, the ninety-seven). This was a year of political anarchy, of a state of emergency, closed borders, of curfews and protests caused not by a virus but by the collapse of a dozen pyramid schemes. For many of my friends who had come of age in late-1990s Albania, the COVID times brought back the memory of social isolation and economic insecurity they experienced when the schemes collapsed.

My book, Tales from Albarado: Ponzi Logics of Accumulation in Postsocialist Albania (Cornell 2020), takes an ethnographic approach to the rise and fall of the dozen of pyramid firms (firma piramidale). The firms emerged alongside the free-market reforms and post-communist financial institutions that followed the demise of the communist regime. When the pyramid firms folded in 1997, the country unraveled into anarchy and a near civil war. Looking into newspaper archives and interviews with former investors, Tales from Albarado seeks to gain a better understanding of how people from various paths of life came to invest in the financial schemes and, in turn, how such schemes intertwined with everyday transactions, dreams, and aspirations. Through this ethnography of the Ponzi schemes in Albania, the book explores more broadly the materialities, socialities, and temporalities of financial speculation.

I served as postdoctoral fellow at IMTFI during 2012-2014. During these years, I revised the manuscript of Tales from Albarado while working alongside IMTFI fellows from different parts of the world who were also exploring questions about money and technology in the global South. My work with IMTFI and a wonderful group of fellows influenced my thinking about the various top-down and bottom-up financial repertoires mobilized by the pyramid firms in Albania. I began to think about the pyramid firms alongside many other financial enterprises that serve the unbanked and perform many of the financial functions that we associate with the formal banking sector. Given the history of a strict ban on private property during the communist period, many Albanians lacked assets and savings and they were quickly excluded from formal institutions during the 1990s, a time of free-market reforms and widespread privatization. Many of them turned to the pyramid firms as a means of saving, borrowing, and investing. I therefore situate the pyramid firms at the interstices of formal and informal economic institutions and repertoires that emerged alongside post-communist reforms. I argue that these institutions persist to this day.

"The Pyramid" by Like Rehova, Revista Klan, 2.11.1997, Vol 1 (1): 2.
Courtesy of the New York Public Library. 

Scholarly discussions of financial bubbles often focus on the abstraction and anonymity of capital as the fuel of speculation. In Tales from Albarado, by contrast, I emphasize the materialities and socialities of speculation. I do so by looking at the circulation and conversions of various things—stack of cash, privatization vouchers, remittances, housing—through the pyramid firms. These materialities, I argue, are entangled with specific economic and social histories and cultural norms. This approach resonates with the work of so many IMTFI fellows who research the old and new financial technologies and repertoires used by people living at the margins of global capital (Maurer, Musaraj, and Small 2018). Like many IMTFI projects, Tales from Albarado explores how financial activities are deeply intertwined with social ties. 

Thus, a key finding in Tales from Albarado pertains to the role of a widespread bottom-up economic repertoire: remittances. Remittances were sent to Albanian residents via transnational kinship networks. They were mostly in cash and in multiple currencies as this was a time before the euro. Drachmas, liras, marks, dollars featured prominently in recollections of former investors who often expressed pleasure in dealing in multiple currencies and in carrying stacks and sacs of cash to and from the firms. Cash enabled bundling deposits from multiple investors; multiple currencies enabled cultural cachet and opportunities for arbitrage; social ties of kin, friends, and brokers (sekserë) enabled the expansion of investments to the firms. Accounts by former investors point to the highly personalized transactions that enabled financial speculation. Further, they provide a picture of a bottom-up repertoire—an informal cash economy in multiple currencies mediated by social ties—that constitute an enduring strategy of accumulation in a context of ongoing economic uncertainty. 

In addition to seeking other means of making wealth, I explore how participation in the pyramid firms entailed a negotiation of the temporalities of life and finance. The book looks into the buying, selling, and desiring of homes in conjunction with participating at the pyramid firms. A number of investors sold their recently privatized apartments (formerly state-owned) in order to invest at the firms. At the same time, most investors I interviewed, when asked what they planned to do with their returns, expressed their desire to buy a new home. The new homes were often imagined as an accelerated path towards a capitalist and European modernity. Those who had lost their homes to the schemes lamented their “lagging behind” this imagined trajectory. Housing, thus, became a site for materializing such temporal aspirations and for witnessing their failure. 

By examining the materialities, socialities, and temporalities of the speculative schemes, Tales from Albarado identifies economic practices and institutions as well as desires and aspirations that have endured throughout the three decades of neoliberal transformations in Albania. Strategies of value conversion, a propensity for accessing multiple regimes of value, intertwining finance and social ties, desires for an accelerated European modernity—these are all well-established social and financial institutions that make up the economic and social life in Albania. They are also practices and institutions that mirror the experiences of myriads of people whose lives are shaped by similar forms of geopolitical marginality and economic instability. These intertwined economies and socialities in contemporary Albania thus speak more broadly to the making of neoliberal economies at the margins.


Maurer, Bill, Musaraj, Smoki and Small, Ivan V. eds., 2018. Money at the Margins: Global Perspectives on Technology, Financial Inclusion, and Design. Berghahn Books.

Smoki Musaraj is associate professor of anthropology and director of the Center for Law, Justice, and Culture at Ohio University. 

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