Give and Take, Part One: Demonetization’s Pragmatics and Politics

Why are we surprised by demonetization? After all, governments have often reasserted their power over national currencies by withdrawing from circulation or redenominating banknotes and coins. Neither is the dream of going cashless new. Getting rid of cash was part of the mid-twentieth-century advertising campaign for the very first charge card. In 1976, at the height of the Miami drug boom, a proposal was circulated to demonetize $50 and $100 notes to counter their use in crime and tax evasion (Henry 1976). Since 2007 and 2008—with the confluence of the global financial crisis, the introduction of the first smartphone (the iPhone), and one of the first mobile phone–based money transfer services (M-Pesa)—there has been an explosion of interest in digital money that has dovetailed with a gathering anti-cash consensus. Cash, some say, is cursed (Rogoff 2016).

In the case of India’s demonetization, the surprise was in part manufactured: if the supposed targets, the hoarders of black money, had seen the move coming, they would have converted or deposited their undeclared stash ahead of the ban (so the story goes). On the other hand, as the contributions to this Hot Spots series suggest, it was no surprise at all. The decision is positioned within deep histories of postcolonial sovereign spectacle and disregard, oscillations between the state’s promises and its failure to live up to—or active revocation of—those promises. There is a durability to the state’s “economics of neglect” (in A. R. Vasavi’s terms), which give the lie to tales of inclusion or purity (in William Stafford’s) and ultimately reinforce “the magical powers and logics of the state” (in Namita Dharia and Nishita Trisal’s introduction). Yet persistence is not the same as repetition. Even if the return of crisis seems inevitable, its timing and form remains unpredictable. The resulting shoulder-shrugging sense of “well, what can we do?” is a recognizable one, as is the analytical impulse to resist easy, ruptural framings by tracing out what came before and what came after: origins and impacts, antecedents and descendants, lines of influence and lines of inheritance.

We might also, like some of the other contributors, want to dwell in the immediacy of the moment. In such moments, as anthropologists and sociologists have often noted, money becomes newly available to cultural commentary and practical innovation. Despite the sense of grievance among some—what Nayanika Mathur’s interlocutors portrayed as a kind of “Indic schadenfreude,” the hope that “for once,” perhaps, “the rich and moneyed” would be punished (Vasavi)—it was not only black marketeers who circulated cash, not only corrupt elites who hoarded banknotes. Far from surgical, the strike against large-denomination bills bled into everyday practicalities of gifting and saving, of politicking (Björkman), construction (Dharia), agriculture (Krishnamurthy; Aga), microfinance (Kar), health care (McDowell), and more. Demonetization’s immediate effects, especially on the lives and livelihoods of the poor, were harsh and punitive.

Still, contributors also describe the liveliness and inventiveness of people’s efforts to “muddle through” (as one of Andrew McDowell’s interlocutors put it): the calculations of note conversion; the rush to gold; the distribution of deposits across the accounts of family and friends; the deployment of alternative payment instruments (with concomitant discounting); the deferral of repayment and turn to in-kind transactions; the mobilization of mutual support and informal credit networks, as well as new and existing “mediators of money” (Dharia), a diverse menagerie of moneychangers, brokers, and mules; the snap decision-making of local bankers; the ubiquitous flash queues that transformed strangers into neighbors and ATM guards into companions and helpers . . . “what materialized,” as Geeta Patel and Kath Weston write, was the very sociality of money.

Here we have, quite neatly, the two sides of the coin, as Keith Hart (1986, 638) famously put it: the heads side of the sovereign and the tails side of “the market,” monetary imaginations starting from the top down or bottom up with state fiat or commodity exchange. Perhaps, then, we are surprised by demonetization for another reason: because, in spite of our anthropological selves, we hold onto a folk theory of money as a creature of commerce and neutral means of exchange, a theory which empties money of both politics and sociality. Even as we forget that money is always a social relation, both qualifying and qualified, we also conveniently overlook money as an extension of state power, like the early Greeks who missed the fact that when they passed the coin of the king face-down and obscured his insignia, they did not so much contest the authority of the sovereign as imagine themselves animating the silver in ancient circulations (Shell 1978). Theorizing money’s two sides—state and market, stakeholder and community (Desan 2014), formal and substantive validity (Weber 1978)—is only the beginning. We cannot ignore the corollary questions: of power (how, for example, a monetary authority became and remains authoritative) and of trust (how the unit issued by that authority comes to be accepted across time and space).

As with broader transformations of money’s technologies and infrastructures, demonetization opens the door to the reconsideration of money itself. But too often such reconsiderations return to familiar figures, like the gold standard, as we discuss in our companion commentary. Other politics and other pragmatics are called for. One lesson of this Hot Spots series is that the pragmatics are already all around us: money, insofar as it is taken up by people in their own ingenious ways, full of contradictions yet not so tightly tethered to its ancestral figures after all, makes kin. Whether those new makings and muddlings-through can translate into a new politics remains to be seen.


Desan, Christine. 2014. Making Money: Coin, Currency, and the Coming of Capitalism. New York: Oxford University Press.

Hart, Keith. 1986. “Heads or Tails? Two Sides of the Coin.” Man (N.S.) 21, no. 4: 637–56.

Henry, James. 1976. “Calling in the Big Bills.” Washington Monthly, May: 26–33.

Rogoff, Kenneth S. 2016. The Curse of Cash. Princeton, N.J.: Princeton University Press.

Shell, Marc. 1978. The Economy of Literature. Baltimore: Johns Hopkins University Press.

Weber, Max. 1978. Economy and Society. Edited by Guenter Roth and Claus Wittich. Berkeley: University of California Press.