I have come to debase the coinage.

As I was reading these compelling slices of a dramatic (or, better yet, draconian) history unfolding in real time, I couldn’t help but push myself to think about past demonetizations. Even as those many examples roiled through my mind, I had trouble thinking of any demonetizations quite as stark as the recent Indian one. Given its strong whiff of authoritarianism, maybe past debasements by regents in Europe could serve as the most obvious predecessors. In these instances, kings and queens would demand that all circulating coins return to the treasury, where they were melted down and recirculated with less metal value, even while carrying the same old denomination. The treasuries retained the excess metal as seigniorage, as that was the entire intent of the exercise. (In terms that are more meaningful to anthropologists, it is important to note that, in such processes, the sovereign held onto an international standard of value, while recirculating a national standard of value to the citizenry.) Such events caused uproars, but the money they raised for the government was crucial, since governments at the time had yet to develop a system of regularized income taxation.

And yet, from the astute reports presented in this Hot Spots series, it is not obvious that the Indian government was motivated to enact demonetization simply to raise funds. Indeed, it is quite easy to see how such a radical shock to the banking system might well have cost the Indian government more money than leaving well enough alone. So we must look elsewhere, as the excellent pieces collected here do, for a different understanding of Prime Minister Narendra Modi’s monetary motivations.

It appears to me—but, of course, I’m biased—that India’s demonetization resonates perfectly with one of my own pet causes within our discipline. As outlined in a recent article (Peebles 2014), I want us to extend—far beyond her original intent— the central insights made by Annette Weiner (1992) in her landmark text Inalienable Possessions. In a bizarre mixture of humble relativism and bold universalism, Weiner—and her peers of the time—failed to see that her arguments applied to more than the so-called heirloom goods that she studied. In my article, I pushed for Weiner’s theory of “keeping-while-giving” to be applied to banking; indeed, I argued that it should be seen as a simple restatement, through the lens of anthropology, of the general practices of retail banking (and its regulation by states).

By applying Weiner’s theory to realms of economic life that she didn’t herself study, I argued, we gain insight into three highly specific and crucial aspects of formal retail banking. First, as Karl Marx pointed out, banks are actually collectivization machines, pooling together a vast number of tiny sums of money that are individually owned but, through banking, come to be collectively shared. Second, these pooled sums—having emerged out of a critique of private hoarding—are themselves (partly) hoarded by the banks and central banks of the world. Third, banks must convince people to share their (relatively) tiny sums with them. Within both policy and social scientific circles, this latter process is known as “financial inclusion,” a phrase that obscures its far deeper history.

Ordinarily, formal banking spreads through incentives, such as offering a savings rate of return or by circulating rhetoric about the supposed idiocy of hoarding in a mattress at home (see Peebles 2008). The Indian demonetization seems to have added a new technique to this traditional toolkit, but an astonishingly blunt and brutal one at that. In other words, if the carrot had not been working, perhaps Modi decided it was time to resort to the stick. Crucially, by demonetizing 86 percent of the bills in circulation, Modi was not debasing the unit of account, but only the medium of exchange and the store of value. If a given Indian citizen’s money had already been enumerated exclusively as digits in a bank account on the day of demonetization, she would have had nothing to worry about; it was only people who were hoarding small bills who were penalized. These countless Indians were often practicing informal banking—that is, Weiner’s “keeping-while-giving.”1 Typically, the formal banking sector seeks to crush such individuals out of existence, for every private hoard is not—as the proponents of formal banking typically claim—money that isn’t in circulation. This money circulates just like any other (alleged) hoard. It just does so in far smaller (and perhaps less economically efficient) spheres of circulation; furthermore, it is money that is not under the control of formal bankers, and is therefore less easily monitored by the Reserve Bank of India.

If, as I believe, formal and informal banking are in a constant battle for territory, it is worth remembering that the former technique has the power of the state behind it, while the latter often fears precisely this apparatus. Indeed, informal banking is often a useful technique to hedge against a corrupt state system that suffers bankruptcies, runs, and debasements. Seen from this angle, forcing people to queue in line for days on end can be seen as a sort of corvée labor tax applied to recalcitrant informal bankers. Apparently, many Indians eventually got their money back, but at a steep cost in lost productivity and payments to others who could help them exceed the daily exchange limit. This incredibly helpful and illuminating assemblage of short essays about India’s demonetization clarifies that with his harsh policy, Modi was perhaps darkly implying to his citizens that they should abandon their commitments to their own private futures, and instead join—and start trusting—his budding national one.


1. Skepticism toward the formal banking system has a long history in India. As has been pointed out by others before, John Maynard Keynes’s (1913) first book was on Indian currency; in it, he dwells on what he calls the “problem” of Indian hoarding, and some believe that this produced his central fixation on the “liquidity preference.” G. Findlay Shirras, a contemporary of Keynes, also attested to the enduring appeal of informal banking in India when he wrote: “Everyone outside towns [in India] may be said to be a firm believer in the saying that every man should be his own banker” (Shirras 1920, 9).


Keynes, John Maynard. 1913. Indian Currency and Finance. London: Macmillan.

Peebles, Gustav. 2008. “Inverting the Panopticon: Money and the Nationalization of the Future.” Public Culture 20, no. 2: 233–65.

_____. 2014. “Rehabilitating the Hoard: The Social Dynamics of Unbanking in Africa and Beyond.” Africa 84, no. 4: 595–613.

Shirras, G. Findlay. 1920. Indian Finance and Banking. London: Macmillan.

Weiner, Annette. 1992. Inalienable Possessions: The Paradox of Keeping-While-Giving. Berkeley: University of California Press.