Recursive in/formality: Time and ideology in a distributed monetary system
10.7340/anuac2239-625X-3073
I argue that in/formality is not a distinction between two qualities, but rather, a distinction of relative position achieved through linguistic and nonlinguistic practices of categorization. Through an analysis of illegal currency trading in Argentina, I show how temporal and ideological dynamics shape the semiotic framing of in/formality in any given context.
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Sarah Muir
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Recursive in/formality: Time and ideology in a distributed monetary system
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Forum: In/formalization
2017-12-31
2017-11-24
2017-12-31
2017-12-31
77-83
1
Sarah Muir
2017/12/31
10.7340/anuac2239-625X-3073
77
CUNY, City University of New York, United States
2239-625X
2
en
83
Recursive in/formality: Time and ideology in a distributed monetary system
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                                              2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 77-83




                                                                                     FORUM




Brindisi to the Brindisians, graffiti in Brindisi, Italy. Photo by A. M. Pusceddu.


In/formalization
Edited by
Alan SMART, Josephine SMART, Filippo M. ZERILLI

Contributions of
Stamatis AMARIANAKIS, Lenka BRUNCLÍKOVÁ, Dolores KOENIG, B. Lynne MILGRAM, Sarah
MUIR, Antonio Maria PUSCEDDU, Alan SMART, Mechthild VON VACANO, Filippo M.
ZERILLI & Julie TRAPPE.




This work is licensed under the Creative Commons © SARAH MUIR
Recursive in/formality: Time and ideology in a distributed monetary system
2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 77-83.
ISSN: 2239-625X – DOI: 10.7340/anuac2239-625X-3073
IN/FORMALIZATION                                                                          77




Recursive in/formality
Time and ideology in a distributed monetary system

Sarah MUIR
CUNY, City University of New York




ABSTRACT: I argue that in/formality is not a distinction between two qualities, but rather, a
distinction of relative position achieved through linguistic and nonlinguistic practices of
categorization. Through an analysis of illegal currency trading in Argentina, I show how
temporal and ideological dynamics shape the semiotic framing of in/formality in any given
context.




   As Keith Hart (1973) originally proposed and as the premise of this collec-
tion insists, formality and informality are necessarily intertwined. In what
follows, I approach that intertwining as a semiotic process between two co-
constitutive cultural categories. In taking up that approach, I draw on the
concept of “fractal recursivity” that Gal (2000) and Gal and Irvine (1995)
have developed to describe categorial distinctions – such as public/private,
inner/outer, friend/foe – that do not refer to any particular thing or set of
things, but that can be projected «onto narrower contexts or broader ones»
as well as onto different «activities, identities, institutions, spaces, and inter-
actions», all of which can, in turn, be recategorized over and over again (Gal
2000: 81). I propose that in/formality is just this sort of distinction: a distinc-
tion not between two qualities that inhere within and define different acts or
domains, but rather a performed distinction of relative position that must be
continually achieved through semiotic practices of framing and categoriza-
tion. I argue that analytic attention to these linguistic and nonlinguistic
practices helps bring into view the often overlooked but crucial roles that
temporal and ideological dynamics play in shaping the articulation of in/for-
mality in any given case.


                                             2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 77-83
78                                          ALAN SMART, JOSEPHINE SMART, FILIPPO M. ZERILLI (EDS)


    To make this argument, I will describe a context where the fractal recur-
sivity of in/formality played out in an especially visible fashion. The context
was Argentina between 2011 and 2015, when currency regulations criminal-
ized the popular practice of saving in U.S. dollars. The regulations were an
attempt to safeguard the nation’s dollar reserves, which had come under in-
creasing pressure due to the coincidence of multiple factors, including Ar-
gentina’s limited access to foreign capital (due to its 2002 sovereign default),
a global slump in commodity prices, high inflation 1, and the always pressing
need to service that portion of the foreign debt that had not been defaulted
upon. These circumstances had prompted businesses and individuals alike to
hoard dollars, which had long served as a vehicle for hedging against mone-
tary loss in a national economy famous for economic crises and currency de-
valuations2. As the nation’s reserves diminished rapidly, President Cristina
Fernández de Kirchner faced the prospect of yet another crisis. Despite the
dire situation, the currency restrictions proved highly controversial. Support-
ers of the President defended them as necessary for monetary sovereignty
and economic stability. Her opponents, meanwhile, saw them as a state in-
trusion into the market. With the restrictions, the government did prevent fi-
nancial collapse. However, it did not do so by eradicating the purchase of dol-
lars. Rather, criminalization produced a complex monetary system that fore-
stalled outright crisis, but only at the cost of its own popular legitimacy. That
unstable system was defined by a series of nested in/formal distinctions.
    Take the distinction between the “white dollar” (dólar blanco) and “black
dollar” (dólar negro). The former term referred to the peso/dollar exchange
rate declared by the Ministry of Finance. Because of the currency restric-
tions, that rate was not actionable in practice3. Nonetheless, it declared pur-
ported macroeconomic truths and served as the official basis for wage nego-
tiations and budgetary decisions. By contrast, “black dollar” referred to the
illegal rate at which people purchased dollars with pesos accrued through
widely condemned activities, especially the trafficking of drugs, arms, and
humans. Whereas the white dollar was standardized and publicly known, the
1. A scandal at the national statistics agency (INDEC) during this period makes it impossible
to state confidently the accurate inflation rate.
2. Hoarding techniques varied from stuffing dollars under mattresses to Swiss bank ac-
counts. Physically storing dollar bills is popular because of the government’s history of seiz-
ing dollar-denominated banking accounts (Muir 2015). As for Swiss bank accounts, Ar-
gentina has one of the world’s highest numbers per capita (Swiss Leaks 2016). See also
D’Avella’s (2014) account of the related practice of storing monetary value in real estate pur-
chases.
3. In principle, there could be exceptions that would allow the purchase of dollars in certain
circumstances. However, the criteria for granting those exceptions were never publicized and
they appear to have been made in extremely limited fashion.


2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 77-83
IN/FORMALIZATION                                                                        79


black dollar was negotiated anew in each transaction, inevitably carried out
in hidden, even dangerous, conditions. As popular terms, then, “white dollar”
and “black dollar” reified, nominalized, and commensurated wildly different
practices of calculation, exchange, and negotiation. The terms framed those
practices as diametrically opposed dollars: one formal, legal, and morally le-
gitimate; the other informal, illegal, and morally illegitimate.
   This opposition was complicated by the “blue dollar” (dólar blue)4. The
blue dollar was just as illegal as the black dollar, but people who opposed the
currency restrictions and the President more generally considered it legiti-
mate. The pesos used to buy blue dollars may have been earned legally or il-
legally, but always in a putatively moral (or, at least, amoral) fashion. This
dollar was bought in “caves” (cuevas), spaces tucked away inside legal busi-
nesses, from corner stores to banks. The trade was widespread and tolerated
by government officials except for periodic, highly publicized crackdowns.
Although individual transactions were hidden from public view, the blue rate
was highly visible, for it was determined by an algorithm that regularly cal-
culated the difference between the stock valuations of several companies
traded on the New York City and Buenos Aires exchanges. The result of that
calculation was published continually on a widely consulted website5. Oppo-
sition news organizations proclaimed it on the front page of the daily papers
and news organizations loyal to the President condemned it. And so, the blue
dollar became the topic of constant commentary in face-to-face, mass media,
and social media channels.
   Almost without exception, that commentary was structured as a polarized
debate. Those who defended its legitimacy as a necessity, given the currency
restrictions’ purportedly populist and statist assault on market logics, re-
ferred to it as as “parallel” (paralelo), “free” (libre), or “informal” (informal).
All these terms, along with the practices of publicity and algorithmic calcula-
tion, did a significant amount of stipulative labor, for they projected infor-
mality onto the blue dollar while distinguishing it morally and practically
from both black and white dollars. Supporters of the government’s currency
restrictions, on the other hand, refused those terms, preferring “illegal cur-
rency exchanges” (cambio ilegal), a nominalization that posited a black and
white terrain in which legality, morality, and formality were coterminous and
attempts to skirt monetary regulation amounted to attempts to destabilize a
democratically elected government dedicated to the needs of “the people” (el
pueblo).
4. My account of the blue dollar is drawn from several news media and academic sources, but
especially from Herzbach 2014 and Sánchez 2013.
5. To my knowledge, it is not publicly known who sponsored the website (www.dolar-
blue.blogspot.com).

                                            2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 77-83
80                                         ALAN SMART, JOSEPHINE SMART, FILIPPO M. ZERILLI (EDS)


   There was also a host of other “dollars” (dólares). There was a “gold dollar”
or “tourist dollar” (dólar gold or dólar turista), the rate when one purchased
something abroad in dollars with a peso-denominated Argentine credit card.
There was a “Colonia dollar” (dólar Colonia) the rate for extracting dollar bills
with an Argentine banking card at an ATM in nearby Colonia, Uruguay. The
terms “gold”, “tourist”, and “Colonia” referred to practices that enabled peo-
ple to work around the currency restrictions by paying the white rate plus a
percentage-based fee imposed by the Argentine government. There was also
a “green dollar” (dólar verde), the rate for purchasing dollars illegally from
perambulating vendors who charged a premium on the blue as compensation
for the risks of the street. The green dollar (like the black) was not standard-
ized; rather it was derived on an ad hoc basis from the blue and shaped by
judgments regarding variables such as time of day, location, recent political
developments, and the perceived trustworthiness of the parties involved.
   Thus, the gold, Colonia, and green dollars all stood as informal, but in dif-
ferent ways. Despite the regulatory processes that produced the gold and
Colonia exchange rates, the government never recognized them as such. That
studied refusal of recognition, along with the popular naming of those prac-
tices as “dollars”, framed them, like the blue, as the informal but technically
legal derivations of the formal white dollar. Meanwhile, other practices of
naming and calculating framed the green as the informal derivation of the
relatively formal blue. That the blue dollar could stand as formal with respect
to the green and informal with respect to the white demonstrates nicely the
concept of fractal recursivity that I mentioned at the outset: Across these
dollars, in/formality was not a matter of two distinct, if intertwined, social
spaces or even types of activity. Rather, it was the effect of a continually re-
imposed perspectival frame.
   This bewildering array of dollars was not an officially acknowledged sys-
tem of multiple exchange rates, but that’s what it amounted to. We are all –
as consumers and economists, citizens and politicians, academics and poli-
cymakers – accustomed to thinking of money as a unitary vehicle that serves
as store of value, medium of exchange, and unit of account. Here, those and
other functions were priced differentially across a distributed system in
which each “dollar”’s price cited that of the others. The result was the possi-
bility of arbitrage, and all sorts of people – from small business owners to
teachers, from waitresses to lawyers – made small-scale profits (or avoided
small-scale losses) by exploiting the differences amongst the various dollars.
It was this illegal but tolerated arbitrage that allowed the Argentine mone-



2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 77-83
IN/FORMALIZATION                                                                        81


tary system to perform the delicate balancing act required by the conditions
of the period in question. Nonetheless, because of the widespread ideology
that envisions money as a frictionless, unified medium, the practice of arbi-
trage and the distributed monetary system that made it possible were not of-
ficially recognized. And so, another projection of in/formality took place on a
far larger scale.
   Despite the thoroughly polarized debate over the legitimacy of the Presi-
dent and her monetary policy, everyone agreed that the existence of multiple
exchange rates was abnormal. For her supporters, monetary value should de-
termined by the state, and for her detractors, by the market. However, for all
concerned, monetary value should be unitary 6. And so, both sides framed the
distributed monetary system as informal. The President’s administration did
so in several ways, most obviously by tolerating and even enabling the dis-
tributed monetary system but disavowing it through periodic crackdowns
and continual public condemnation. Those opposed to the President framed
it as informal by insisting that it was an unfortunate but necessary way of
working around her alleged mismanagement. Through these practices of
publicity, policing, and policy-making, people on both sides of the debate (as
well as participants and non-participants in the exchange of non-white dol-
lars) all treated this distributed monetary system as the informal counterpart
to an idealized, nonexistent monetary system in which state and market val-
uations of money were perfectly aligned. In other words, formality figured
here as a spectral and utopian aspiration, from which Argentina fell short.
   Here, then, in/formality played out across different scales and social spa-
ces in distinguishing between actors, objects, exchanges, calculations, and
even entire monetary systems. In closing, I would like to propose three im-
plications of this proliferating series of recursive distinctions.
   First, in/formality is not necessarily about in/visibility, as we might tend to
assume7. Neither is it about distinguishing between any particular constella-
tion of qualities. Rather, contextually situated actors must work to impose
the distinction convincingly through linguistic and nonlinguistic practices.
In other words, in/formality is best seen as the effect of an ideological strug-
gle over what will be dis/avowed and on what grounds the legitimacy of
dis/avowal will be judged.
6. This antinomy between the two grounds of monetary value is not unique to Argentina. In
fact, it is utterly common because, as Hart (1986) argued, monetary value always requires
the authorizing work of both political and economic institutions, which need not articulate
smoothly with one another.
7. The website of the Global Informality Project (2017), for example, describes informal
practices both as “invisible”.

                                            2017 ⎸ANUAC. VOL. 6, N° 2, DICEMBRE 2017: 77-83
82                                           ALAN SMART, JOSEPHINE SMART, FILIPPO M. ZERILLI (EDS)


   Second, the temporality of that struggle is key. In the case presented here,
the impositions of in/formality were especially unstable. Because of the
monetary ideology mentioned above, the distributed monetary system was
framed not simply informal, but as intolerably so. People thus judged it to be
so dysfunctional that collapse was inevitable. That judgment in turn
prompted many people to seek out dollars with heightened zeal, thereby fur-
ther destabilizing the monetary system8. The result was a dialectical rela-
tionship between judgments of legitimacy and mechanisms of price that pro-
duced an ever greater disparity between the white and blue prices. That dis-
parity, in turn, contributed significantly to the 2015 electoral victory of
Mauricio Macri, who succeeded President Fernández de Kirchner and imme-
diately made good on his campaign promise to end her currency regulations.
   Finally, although the particularities of this case stem from the especially
fraught context of Argentine financial history, it is far from exceptional. In-
deed, the general dynamic may prove quite commonplace, and not only in
the Global South, for the contemporary moment is one in which the perfor-
mative power of monetary policy (Holmes 2013) has come under consider-
able strain, even in the political-economic centers of global finance (Appadu-
rai 2015; Streeck 2016). It remains to be seen how that strain might increas-
ingly compel central bankers to turn to in/formality as a tool of monetary
governance – with potentially momentous repercussions for ideologies not
only of monetary value but also of the relationship between states and mar-
kets.




8. See Muir (2016) for an analysis of this self-destructive dynamic in practices and discourses
of “corruption” in post-crisis Argentina.


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IN/FORMALIZATION                                                                      83




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