These two volumes have been produced by a group of French economists and social scientists critical of neoclassical economics, particularly in the analysis of money. Mainstream economists adhere to the view that the essential phenomena of economic life can be described in terms of goods and services (in ‘real’ terms) and that money is a ‘veil over society’, a ‘neutral phenomenon’, which leaves the real processes of the economy unaltered. These French scholars, of whom Michel Aglietta and André Orléan are the main theoreticians, are strongly influenced by anthropological thinking. Their central hypothesis is that money is the product of its social environment, that monetary phenomena have a social basis and are deeply connected with the values of society. Money has an element of sovereignty, which means that it is an expression of the social whole and cannot be reduced to its economic function as means of exchange. Money is based on debts and credit, on trust and on the sacred and ritual foundations of any social group, which is indicated with the term sovereignty. The ‘debt of life’ is the heart of social reproduction.

The basic ideas of the two volumes discussed here is that monetary crises tear away the ‘money veil’, unveil the monetary system and reveal how essential money is to the whole social and normative fabric of society. However, there is some ambiguity at this point: if the Aglietta school rejects the neoclassical ‘money veil’ view, why does the editor still use the metaphor of ‘unveiling’, to analyse monetary crises? Strictly speaking, the notion of ‘unveiling’ should be at odds with the overall analytical framework. But the idea is clear: in periods of economic stability we do not notice how essential money is to the social order, but in times of crisis we realise that it belongs to the core of the social fabric.

The two volumes are the result of a series of seminars held at the University of Paris between 1999 and 2004, which brought together about thirty anthropologists, economists and historians. This seminar series was a continuation of an earlier one on the sovereignty of money, organised by Michel Aglietta, André Orléan and Jean-Marie Thiveaud, which resulted in Aglietta's book, La monnaie souveraine (Paris, 1995).

The first volume contains 13 case studies, presented in four thematic categories, each with a small introduction, viz., ancient societies (Greece and Rome), non-European societies (China in the eleventh century, Japan in the eighteenth century and the Ottoman empire in the seventeenth century), European societies (the creation of the Bank of England in 1696 and monetary history of the United States between 1865 and 1935), and monetary dualism and the phenomenon of currency boards (the situation in northern Russia during the civil war in 1918, Lithuania between 1988 and 1994, Cuba between 1989 and 2001 and hyperinflation in Argentina and Brazil between 1990 and 2002). The second volume has seven case studies, arranged under two thematic categories, viz., Russian crises and German crises.

Each volume has a long theoretical introduction, the first one by Bruno Théret, the second one by Michel Aglietta. The theoretical framework of both chapters is Aglietta's La monnaie souveraine, characterised as a research hypothesis to be subjected to an empirical test in this study. In my view, it is more fruitful to view the notion of ‘sovereign money’ as the core idea of a theoretical perspective or paradigm, rather than as a testable hypothesis in Karl Popper's methodological sense. A core idea cannot be verified or falsified in empirical tests, it shows its value when it stimulates research by generating illuminating insights, convincing interpretations and testable hypotheses.

Théret has made an interesting attempt to develop a morphology of monetary crises, combining both economic and sociological aspects. The study focuses on ‘monetary crises’, whereby the monetary system loses its legitimacy, and the social fabric is torn apart, not just ‘financial crises’, which have less impact. Aglietta's ambition is to go beyond description of a large number of monetary crises and to devise a general logic that bears on the nature of money as a social tie. The key of his approach is that monetary crises are crises of trust. He shows that a monetary crisis happens when trust collapses in all the dimensions of the monetary system, viz., the unit of account, the value of the means of payment, the repayment of debts, relations with other members of society, the hierarchical trust in political authority, and finally the ethical or symbolic trust in the foundations of the social order.

The socio-economic focus is not equally strong in all the case studies. Some authors mainly present the narrative of economic events. However, many authors pay attention to social and political aspects of the cases they present. Laurent Le Maux and Laurence Scialom (vol. I, chapter 9) analyse the sociopolitical conflicts at the basis of monetary policies in the United States in the 1865-1935 period. André Orléan's case study (vol. II, chapter 5) of the German hyperinflation in the early 1920s is a fascinating story of the breakdown of the social order, leading to social and political violence. The case shows, as he argues at the end of his chapter, that a stable monetary system is essential to the social order, and that without it people are totally disoriented in an opaque and dangerous world, because the links to each other have been destroyed. Particularly interesting is the series of case studies on Russia (vol. II, chapters 1-4), dealing with monetary crises from the early 1920s till the 1990s.

Methodological holism, as practised in these books, has its drawback. The authors of the two introductory chapters are using sociological concepts, without linking them with a larger empirical literature in sociology. Two examples: Aglietta (vol. II, pp. 19, 32) uses the concepts ‘social cohesion’ and ‘trust’, but he does not attempt to specify empirical referents of the terms, or to look for social indicators. That is regrettable because both terms have received much attention from sociologists in the last ten to fifteen years. It would have been interesting if the editor and some of the authors had tried to find more social indicators for the impact of monetary crises, such as statistical data on demographic phenomena such as marriages, birth rates, mortality, suicides as well as socio-economic indicators, such as bankruptcies, unemployment, wages, etc. These data may not be available for older societies, but they can certainly be found for late nineteenth- and twentieth-century cases. It is understood that the opposite criticism can be levelled against empirical sociologists studying ‘social cohesion’, who seldom or never pay attention to the role of money and monetary crises in social disintegration processes and who could benefit from pointers from the Aglietta–Théret framework.

Another set of concepts rather loosely used is that of ‘society’ and ‘community’. Théret (vol. I, p. 48) uses the concept ‘payment community’. It was the German economist Knapp, author of the State Theory of Money, who coined this concept in the early 1900s. However, the concept is strongly linked to the territorial model of the state. One can easily imagine a nation state (think of the German empire), with a strong state, a central bank and a gold standard monetary system, as a ‘payment community’. But what is the ‘payment community’ in late medieval and early modern period Western Europe, where a variety of precious metal coins circulated across political boundaries and where international networks of merchants settled their accounts with the use of bills of exchange? We may have to think in terms of overlapping layers of payment networks or payment circuits. What is then the relationship between these payment networks and ‘society’ or ‘community’? This is not to say that the terms ‘community’ and ‘society’ should never be used, but that any author starting to do so should clarify their meaning and relevance and specify the territory the concepts refer to, especially for the historical period before the rise of the nation state in the nineteenth century (and one may add: after its decline in the late twentieth century as well). Similar remarks can be made about ‘trust’: how can we make this phenomenon operational, how can we measure the decline of trust, and what are the social indicators for this phenomenon?

In spite of these criticisms, the overall evaluation of these books is positive. The editor and authors have convincingly illustrated the general point that monetary crises have devastating effects on societies, because money is the stuff linking the members of society to each other and to the whole social order, money is so to speak the cement of the society. The books have shown that the core idea of the ‘sovereign money’ approach can not only generate fruitful insights but serve as an eye-opener as well.

These books appear at a crucial juncture in time: the financial crisis which is presently unfolding may in the near future turn into a monetary crisis in some countries. The editor and authors may start a new series of seminars to study the effects of these events, using the core ideas of their approach. If they were to apply a stronger empirical-sociological focus, the results would be even more interesting.