Shadow Money and the Shadow Workforce: Rethinking Labor and Liquidity

Abstract

In recent years, theoretical inquiries into the changing forms of labor and money have proceeded alongside each other but have rarely entered into dialogue, much less investigated the evolving relationship between the two terms. This is a curious omission given that contemporary processes of financialization involve an ever-tighter entanglement between the fortunes of high finance and the everyday life of consumer borrowing and indebtedness. This article focuses on the phenomenon of shadow money—money issued outside the traditional boundaries of the New Deal banking system—to illuminate the ways money and labor have coevolved. It argues that the migration of money creation from the depository institution to the shadow bank and the changing form of money—from insured deposit to uninsured repo—represents an ongoing response to the evolving risk profile of labor itself. Shadow money creation has grown in concert with the expansion of the shadow workforce—the sector of the post-Fordist workforce engaged in contingent, nonstandard, and uninsured labor—and, until recently, has offered a solution of sorts to the social insecurity of labor. It is this solution that broke down in the recent financial crisis.