“Embeddedness” in the Federal Reserve Comic Books
An Inquiry into the Ideological Constructions of the Social
On April 29th, 2019, The New York Times published an article by Jeff Sommer reporting on the recent release of the Federal Reserve’s (Fed.) newest issue of its educational comic book. On the surface, this may seem like a noble effort on behalf of the Fed., as making economic and financial knowledge, and social scientific thinking, accessible to young people in the form of easy-to-digest, brightly colored comic books, seems like a great idea.
Three such comic books can currently be accessed on the Federal Reserve’s website. The Fed’s website offers us a short introduction to the series, claiming that “The New York Fed’s Educational Comic Book series teaches students about basic economic principles and the Federal Reserve’s role in the financial system.” Entitled The Story of the Federal Reserve System, Once Upon a Dime, and The Story of Monetary Policy, the comic books are set on distant planets, each issue detailing a way in which a central bank works to keep an economy supposedly healthy and stable.
What these comic books and Sommer’s article lack is an appreciation for the social. Karl Polanyi’s conception of embeddedness, developed in his most influential work, The Great Transformation: The Political and Economic Origins of Our Time, can be instructive here. Polanyi’s critique was leveled against classical liberal political economists. His idea was to demonstrate that an economy was embedded, immersed or layered into social relations. Rather than view the market economy as something outside of, or autonomous in relation to, the social sphere, he suggests that markets always operate within, and rely upon, social conventions. We might think about how a market operates differently in Karachi than in New York, or Frankfurt and Moscow, etc., and, as much of the literature in the sub-field of New Economic Sociology suggests, point to the ways in which markets are embedded in each of the multitude of social contexts in which they operate.
Taking the concept of embeddedness, and (dis) embeddedness (the conceptual negation of embeddedness, the idea that markets are in fact autonomous in relation to the social contexts they operate within) and applying them to the Federal Reserve comic books, we see that these comics may in fact suggest something more nefarious.
In The Story of the Federal Reserve System, a planet called Novus is experiencing its “first economic crisis.” In an effort to learn how to divert another crisis, they send some space- faring explorers out to find a system which will help them “keep their economy strong.” They send three individuals, two business owners and a central banker, “at warp speed, clear across the universe to planet Earth and the United States of America.” Their plan is to learn about the way the Federal Reserve system operates. They soon learn that the Fed. was established to act as a lender to other banks, and that the Fed is actually a decentralized bank, with 12 geographical districts, organized to accommodate the trading patterns of different parts of the US. This sounds like sound financial policy, and even seems to adopt a version of embeddedness, recognizing that different parts of the US produce, provide, use and consume different goods and services.
However, The Story of the Federal Reserve System offers no account as to why different geographical areas of the US have different economies. They make no mention of the fertile plains in the Midwest, no mention of the centralization of the railways around Chicago because of the trust placed in early developers of the city’s infrastructure, as William Cronon does in Nature’s Metropolis: Chicago and the Great West. What is instead suggested is a sort of simple division of labor, that some places produce some commodities because one cannot produce all. This vision of geography resonates well with the ideologies of “comparative advantage” and the “Washington Consensus” long advocated by the US. Upon the return of the explorers to Novus, no mention is made of their attempts to organize their reserve system into demarcated geographical-economic areas.
Additionally, it seems a bit ridiculous that a planet, with the ability to go anywhere in the universe, would choose the United States as the place to go to learn about avoiding financial crisis. A planet which has the ability to develop the means for advanced space travel probably has a sophisticated division of labor. It took humans until the 1960’s to even travel to the nearest celestial body, the moon, and in the course of that time, countless economic crises haven arisen. If this advanced spacefaring planet has had only one crisis, perhaps it should be US astronauts who should be traveling to Novus to learn from its denizens about how to avoid crisis, how to house and educate its people without the bursting of massive credit bubbles. But of course, it is not only minute changes in financial policy that determine when and where a crisis will land. To get imaginative for a moment, perhaps we should consider what it is about society on Novus that has allowed it to avoid crisis for so long, given its developed division of labor, etc.
The confluence of social science and science fiction is nothing new. One might remember how, in the original Star Trek series, Captain Kirk would sometimes send a red-shirted Sociologist to the surface of a planet, to better understand life on a “strange new world” while seeking out “new life, and new civilizations.” Of course, the worlds were not strange to those living on them, and the life and civilizations were only new to the crew of the enterprise (with the exception, perhaps, of Mr. Spock.) However, the guiding principle of the mission of the Enterprise, the “Prime Directive,” was to avoid interfering with the development of planets. The Fed’s conceptualization of its own role, in this world, is exactly contrary to the “Prime Directive.” The point is to interfere, to change the course of development on Novus.
The hubris of the American financial sector is on full display in these comic books. It may be far-fetched to imagine an American high-school student contemplating how the Federal Reserve might teach distant planets how to avoid economic crises. It is not so difficult to imagine that same student considering how the “Washington Consensus” might benefit Venezuela. It is ironic that the very institution which makes a claim towards developing economic and financial literacy winds up offering a such reductive, ideologically and politically motivated image of how the financial system works, how societies may be different, and how each informs the other. At best, these comic books are lazy and uncreative, their authors could not conjure up a civilization which does not operate on market principles, and does not need American help. At worst, they are ideological technologies, designed to discourage social thinking in favor of economic reductionism.
John P. Antonacci is a sociology PhD student at SUNY Binghamton, where he studies human geography, social ecology, and political economy.