Money lets people convert everything to almost anything they want.
Money is superior to bartering because when there are many strangers, the system doesn’t work. Only a small range of products can be exchanged through a barter system, but a complex economy of goods and services cannot.
Some societies tried to find a way around money by centralizing their barter system. The most famous experiment was the Soviet Union, and it was a colossal failure.
‘Everyone would work according to their abilities, and receive according to their needs’ turned out in practice into ‘everyone would work as little as they can get away with, and receive as much as they could grab’.
Other experiments were made, some a little more successful, but most countries preferred to use money. Money was created multiple times in different places, but it didn’t need a technological breakthrough, it needed a mental revolution. As long as people could develop a shared imagination, money could work.
Money I whatever people use to represent the value of things to exchange goods and services, it is not limited to coins or banknotes.
For thousands of years, philosophers, thinkers and prophets have besmirched money and called it the root of all evil. Be that as it may, money is also the apogee of human tolerance. Money is more open-minded than language, state laws, cultural codes, religious beliefs and social habits. Money is the only trust system created by humans that can bridge almost any cultural gap, and that does not discriminate on the basis of religion, gender, race, age or sexual orientation. Thanks to money, even people who don’t know each other and don’t trust each other can nevertheless cooperate effectively.
Money is built on collective trust. When someone sells something valuable for money, they trust that the system will not betray them.
Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised.
This trust was created by a complex mix of politics and economics. The reason you believe in money is because your neighbour does, and they believe in money because you do. And you all believe in money because the government and demands that you pay taxes.
Societies have tried to hold on to ‘priceless’ things, like loyalty, love, and morality. These things don’t belong to the market, but money has always tried to break through these barriers. Parents have been forced to sell their children into slavery to buy food. Christians have murdered and stolen – only to buy forgiveness from the church, and tribal lands were sold to foreigners for entry into the global economy.
Money has an even darker side. For although money builds universal trust between strangers, this trust is invested not in humans, communities or sacred values, but in money itself and in the impersonal systems that back it. We do not trust the stranger, or the next-door neighbour – we trust the coin they hold. If they run out of coins, we run out of trust. As money brings down the dams of community, religion and state, the world is in danger of becoming one big and rather heartless marketplace.
Today, we take it for granted that the market always prevails, but this is naïve.
Brutal warriors, religious fanatics and concerned citizens have repeatedly managed to trounce calculating merchants, and even to reshape the economy.
The unification of mankind can thus not only be attributed to money, there must be something else. We cannot forget about the crucial role of steel.
Read Sapiens
If you are interested in reading books about unmasking human nature, consider reading The Dichotomy of the Self, a book that explores the great psychoanalytic and philosophical ideas of our time, and what they can reveal to us about the nature of the self.