In economics textbooks, the origin of money is often described as a replacement for barter. Silly examples are given: if you raise cows and need a hammer, you have to find someone who has an extra hammer and specifically wants cows. You might travel all across town with a cow in tow, searching for someone who wants to trade, and then have to calculate a fair rate of exchange between hammers and cows. Although … how do you trade a fractional hammer, or cow?
But barter is a myth.
As with “the tragedy of the commons” – a concept that is highly relevant to the way modern corporations treat the environment, but which was first described in a research paper wherein a mathematically-adept-yet-philosophically-inept white supremacist concocted a story about indigenous shepherds over-exploiting a shared resource in order to justify capitalism’s World-O-Fences (“Just like the old world, except that you can’t go here, or here, or here!”) – economists have a tendency to tell stories about what they believe should have happened in history, without necessarily checking whether their concoctions resemble what actually occurred.
Across the globe, the long-distance transfer of resources predates the apparently invention of money by many thousands of years. Possibly by millions of years, depending on your interpretation of the Makapansgat pebble. Many of these resources may have been carried from place to place by individuals who continued using them, but some – things like flint, volcanic rocks, shells, bones, clothes, etc. — presumably ended up in the hands of new people. Indeed, when items like these are found far from their place of origin, they are often cited as archaeological evidence of trade (although we don’t have a good sense of how mobile individuals may have been over their lifetimes – festival grounds in the center of North America may have drawn ancient people from as far away as both coasts for important celebrations). Rocks or bones that came from places other than where modern archaeologists found them are often assumed to have been bartered.
However, a more likely origin story for money is that it was created to replace trust, not barter. Before money, if you raised cows and needed a hammer, you might ask for a hammer. And that hammer might well have been lent or given to you, free of charge, by someone who trusted that you would also contribute to the community when someone came to you in need.
With traditional exchange like this – gifts and mutual aid – you have to trust many people. You have to trust that most people whose help you might someday need will actually agree to help you. And although there would not have been a meticulously written ledger documenting everyone’s debts or generosity – this sort of exchange also predates the invention of writing by many thousands of years – people would probably have a sense of everyone’s contributions. After all, vampire bats manage a similar accounting of which other members of their local group have either helped them or needed help from them in the past, and a vampire bat’s entire brain weighs about as much as a few paperclips.
When money replaced trust, we gained efficiency. People could conduct economic exchanges with others whom they had never met, about whom they knew nothing, and not worry that they would be taken advantage of.
But trust wasn’t simply ensuring that someone who needed a hammer could get one. As a medium for exchange, trust was interwoven with both access and restraint. A trust-based system of exchange allows you to get a hammer when you need it, and prevents you from taking all the hammers when you don’t need them.
Money demands no such restraint.
In Braiding Sweetgrass, Robin Wall Kimmerer discusses economics in terms of the myth of the Windigo, a monster of addiction and appetite, a corporeal embodiment of desire, as in the line from Frank Bidard’s poem “The Third Hour of the Night”:
Understand that it can drink till it is
sick, but cannot drink till it is satisfied.
In Kimmerer’s words:
We seem to be living in an era of Windigo economics, of fabricated demand and compulsive overconsumption. What Native peoples once sought to rein in, we are now asked to unleash in a systematic policy of sanctioned greed.
…
Indulgent self-interest that our people once held to be monstrous is now celebrated as success. We are asked to admire what our people viewed as unforgivable.
…
Ecological economists argue for reforms that would ground economics in ecological principles and the constraints of thermodynamics. They urge the embrace of the radical notion that we must sustain natural capital and ecosystem services if we are to maintain quality of life.
But governments still cling to the neoclassical fallacy that human consumption has no consequences. We continue to embrace economic systems that prescribe infinite growth on a finite planet, as if somehow the universe had repealed the laws of thermodynamics on their behalf.
Perpetual growth is simply not compatible with natural law, and yet a leading economics like Lawrence Summers, of Harvard, the World Bank, and the U.S. National Economic Council, issues such statements as “There are no limits to the carrying capacity of the earth that are likely to bind at any time in the foreseeable future. The idea that we should put limits on growth because of some natural limit is a profound error.”
In a trust-based system of exchange, no person would be allowed to squander a community’s source of water. With money, though, California will never run out of water, no matter how little rain falls in the area, no matter how lush the lawns of wealthy individuals. Money can purchase water from elsewhere, purchase the fuel to transport it, purchase enough that it need not be thought about again.
Trust is less efficient than money. But trust did more than enable exchange. Trust held communities together.
And yet, cryptocurrency gurus argue that our world needs even less trust. In “The Price of Crypto,” Trevor Jackson writes that:
[Cryptocurrency “Ethereum” founder] Buterin argues that one of the most valuable properties of his institutional design is “trustlessness.” Trust, he believes, is “the use of any assumptions about the behavior of other people.” Again and again, he argues that crypto is a way of building a trustless utopia: rational, with institutions and actors replaced by markets, and never dependent on knowing or assuming anything about anyone else.
But at the same time, he, like the rest of the crypto ecosystem, constantly invokes “community.” The community makes decisions; the community confers legitimacy; forks and policies are accepted and adopted by the community.
How do you build a community without trust?
You don’t: Buterin has confused community with investors, users, and buyers. He cannot conceive of a community that is not bought, and he thinks the problem with other communities is that they are not run according to efficient market logic.
In a world of money, rather than trust, different individuals are governed by intrinsically different rules. Presumably you have heard the story about child care centers charging late fees to induce parents to arrive on time. Instead of causing people to arrive on time, though, late fees increased the number of parents who arrived late. The parents were no longer breaking a trust-based promise if they arrived late; instead, they were simply paying more money for additional time.
Or consider the sultry photographs that many people exchange with romantic partner(s). If someone wanted to sign a non-disclosure agreement saying that they’d have to pay a ten-thousand dollar fine if they posted my pictures to the internet, I’d be much more dubious than if someone simply asked me to trust them. Money introduces the idea of fair exchange to misbehavior. By paying that ten-thousand dollars, they’d feel justified to do whatever they wanted.
In the novel Trust by Hernan Diaz, we see what money can do to our perception of reality. Diaz tells the same story again and again, layering voices who have different access to resources and thus a different expectation of being heard and believed by the world around them. Money can veil the harms caused in its own procurement: we have hospitals, libraries, and foundations named for those whose unslaked appetites scorched the world around them.
A minute of our time – indeed, our very lives – are revalued based on our allotment of monetary wealth. But money cannot replace a world destroyed. The Magic the Gathering card “Reparations” includes the words, “Sorry I burned down your village. Here’s some gold.”
Frank Brown Cloud 