by Kabir Sehgal
One of these ways is to see money as alive. It lives. It sleeps. It breathes. It adapts. That’s because we as humans are ever changing. Ever since the creation of money, we have adapted it to better fit our needs, from precious metals to plastic. But just as we think we determine the form of money, it also shapes us. Our skin conductance increases at the thought of money. Our brains register money as a stimulus, so much so that the brain scan of someone about to receive a hit of cocaine is virtually indistinguishable from someone about to gain money. Money has done to us what Pavlov did to his dog: Anticipated gain stimulates and conditions the brain.
Some scholars contend that money may have led to the creation or spread of religions. As coinage was invented in Greece, India, and China, leaders like Pythagoras, Buddha, and Confucius gained legions of followers. Dealing with money is a central theme of many religious lessons. In the Gospel of Matthew, eight of the ten parables reference money or wealth in some way. That money may shape our religious beliefs and rewires our neural circuitry demonstrates its omnipresent and dynamic force on our lives. It intrudes in almost every part of our lives from birth, presenting gifts to a newborn; to death, receiving an inheritance; to the hereafter, buying indulgences to save the soul.
I personify money with the subtitle The Rich Life of Money and How Its History Has Shaped Us to highlight its influence. I also invoke a biographical device to serve as the organizational skeleton for this text. This book, this life of money, is divided into three sections: Mind, Body, and Soul.
In Mind, I ask “Why?” That is, why do we use money? I answer this question by using biology, psychology, and anthropology. In chapter 1, I travel to the Galapagos Islands in search of the origin of exchange. It’s a peculiar place to start, but before examining money, one must understand the nature of exchange. On these islands, I meet scientists who teach me about the evolutionary biological process and how exchange is fundamental to life on this planet. I boil things down to the cellular level to understand why organisms exchange with one another and enter into symbiotic relationships—usually to obtain food and resources to survive. In the natural world, energy functions as currency. But in the human world, money is also a primary currency. In order to deal in money, humans must be able to think symbolically. Thus I trace the evolution and expansion of the brain, and how the first signs of symbolic thought are found in cave drawings that were made tens of thousands of years ago.
In chapter 2, I go inside the brain, examining the psychology and neuroscience of financial decision making. The subconscious operates quietly beneath the surface, making financial decisions even when we think we’re not. For example, the weather impacts how much one tips a waiter. The type of music playing in a store influences what type of wine one buys. There may even be a gene that determines whether someone is predisposed to making riskier financial decisions. The promise of neuroeconomics, the nexus of neuroscience and economics, may tell us more than conventional economic models ever did about human behavior. Neuroeconomics may reveal why we use money in the first place—or at least how to be more aware of the hidden forces guiding our financial decisions.
In chapter 3, I examine the social brain, the collective wisdom of crowds. Some anthropologists contend that debt, not barter, was the forerunner to money. I discover how various cultures deal with social debt or gifts: the Maori people of New Zealand, residents of the Trobriand Islands in the Solomon Sea, the Kwakiutl people of the Pacific Northwest; even netizens who use Napster and Kickstarter. I examine the edge of where the gift economy ends and the market economy begins. When market values reign supreme, and everything has a price, it can lead to the dark side of debt. When social debt is transformed into market debt, it may result in disgusting practices like debt bondage and slavery.
In Body, I ask “What?” That is, what is money? I answer this question by focusing on the physical forms of money throughout the ages, and also on the possible futures of it. Chapter 4 is the story of hard money, made from precious metals. I visit the gold vault beneath the Federal Reserve Bank of New York and see the elaborate measures the government takes to safeguard yellow metal. I trace the origin of metal as money from ancient Mesopotamia to ancient Egypt. In the seventh century BC, coinage was invented in Lydia. It spread throughout Greece and the Mediterranean world in the subsequent centuries. During the Roman Empire, coins were debased and manipulated for political reasons. In altering the physical form of money, man was also trying to shape society and control others.
Chapter 5 is the story of soft money, which is not linked to metal. I discover the early uses of paper money in tenth-century China. It was used widely by Kublai Khan to unify his empire during the thirteenth century. But paper money is only one part of the modern monetary system. Eighteenth-century France is an example of how paper money can reboot a flagging economy. John Law’s monetary system may have lasted only four years, but it achieved a financial resurrection, thanks in part to soft money. The modern financial system relies on soft money, so I briefly survey the history of the dollar until it was unhooked from gold in 1971, and explain how the Federal Reserve and banks work together to create money today.
Chapter 6 is the story of the future—the good, the bad, and the incredible. If the world suffers an economic cataclysm, we may return to using goods and services. In the 2008 financial crisis, the price of gold soared. Many returned to bartering, the exchange of hard commodities, instead of just using money. If the world avoids disaster, it’s likely that money will be increasingly plastic and invisible. In the emerging world, there is a lack of credit cards but a plethora of mobile phones. The future of money will be realized when mobile phones become the preferred method of payment for billions around the world. The future of money may also resemble science fiction: the rise of a “neural wallet” in which everyone is plugged into a grid that enables people to trade ideas and energy.
In Soul, I ask “How?” That is, how should we use money? I answer this question by turning to the humanities, such as religion and art. Money isn’t just a symbol of value but a symbol of our values, depending on how it’s used and expressed. In chapter 7, I highlight how major religions provide ample instruction on how to handle money. I recount lessons from the Bible, Torah, Koran, and Vedas. In all these scriptures, there seems to be a spiritual logic of less is more or enough is enough when it comes to material wealth. For example, Jesus advises a rich man to sell his earthly treasures and follow him. In Hinduism, it’s through experiencing artha, or material pleasures, that one is awakened to the need to renounce it and achieve moksha, or liberation.
In chapter 8, I travel with an archaeologist to rural Bangladesh in search of a lost civilization that Ptolemy once described. It’s through a hoard of coins discovered at the ruins, the symbols on the money, that one can identify this civilization. The symbols, the art, help to elevate money to its valuable, monetary status. They also express a nation’s identity and cultural history. For my job I have traveled more than 700,000 miles to more than twenty-five developing nations, from Turkey to Thailand, South Africa to Sri Lanka. I use my spare moments to meet with coin collectors. I ask them which coins best represent their countries, and what the symbols on these coins mean. This book begins with a historical explanation of symbolic Paleolithic cave art, and it ends with a geographical safari in which I interpret the creativity found on monetary art.
This book does not advance a grand theory, nor does it provide completely unique perspectives. It synthesizes the work of others that is detailed in the selected bibliography, and to whom I am grateful. Indeed, there is an infinite amount of topics that I could have included, or the subjects that I did choose could have been investigated with more depth. Each chapter could be the subject of an entire book. But every chapter is meant to spark your curiosity, not satisfy it.
The financial crisis ignited my curiosity and exploded my perception of money. It caused me to think about an ancient topic in new ways, to hear the different frequencies of money. Maste
r musician Duke Ellington’s adage, “No boxes,” became my mantra. My quest led me to examine money from cell to community, from life to death, from inner spirit to outer space. I blurred the lines among sciences, social sciences, and the humanities. I traversed every hemisphere, over twenty-five countries. I explored its past and dreamed about its future. This book presents a multidimensional and interdisciplinary portrait of currency through the ages. It seeks to deepen your understanding of the history of money, and to show how it continues to shape our future in often imperceptible ways. I hope this book will explode your perception of money, and help you coin new ways to think about it.
PART I
MIND
The Roots of an Idea
CHAPTER ONE
It’s a Jungle Out There
The biology of exchange
I keep the subject of my inquiry constantly before me, and wait till the first dawning opens gradually, by little and little, into a full and clear light.
—Isaac Newton1
But man has almost constant occasion for the help of his brethren.
—Adam Smith2
But several seedling mistletoes, growing close together on the same branch, may more truly be said to struggle with each other. As the mistletoe is disseminated by birds, its existence depends on them; and it may metaphorically be said to struggle with other fruit-bearing plants.
—Charles Darwin3
An example of symbiotic exchange in the natural world: fish cleaning a green sea turtle.
The bay buzzed with underwater activity as sea lions and colorful fish rushed past me. A current of frigid water enveloped me as I swam in the direction of the ocean. Looking for a warmer spot, I whirled around and headed for a narrow crevice that was receiving more sunlight. But instead I scratched my foot on a jagged boulder, and stayed put—waiting. I held on to black lava rock that had been covered with a bed of slimy algae. And then I saw it.
My quest to understand the origin of money began underwater. I wasn’t looking for the booty of a sunken pirate ship, but another type of treasure. My friend took a deep breath and dove eleven feet to the bottom of a ridge, where she scooped up a small dollar-green-colored object with her bare hands. She surfaced and swam to me so that I could see it more closely.
“This is what we were looking for,” she said.
She would certainly know, as marine ecosystems are her field of expertise.
My friend’s name is Rachel Gittman. And for her, it ain’t about the money.
“Nobody goes into science for the money,” she says, laughing. “I didn’t have much to begin with.”
Rachel grew up on a farm in Prince George County, Virginia, where she spent much of her time outside, in nature, exposed to the elements. “As a child, I was fascinated by nature and wanted to understand more about the natural world.” Now in her late twenties, she is a PhD candidate in ecology at the University of North Carolina at Chapel Hill. And she would help me understand more about the world, and more about money.
But in order to learn from her, I had to trek to her.
I began my search for the roots of money in a peculiar place. An obvious place to start my quest to understand money would have been the Great Rift Valley in East Africa, to search for artifacts that were used as currency, and where many early human fossils have been discovered; or in western Turkey, once the site of the Kingdom of Lydia, where coinage was likely invented in the seventh century BC. But to start my quest in these places would be like tuning in to a baseball game in the eighth inning. NASA calculates that eight hundred generations span the thousands of years of human existence. Of these, more than six hundred resided in caves and only the last few generations saw words in print.4 Put another way, humans have existed for 0.004 percent of earth’s history.5 I voyaged to a place where modern humans have made a smaller imprint, where I could observe the organic origin of exchange.
I found myself in the Pacific Ocean, near the equator, far from the Ecuadorian coast, in an undulating motorboat appropriately named Destiny. I was journeying to Isabela Island, part of the Galapagos Islands, to meet Rachel.
I picked these islands for a reason. They were the same islands that inspired Charles Darwin to arrive at his theory of evolution by natural selection. He wrote in his book On the Origin of Species that his journey aboard the HMS Beagle and his observations of the Galapagos would “throw some light on the origin of species—that mystery of mysteries.”6 An expedition to the Galapagos might also throw some light on the roots of money, and specifically, the nature of exchange.
It was a picture-perfect day under an enormous blue sky, with an ocean breeze to soften the heat. Rachel met me at the dock, wearing a Carolina-blue UNC baseball hat, similar-colored T-shirt, black shorts, and sunglasses. She was in the Galapagos as part of a research project to study marine life in mangrove ecosystems. We ambled down a sandy road, and after thirty-five minutes, my lesson began.
“Exchange happens everywhere on these islands,” said Rachel. “From the bottom of the food chain to the top.”
So we started at the bottom.
We walked through the mangroves, over a sleeping sea lion (and its poop), under a blue-footed booby that had taken flight, around three dozen marine iguanas, until we arrived at Concha de Perla, a small bay in the southeast part of Isabela Island. We put on our snorkels and flippers—and dove in.
When Rachel surfaced, she held in her hand a dollar-green sea urchin. She had told me about them, but I couldn’t find one on my own—I benefited from her expertise. This would be my first lesson of how exchange happens in the Galapagos. The sea urchin needs energy to survive, so it eats algae. The sea urchin is a herbivore and grazes on the algae, transferring the energy to itself. It’s not the only organism that feeds on algae, as the damselfish competes with the sea urchin. A damselfish sometimes picks up a sea urchin by its spine and takes it elsewhere, away from the algae.7 But this is an example of how one organism benefits at the expense of another.
To find an example of symbiosis, when the exchange of two different organisms benefits both, I only had to submerge and look around. Resting on a lava rock was a sea turtle with a shell two feet in diameter. It had exposed its fins so that five wrasse fish could eat parasites on it, cleaning the turtle. Left to fester, the parasites could cause to form on the turtle’s shell a calcium carbonate barnacle that doesn’t usually harm it, but some species of barnacles have been known to cause damage. In some cleaning stations, a cleaning fish even swims into the mouth of the larger fish being cleaned, so that it can remove parasites in hard-to-reach areas.
Rachel explained to me that symbiosis is a crucial component of marine ecosystems, as many organisms rely on each other to survive and reproduce. She told me about the exchange between coral polyps and zooxanthellae. Though it’s difficult to observe with the naked eye, she walked me through it. Corals form hard skeletons by secreting calcium carbonate, which then form reefs that serve as the habitat for thousands of marine species. Zooxanthellae (pronounced zo-uh-zan-THELL-ee) are microalgae that live in the tissue of corals. Through the process of cellular respiration, the coral produces carbon dioxide. The zooxanthellae use carbon dioxide in photosynthesis. The by-products of photosynthesis are oxygen and organic compounds that provide energy that the coral needs.8 The zooxanthellae supply the coral with food. The coral provides the zooxanthellae with shelter.
My quest to understand money begins with asking why we use it in the first place. To use my baseball analogy again, it’s difficult to determine the objective of baseball just by looking at a bat. The aim of baseball is to score more runs than the other team. The bat is a tool that helps accomplish this. Similarly, a dollar bill is an instrument that facilitates exchange.
At the most basic level, humans exchange with one another to acquire the items that we need to survive, like food and shelter. While money is a human invention, all organisms exchange in order to survive. We as humans rely on other organisms to stay healthy, like microorgan
isms found on our skin and inside our mouth. More than 100 trillion live in the intestine, where bacteria help digest nutrients, metabolize energy, and synthesize vitamins. The bacteria in our gut may also keep out parasitic bacteria.9 Our intestine provides bacteria a place to live, and it helps keep us well.
In the parlance of Dr. Seuss, exchange happens on a boat, with a goat, in a hut, and in the gut. It is everywhere and so much a part of life on earth, we often don’t notice it. From the beginnings of life, when sperm hits the egg, to the end of it, when maggots feast on a corpse, exchange is at work.
To be sure, there is a distinction between exchange that happens between humans and that which happens among other organisms. The difference is that the human brain makes us aware of exchange. It enables us to think tactically about it. As the human brain became capable of symbolic thought, it was possible for us to see the potential value in things. Commodities like salt, barley, and cacao were early forms of currency. As humans began to produce more than they could consume, a surplus handful of barley became an item that might be traded to acquire something else. The surplus became a symbol of value. Its value was realized when it was exchanged for something else. It became currency.
It is easy to understand the transfer of energy taking place in an exchange of one organic commodity for another, when they are then consumed naturally as food. There’s no denying that the need for energy serves as a primary catalyst for exchange among all species, both humans and nonhumans. The difference, again, is that humans can trade energy tactically, seeing the symbolic value of it and turning it into realized value. Early humans who traded food items like meat and barley were exchanging energy but in a new way. That they exchanged the energy-rich commodities in a more deliberate manner points to the evolving nature of humans.
