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Coined: The Rich Life of Money and How Its History Has Shaped Us

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by Kabir Sehgal


  Evolutionary economist Haim Ofek asks in his masterful book Second Nature: “Was exchange an early agent of human evolution, or is it a mere de novo artifact of modern civilization?”10 He raises the possibility that exchange is an evolutionary force: Organisms that exchange are more likely to survive and reproduce, and pass down an “exchange trait” to future generations. Exchanging—working together—is evolutionarily advantageous. And there is compelling evidence that social people actually live longer.11 Later in his book, Ofek reasons that human exchange may be a continuation and advancement of that found among the earliest organisms. The development of exchange from microorganisms, to the animal kingdom, to Paleolithic tribes, to Wall Street traders reveals a fascinating progression of an evolutionary force.

  Ofek notices patterns in how organisms of the same species exchange. Ants and humans, for example, both rely on division of labor in order to more efficiently accomplish a task. Some members of the same species forage for food and others rear the young. Individual organisms that are responsible for certain parts of the larger task become specialists in that part. A specialist creates specific tools in order to accomplish this task.

  In the case of humans, we became aware that exchange increases our chances of survival. This awareness would lead to the creation of tools that fostered cooperation, maybe even to outcompete other species. At first these tools would be used to accomplish a simple task, but the brain’s capacity for symbolic thought enabled humans to see these instruments as more than just physical objects. Perishable commodities gave way to nonperishable items like agricultural tools, weapons, and jewelry, which all functioned as early currencies. Humans could see the symbolic value of these tools—they could be exchanged for other valuable items. As the human brain became more sophisticated, and as civilization became more complex, there would be a need for a uniform and universal tool that would facilitate exchange more broadly. This tool was money.

  It’s an intriguing theory—that exchange is part of our evolutionary algorithm. And, ultimately, money is an output of exchange. Ofek’s theory provoked me to consider an alternative, biological explanation for why we use money in the first place. To understand the basis for money, I would need to learn about the origin of exchange.

  In the Beginning

  Long before money was invented or humans roamed the earth, organisms exchanged with one another in order to survive. Some 3.8 billion years ago, the first signs of life emerged: single-celled prokaryotes, such as bacteria that lack nuclei. Two billion years ago, multicellular eukaryotes appeared. These cells make up fungi, plants, animals, and people. It was through symbiosis that eukaryotes formed. Eukaryotes developed when one prokaryote ingested another prokaryote. Instead of being destroyed, the smaller cell stuck around forever as a specialized structure known as an organelle, like a houseguest who never moved out.

  The organelle in question is the mitochondrion. Biologists suspect it used to be a prokaryote. Mitochondria resemble prokaryotes and reproduce like them, dividing independently of the greater cell, which means it’s semiautonomous, but it relies on the cell for many of its proteins.12 Eventually mitochondria lost their ability to live outside the greater cell. The family adopted the houseguest. Thankfully, it does some chores.

  One of those chores is providing food for the family. The mitochondria provide energy to the greater cell. It has two membranes, which are like walls in a house. One membrane is folded to boost its surface area, so that it can produce more energy in the form of adenosine triphosphate (ATP). All organisms need energy to reproduce and operate. A molecule found in all living cells, ATP delivers energy from foods to the cell. Like the coral and zooxanthellae, the cell provides shelter, and the mitochondria supply energy.

  This theory about the creation of eukaryotes is known as symbiogenesis, the union of two cells to create one, and it explains the basis of earthly life. Russian botanist Boris Mikhaylovich Kozo-Polyansky first proposed symbiogenesis in the early twentieth century.13 It’s a plausible and widely accepted explanation of how eukaryotes developed. Kozo-Polyansky’s theory implies that symbiosis, working together, is foundational to the life of all multicellular organisms.

  The Garden of Symbiosis

  A discussion of symbiosis seems incomplete without including that found between two multicellular organisms: insects and plants. Sure, some plants like ragweed and grass rely on wind rather than insects to spread their pollen, but that’s inefficient. These plants have to produce excess pollen so that the wind will carry enough to exactly the right flower.

  Plants need insects to reproduce. Insects need plants to eat. Flowers advertise with pleasant aromas and colorful pigments, inviting insects, as well as birds and bats, to visit. Flowers furnish them nectar, which is a sugary water solution derived from sunlight. A sampling of nectar shows quantities of sugar that range from 18 percent to 68 percent. Nectar, with its saccharides, proteins, amino acids, and enzymes, provides energy for insects to persist. Bees turn nectar into honey, which is in essence conserved energy, like a reserve generator, which switches on during winter when flowers have wilted.

  Bees need not only nectar but the nutrients stored in the amino acids of pollen. Produced by the anthers of a flower, pollen is the male fertilizing agent. Many of the twenty-five thousand species of bees use nectar and pollen as the sole type of nutrition for their young. Bees have body hair that helps collect pollen. The pollen is stored in the corbicula, a type of pollen container connected to a bee’s back leg. Bees transport pollen like couriers making an express delivery. Trade terms of the flower: I’ll give you food. You deliver my package.

  This relationship has been studied dating back to at least the eighteenth century. The large body of research has led many scientists to conclude that it’s impossible to imagine a world in which plants and insects existed without each other. The symbiosis is an example of coevolution, a mutually beneficial partnership. The history of this exchange goes back more than 100 million years, to when specimens of female insects were found to be carrying pollen, a sign that they were likely searching for food for their young.14

  Bees and flowers—like the cell and mitochondria, coral and zooxanthellae, sea turtles and wrasses, and humans and intestinal bacteria—help each other to survive.

  The Currency of Nature

  In all these examples of symbiosis, energy is being exchanged. It can be said that energy is the currency of nature.15 To highlight the role of energy in symbiosis, consider again the electric exchange between bees and flowers. When a bumblebee lands on a flower, it buzzes in a higher pitch to shake the pollen out of it. One estimate is that 8 percent of flowers are pollinated using this method.16 The bee’s flapping wings even jolt the flower with electricity. A flower has a negative charge compared to the air surrounding it. Bees have a positive charge. When a bee lands on the flower, negatively charged pollen attaches to the bee.

  Researchers decided to test whether electricity actually makes a difference in the symbiotic relationship between flowers and bees. They created a flower bed with fake flowers. Half the flowers had a solution akin to nectar; the others had a repellent one. The bumblebees foraged randomly in the flower bed. When the researchers introduced a negative charge to certain flowers, bees visited them more frequently. When the charge was removed, the random foraging resumed. After the bee departs, the flower keeps the positive charge for more than a minute, as if to hang a “Do Not Disturb” sign for the next guest.17

  Bees and flowers are also part of a greater exchange that encompasses all living organisms. The grandest example of symbiotic energy transfer is that of photosynthesis and cellular respiration. Consider the chemical reaction of photosynthesis:

  6H2O + CO2 + light particles C6H12O6 + O2

  In the first part of the reaction, there are water (H2O), carbon dioxide (CO2), and light particles. Water enters the plant through its roots. Carbon dioxide is absorbed by a green plant’s leaves, like those that the bee visits. They combine with invi
sible particles of sunlight called photons, which are captured by pigment molecules such as chlorophylls in green plants. When combined, they produce glucose, C6H12O6, to be used immediately or saved for later to create more complicated foods like fruit. Oxygen (O2) is a by-product of photosynthesis. Though this is a basic explanation, photosynthesis is essential in creating oxygen and energy, the currency of nature. All food chains start with organisms that create organic molecules from inorganic material—like the algae I swam through in Concha de Perla.

  Cellular respiration is photosynthesis in reverse. It’s the process of breaking down foods to release energy. Animals ingest organic molecules like fruits and vegetables and, with oxygen, convert them into carbon dioxide and ATP. Consider the chemical reaction of cellular respiration:

  C6H12O6 + 6O2 6H2O + 6CO2 + ATP

  Glucose breaks down through a process called glycolysis into molecules known as pyruvates, which are processed in the mitochondria, which emit carbon dioxide. The energy found in glucose is transported through an electronic transport chain that creates oxygen as a by-product. The chain eventually yields ATP. Photosynthesis and cellular respiration constitute a virtuous cycle of symbiotic exchange that makes life as we know it possible.18 It converts sugar molecules into energy usable by organisms like bees, converting a foreign currency into a more usable one.

  Energy and money are both currencies that circulate and flow. The word currency comes from the Latin word currere, which means “to flow” or “to run.”19 Both energy and money are valuable, and organisms compete to obtain them. Though the earth absorbs a significant amount of solar energy, only a small percentage makes it to organisms in need. So there is intense competition for it: Some plants grow taller to attract more sunlight, shading and starving other plants. Remarkably, the starved plant informs its stem to grow more quickly, a response that botanists call “shade avoidance syndrome.”20

  If an organism must use energy immediately after obtaining it, the creature is dangerously dependent on the source. If the source is interrupted, the organism may die. That’s why many organisms store energy. Whales amass fat for their protracted journeys. Birds and squirrels store food in caches, like a savings account to draw upon in times of need. Storing energy allows organisms a degree of sureness in the face of uncertainty. Because it’s valuable, desirable, and storable, energy bears a similar role to money in the human world.

  Money may be an evolutionary substitute for energy. As our ancestors evolved from hunting and gathering food to cultivating and preserving it, humans produced more than they could consume. The surplus took on symbolic importance. An extra barrel of salt mined was more than a mineral to be consumed. It could help preserve other food, other sources of energy. One of the first civilizations of the Neolithic Age in 9000 BC was Jericho, and it became a trading center for Dead Sea salt. Humans were eating more meat like pigs and cattle, and salt preserved it.21 There was a strong demand for salt, so it became a currency.

  Salt had gone from being just a rock, and a way of conserving food, to an item that could obtain more of it. Salt blurs the line between commodity and currency because it has historically been used as both. Instead of humans consuming the mineral immediately, like an animal might, they thought about what else they could do with it. They could see that salt could represent something else, like pepper. By focusing on the commodity aspect of salt, one can see how one form of energy is exchanged and turned into another:

  C C

  The C stands for “commodity.” In this barter trade, both the salt and the pepper are represented by C. You trade salt for pepper. You are still trading commodities that fulfill their evolutionary purpose of sustaining humans and helping them survive. But, like energy, the commodity has been converted from one form into another by trading it. In a more advanced society that uses money, the exchange is still a conversion of energy forms. In his book Capital, volume 1, Karl Marx considers the conversion of commodities into money as the most basic form of monetary exchange:

  C M C

  Again, the C stands for “commodity” which is sold and turned into M, or money, like coins. This money is used to buy another commodity, like pepper.22 As you will see, the human awareness that C was convertible and exchangeable was a first step in the creation of M. But I use this example to highlight how a source of energy like barley can be converted into different forms through exchange. Money, too, can be converted into various forms. Even today, money is used to obtain perishable commodities, which in essence are forms of energy that we need in order to live. Though modern money has been abstracted from its evolutionary role, it is still the tool we use to acquire the calories that we need.

  The Human Connection

  Darwin’s phrase “the survival of the fittest” is often used to describe the competition with others. For basic necessities like food to a rank in the social ladder, humans struggle against others at times. Darwin adopted the phrase at the suggestion of British philosopher Herbert Spencer, who believed evolution was a universal theory. Spencer believed in what later became known as “Social Darwinism,” that evolution shaped not only humans but society: A simple society evolved into a more complex one. A more pernicious interpretation is that the stronger or more “fit” persons will reap more rewards.

  However, Darwin meant the phrase as a broad explanation to account for the biological development of all species—not as a description or justification of human society.23 Instead, Darwin recognized that symbiosis and cooperation were critical to survival. He found that organic cells were microcosms, systems that work together. He even advanced a theory of pangenesis, in which tiny particles called gemmules were marked with data and fused with reproductive cells. The fusion of cells was how parents transmitted familial instructions to their offspring, such as beak size and eye color.24 His theory was later replaced with insights into genetics, but it underscores Darwin’s realization that cooperation is fundamental to life. In The Descent of Man, Darwin takes it further, positing that sympathy within the same species is an output of evolutionary forces: “[Sympathy] will have increased, through natural selection; for those communities which included the greatest number of the most sympathetic members, would flourish best and rear the greatest number of offspring.”25

  In his landmark book, The Evolution of Cooperation, political scientist Robert Axelrod concludes that cooperation helps people survive and is therefore evolutionarily beneficial. His conclusion is supported by the results generated from a simulated tournament he ran.

  He used the well-known Prisoner’s Dilemma game in his tournament. Prisoner’s Dilemma starts with you and your friend being arrested. The police question you separately. You face a year in prison, but if you snitch on your friend, your sentence will be reduced. Your friend is offered the same deal. If you both snitch, you will both receive longer sentences. But if you both remain silent, and cooperate with one another, you will both benefit. It’s a dilemma because you don’t know what your friend will choose.

  In 1980, Axelrod planned a computer tournament to see which strategy is best, whether you should cooperate with your friend or not. He assigned points to each of the four outcomes:

  (1) If both you and your friend cooperate, you are both rewarded with three points; (2) if you snitch, and your friend cooperates, then you receive five points, and your friend receives zero; (3) conversely, if you cooperate, and your friend snitches, then you receive zero points, and your friend receives five points; and (4) if you both snitch, you both receive one point. The incentive to snitch is significant: You will receive points regardless of whether your friend snitches or cooperates.26

  Scholars from several academic disciplines, such as evolutionary biology and economics, who were knowledgeable about Prisoner’s Dilemma submitted strategies that were pitted against each other in more than two hundred iterations of the game. The winning strategies remained in the tournament, and the losing ones were discarded. Axelrod writes, “This process simulates survival of the fit
test… At first, a rule that is successful… will proliferate, but later as the unsuccessful rules disappear, success requires good performance with other successful rules.”27 He found that the experts who submitted strategies took too competitive an approach and assumed that the other prisoner would snitch.28

  The winning strategy was known as “Tit for Tat.” Even when contestants were aware that Tit for Tat had won the initial round, they couldn’t beat it in subsequent ones. The strategy calls for cooperation on the first move and reciprocation on subsequent moves. Tit for Tat shows that it pays to cooperate. But if someone attacks you, you should strike back to punish them. But if then the person reverts to cooperation, you should forgive them and cooperate, too. Axelrod recognizes that self-interest is the basis for cooperation. It helps your individual situation if you both cooperate. He writes, “You benefit from the other player’s cooperation. The trick is to encourage that cooperation. A good way to do it is to make it clear that you will reciprocate.”29

  Though Axelrod’s tournament was a theoretical game, it had profound implications. His book has had more than twenty thousand citations across a broad range of academic disciplines, including those who have considered whether cooperation was part of the evolutionary algorithm. At first glance, Axelrod’s results support Ofek’s theory that cooperation is evolutionarily advantageous.

 

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