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

by Kabir Sehgal

  1. Interest costs on travelling goods should be calculated using clocks on planets, not ships. This is because the opportunity cost of trade… is calculated using planet-bound clocks, regardless of what relativity does to a businessman travelling alongside his cargo.

  2. Though long travel times mean prices on trading planets will never reach parity, interest rates will. If they differed, then investors could buy bonds on the more attractive planet, driving its rates back to parity with those on its trading partner.95

  Coming down to earth, in New York City I once arrived at a restaurant and learned that they had flubbed my reservation. I had started to text my friend that he could take his time, when the host looked at me aghast: “Sir, please don’t write a bad review on Yelp. I will seat you right away,” he said. The restaurateur realized that one bad review could turn away hundreds of potential customers. He knew that reputation drives business. It is a type of currency.

  Strategists at companies like American Airlines are trying to leverage our digital interconnectedness to burnish their corporate reputation. The company encourages and rewards customers with large social media followings—in hopes for some positive buzz in return. It occasionally permits those with a high Klout score into the first-class airport lounge.96 Klout is an application that measures a user’s social media influence and assigns a score of 1 to 100. It factors in several social media indicators, for example, the number of Twitter retweets and Facebook likes that you generate. The higher your reputation, the more you profit. This isn’t a dream world. This is our world.

  Science-fiction writer Cory Doctorow takes a reputation-based currency further in his Down and Out in the Magic Kingdom. He imagines a twenty-second-century world in which “Whuffie” is the prevailing currency. A person gains or losses Whuffie by doing something that positively or negatively impacts their reputation. Each person has a brain chip that makes them a node in the greater human network, so everyone knows each other’s Whuffie balance. While implanting brain chips seems like a drastic step, it may be a sign of what’s to come.

  In a dream case, it isn’t just reputation that could function as a currency but thoughts, emotions, experiences, dreams, ideas—any mental content. Remember that brain scans show that money elicits neural activity in many regions of the brain, such as the nucleus accumbens and insula. As long as future forms of currency activate these regions in a similar manner, we will likely continue to perceive it as a symbol of value. As technology advances, from credit cards to mobile payment systems, money becomes increasingly invisible and abstract. One day, maybe man and machine will merge, as to eliminate the “middleman” of physical money altogether, turning neural activity into a currency itself. Surely, if we can embed pacemakers, we could implant payment systems into the body. Instead of a mobile wallet, we may have neural wallets.

  Whether made possible by brain chips, as in Doctorow’s book, or by a linked cloud of all our brains that stores mental content, people could exchange, trade, buy, and sell almost any neural activity—and it could all be authenticated by a decentralized Bitcoin-type protocol. If you were traveling to Paris and wanted to learn French, you could “buy” the knowledge of French from your friend by “selling” her your experience as an Olympic archer. If you wanted a frightening Halloween, you could “buy” the nightmare of a friend; or you could “sell” something she desires, like the memory of a romantic walk on a beach for Valentine’s Day. Maybe instead of trading these memories with others, vendors could create and sell custom experiences that they insert into your mind as memories, like when you kicked the winning goal of the World Cup. This type of currency could radically change how we deal with one another and how we think about our self-identity.

  The neural wallet may even facilitate energy transfers. We could all be “plugged” into a shared grid of energy. If you were hungry, you could buy calories from someone else in exchange for your surplus vitamin D, and your body could be instantly infused with energy. This bears resemblance to the energy currency of the natural world, discussed in the first chapter. When a plant absorbs sunlight or a monkey eats a banana, there is a transfer of energy. Similarly, in this dream case, “money” may simply be what we call neural, chemical, and biological transfers that we’ve always valued and desired—a symbol of value. Exchange would be more “direct,” triggering the same receptors in the nervous system as things we value like money or food. The more money changes, the more it stays the same.

  Obviously, a neural wallet raises concerns, ranging from hacking into someone’s mind, like in the movie Inception, to losing one’s identity. The dream case, without the right safeguards, could devolve into a dystopian nightmare. That’s what happens in the film In Time, in which time becomes the dominant currency. Everyone is born with a digital clock on their arm. After they reach twenty-five, the clock counts down to zero, at which point the person dies. Folks can use their time to pay for daily living expenses like a bus fare or trade it with other people. The rich people hoard their time at the expense of the poor. The richer you are, the longer you live.

  While brain chips and arm clocks seem like they are decades if not centuries away, Ray Kurzweil, an expert in artificial intelligence, believes the blurring of man and machine is already under way: “But when it comes to actually putting computers in your body and brain, nobody protests. We seem to relish merging with machines. We use them all the time. We created this technology to overcome our limitations.”97 When it comes to money, Kurzweil recognizes its universality: “So even though we may radically disagree on some things—like let’s say the US government and Al Qaeda—they both respect money. So it’s remarkable how we have this universal respect for this very esoteric virtual construct.”98 Because everyone uses and respects it, a drastic change to money is sure to have profound effects on humanity. As much as we try to alter money, it may end up shaping us.

  You May Say I’m a Dreamer

  Besides being an amusing thought experiment, imagining the future of money may have real economic consequences. For example, researchers studied why people don’t save enough money for retirement, and found a unique solution to the problem. Many “discount” the future, opting for short-versus long-term gains. With life expectancy among Americans increasing, many are in for a rude awakening and will have to adjust to a lower standard of living in retirement. Researchers discovered a way to prevent such severe discounting—by helping people imagine their future. Using virtual reality, subjects dealt with realistic renderings of themselves in which they appeared many years older. Subjects encountered their future vulnerability: gray hair, wrinkles, and other signs of aging. When asked to allocate $1,000, subjects who interacted with their aged avatar placed twice as much money into savings as those who hadn’t dealt with their aged avatar. In fact, researchers found that in several studies, when people see a future version of themselves, it impacts their behavior, and they don’t discount the future as much as they once did.99

  Imagination leads to implementation. Even if it’s just a short-term effect, saving an incremental ten dollars by cooking at home is a positive outcome for the eventual retiree. These findings leave one wondering whether virtual simulations can be incorporated into financial literacy educational programs to promote saving for retirement.

  There’s been no shortage of imagination when it comes to money throughout history. From iron spits and grains to silver coins and paper notes, money is always evolving yet remaining a symbol of value throughout. Whether it’s a bear, bull, dream, or another case, money will reflect our ever-changing needs and desires.

  In thinking about the future of money, my friend suggested that something might be invented to make us “better” with it: spendthrifts more responsible and misers more charitable. But we don’t have to wait for new technologies to induce these modifications in behavior. While the instrument of money is continually changing, the way in which we use it may remain constant—as long as we remember that money can be a symbol of our values
.

  PART III

  SOUL

  A Symbol of Values

  CHAPTER SEVEN

  Angel Investors

  Religion and money

  For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith, and pierced themselves with many a pang.

  —1 Timothy 6:101

  Ben Zoma said… Who is rich? One who is happy with what one has, as it says: “When you eat what your hands have provided, you shall be happy and good will be yours” (Ps 128:2).

  —Mishnah, Pirke Avot2

  O Bhagavati—who resides amidst lotuses, holds the lotus bloom in her hands, wears white resplendent garments, adorned with fragrant garlands, [Lakshmi], pleasing to the mind, and blessing the three worlds with plenty—shower your benefaction to me.

  —Kanakadhara Stotram, verse 153

  Lakshmi, the Hindu goddess of wealth and auspiciousness.

  I had never met a leper before. But here I was surrounded by several of them at Nirmal Hriday, or “Home of the Pure Heart.” It’s also known as Mother Teresa’s Home for the Dying & Destitute in Kolkata, India. Established in 1952, it is a small hospice for thousands of poor people who are found languishing in the streets. Someone dies there almost every day.

  I arrived on an overcast autumn evening. The sick men and women had been gathered into separate areas for supper. The men were dressed in teal shirts, pants, and short-sleeved black sweaters. They were seated close to each other on benches. Near me was a man without legs, quivering on the ground while yellow foam formed underneath his lips. His eyes were fixed in a thousand-yard stare. Another man in a wheelchair began to cough violently, spitting bits of idli sambar, rice cakes and vegetable stew, onto the floor. One of the eight volunteers rushed to remove the food from his mouth so he wouldn’t choke. He put his finger in the man’s mouth, only to have it bitten.

  Seated among the sick was an eighteen-year-old volunteer from Toulouse, France. With a brown mop top, he looked like a young Mick Jagger. Hailing from a middle-class background, he recently finished high school, read about Nirmal Hriday on the Internet, booked a one-way ticket to Kolkata, and committed to be a volunteer at the hospice.

  He swung his arm over the shoulder of an old man who was suffering from an enormous stomach tumor, as if they were old buddies.

  “Time to eat,” he said in French to the man, who probably only spoke Bengali but smiled anyway. Kindness is a common language.

  The presence of this vibrant young adult in a room full of old, frail men was curious to me. He was so different not only from them, but also from me. When I was his age, I was burnishing my college application so that I could attend a first-class university. Admission to a good school can mean an opportunity to land a great job. And now that I had a proverbial great job on Wall Street, I continued working at a frenetic pace in order to accumulate more money, which would supposedly take me to higher ground.

  This young man wasn’t thinking about any of this. He was unsure when or whether he would attend college at all. It led me to ask: What leads a healthy young man to live among the old and sick, to forgo riches for rags?

  “I do as my religion teaches,” he explained. He was raised as a Catholic and his parents regularly read to him the Gospels when he was a child. He then said something I’ll always remember, a paradoxical yet universal insight: “Though everybody here is poor, they are rich in spirit.” His response made me consider another question that has stayed with me: How is it that those who had nothing—at the edge of death—were nevertheless at peace?

  Since its creation, money hasn’t been just a measure of wealth; at times it’s been a symbol of our values and a test of our morality. How one handles money has many implications beyond saving and spending, and can demonstrate whether someone honors the moral code of a society: A rich woman who never donates to those in need is judged as stingy, and a poor woman who gives what she can is considered generous. It seems as if the poor person is acting in the “right,” or at least, in a more humane manner. The way in which one uses money may build or destroy one’s reputation and standing in a community, and it certainly demonstrates one’s character. Because money is an expression of value, it matters how it’s expressed.

  The manner in which money is expressed depends on one’s motivations. Consider a simple, clarifying way in which to think about our intentions. In the first case, someone wants more money. This view is predicated on the economic logic that more is better. In the second case, someone doesn’t strive for more money, because they have detached from it in search of something else. This view is based on the spiritual logic that less is more or enough is enough, because they are embracing the paradoxical premise that renouncing material wealth will yield spiritual growth and contentment.

  Using economic logic, we desire more money because it helps us obtain the resources necessary to survive. Up until this point, this entire book has been predicated on the logic that more is better. Whether it’s our evolutionary algorithm or our reward circuitry in the brain, we are constantly in search of more money, which has come to symbolize attributes like success, status, and privilege. It follows that financial success has become an almost universal goal, and many work diligently in pursuit of this end. A Pew Research Center poll finds that 77 percent of Americans believe that hard work leads to success.4

  But wanting more money and status is about “external success,” which shapes and defines many who are engulfed in the competitive “rat race” culture. Yet the pursuit of external success doesn’t always engender personal contentment.5 Gallup measured the job satisfaction of 25 million people across almost two hundred countries and found that only 13 percent were “engaged” or “emotionally invested” in their job. They found twice as many “disengaged” workers, who exhibited negative or harmful feelings, as they did engaged workers.6 The obsession of making money can have deleterious consequences. In Japan, they even have a word for someone who dies from too much work: karo-shi.

  When external success becomes a singular focus, one may begin to evaluate everything with economic logic—the more, the better, even the right. Gallup found that those who believe hard work leads to financial success are more supportive of capitalism. Though support among Americans for free markets dropped from 80 percent to 59 percent in 2010 after the financial crisis, trusting the market has been a mainstay of mainstream US economic thought.7 Alan Greenspan and many leading economists long believed that the market is inherently right and self-correcting. The belief that the market is “right” even pervades American literature. In a study conducted by the Library of Congress, Ayn Rand’s Atlas Shrugged was described as “the most influential book on American lives after the Bible.”8 The book supports libertarian views, notes the supremacy of the free market, and maintains that business and markets should be deregulated. Financial writer Justin Fox traces the belief that the market is “right” to the Middle Ages:

  Hints of the same attitude could be found in the work of early economists like Adam Smith—and even religious thinkers of the Middle Ages. While some medieval scholars argued that lawgivers should set a “just price” for every good… St. Thomas Aquinas among them, held that the just price was set by the market.9

  The first person to reference the invisible hand wasn’t Adam Smith; it was John Calvin, notes Columbia University humanities professor Mark C. Taylor.10 Calvin believed that God’s hand brought order to an otherwise chaotic world. By using this terminology, Smith changed the “source of order” from “God, to internal relations among individual human actors. From this point of view, the market is a self-organizing system that regulates itself,” writes Taylor.11

  However, when market values reign supreme, the line between “right” and “wrong” can be blurred. The profitable can be confused for the “right.” These days almost everything has a price. You can pay someone to write your entire doctoral dissertation. You can even pay someone for their virginity. In one public
incident, a Brazilian woman auctioned her virginity for $780,000 to a Japanese man. But is it right? She explained it away: “If you only do it once in your life then you are not a prostitute.”12 The deal fell through, and she tried to auction it again. Even Judas sells the sacred and betrays Jesus for thirty silver coins, demonstrating that even the messiah’s life had a price.

  Harvard professor Michael Sandel writes that when everything is for sale, anything can be bought and subject to corruption.13 Putting a price on what was once priceless degrades it. These outrageous acts introduce a market norm into a previously nonmarket arena, similar to the example in chapter 3 in which a Mesopotamian man couldn’t sell his wife unless he was settling a debt.

  Ironically, yearning for more external success can leave one with less time, satisfaction, and serenity. The economic logic can yield suboptimal results. This prompts the question, is there another way? Invoking the spiritual logic of less is more may yield superior results. If money symbolizes strength and power, then the lack of it represents the opposite: weakness and impotence. Why would someone want these things? Indeed, the spiritual logic is counterintuitive, yet it is the means to a different end, not financial treasure, but heavenly riches. It’s in experiencing vulnerability that one creates the space and need for faith. If money is a sign of external success, then the detachment from it is about attaining inner peace—where the shadow of money ends and the sunlight of God shines.

  When it comes to money, many religious leaders champion the spiritual logic of less is more and the paradoxical wisdom that detachment from material treasures can yield spiritual riches. During different periods, as civilization and markets developed, various religious leaders, like Laozi, Buddha, Jesus, and Muhammad, embraced this paradoxical wisdom. They steered their followers away from coveting material things like money and toward a more ascetic path. These religious leaders sought to enlighten man regarding the outsized power of money. They warned their followers about being enveloped by greed. Considered a deity among some Taoists, Laozi once cautioned that “he who is attached to things will suffer much.”14 That so many religious leaders admonished the worship of money and advocated this paradoxical wisdom deserves further attention.