The power of money

In his book ‘A Cultural History of Money’, Bill Maurer, Dean of the School of Social Sciences at University of California, has comprehensively explained the evolution of green notes from the ancient barter system

Published - February 06, 2020 03:56 pm IST

Bill Maurer, Dean of the School of Social Sciences at University of California has authored a book titled, “A Cultural History of Money,” In the beginning, before there was money, if I had something that you needed, I would approach you with that thing and see if you had anything that I needed. And we could basically barter on the spot. The problem with barter is it really does depend on us each meeting each other's needs in that moment. And so the origin story of money that we have is that humans invented money essentially to be a mediator in these sorts of exchanges.

Barter requires something called a double coincidence of wants. The double coincidence of wants means that in that moment, I've got what you need. You've got what I need. There's a coincidence of our needs in the instance. And that rarely happens. So the idea here is that humans wizard up this kind of third thing, money, this magical substance that can put all things on one scale of value and use that as sort of their measuring stick, then, to make these kinds of transactions.”

Archaeological record

Maurer continues, “When we look around the world and in the historical and archaeological record of this kind of direct barter, we don't find it. We find, instead, systems where people are taking some kind of object - let's take a kind of a big shell valuable in the highlands of New Guinea - and using it to mark relationships…that serve as a kind of indicator of enduring obligations that people have to one another. It's kind of like an open-ended IOU, for everyone around us that. We have a relationship that will essentially allow us to have a flow of goods between each other and between our families. It signifies to everyone around us that we have these ties of enduring obligation and responsibility. It's really a memory device to indicate an ongoing, enduring relationship, an ongoing set of obligations.”

Maurer says all gifts and gift giving fall into this category, “The early anthropologist Marcel Mauss wrote about this quite explicitly, saying that in the gift, there's the obligation to give, there's the obligation to receive but then also the obligation to reciprocate.”

Clay tablets

In The Smithsonian, Maurer came across clay tablets used 5,000 years ago in ancient Mesopotamia. “They were used to keep records of obligations. But as human societies grew larger, people needed a way to systematically keep track of who owed what to whom. So to make money work, you need something that is both that system of reckoning and record keeping but also an authorizing power that says, in effect, this is the way that we keep our records here. And that's essentially what we have with modern money still today. We don't necessarily think of it that way, but basically money is a unit of account that, in our case, is authorized by the state.…”

Therefore, says Maurer “unbelievable power” comes to the state and to the moneyed and thus makes patterns of relationships too.

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