Anthropology of Money
The Intertwined Histories of Societal Structures and Currency Evolution
In ancient Yap, known as Micronesia in today’s age, residents didn’t rely on coins or banknotes but rather large limestone discs known as Rai stones. From their beginnings as a currency used for trade and social status to their enduring significance in Yapese culture today, the Rai Stones have profoundly shaped the society of this small island in the Pacific. These stones, sometimes too heavy to move, weren’t physically exchanged; only the ownership changed. Fast forward to today, and digital currencies — from physical banknotes to digital money, from Bitcoin to Ethereum — echo this intangible exchange, revolutionizing our understanding and application of money.
Anthropologists have long viewed money as more than just a medium of exchange. It embodies trust, authority, and societal structures. Money facilitates the specialization of professions. Individuals can provide specialized services or produce goods and receive money in exchange, which they can then use to purchase other specialized services or goods. In many cultures, money also plays a role in social rituals, from dowries to almsgiving, indicating its deep integration into societal customs and practices. In the days of barter, exchange was straightforward and personal. But as societies expanded, we transitioned to symbolic items like coins, assigning them value based on consensus. This consensus evolved, with political authorities asserting control, sometimes manipulating value for power.
However, in recent times, there has been a shift. Due to globalization, money’s role has expanded from national to global, directly impacting global inequalities. The dominance of a few major currencies has given certain nations disproportionate influence, furthering economic disparities. The dollar or the euro isn’t just a piece of paper or a number anymore; it’s become a tool of governance and influence. Access to these dominant currencies has created and exacerbated social divisions. Those with the means to earn, invest, or save in dollars or euros have found themselves in a privileged economic class. This has led to societal fractures, with supposed “elites” having differing access to global goods and opportunities, especially in developing countries like Pakistan, which are going through an economic crisis in recent times. Over time, societies might start valuing certain professions, skills, or industries more than others based solely on their ability to tap into the dollar or euro economies. This can potentially disrupt traditional value systems and hierarchies, reshaping societal perceptions of what professions or roles are deemed “important.”
As technology keeps on innovating, we’re transitioning into the digital currency era. The rise of decentralized finance (DeFi) — systems where control isn’t centralized, but by a distributed network, has started to reorganize societal power dynamics, much like when Rai stones were the norm. One of the advantages of blockchain, the underlying technology for most DeFi platforms, is its transparency. All transactions are recorded on a public ledger. This transparency can counteract corruption, fraud, and unethical practices. Furthermore, unlike traditional finance, DeFi platforms are available to anyone with an internet connection. This democratizes access to global finance and can shift economic power from established financial centers to previously marginalized areas.
However, with every evolution come challenges. While digital currencies promise democratization, they also risk amplifying pre-existing inequalities, especially if access to technology remains uneven. A significant portion of many digital currencies, especially newer ones, is often in the hands of a few early adopters or “whales.” This can lead to market manipulation, where the rich get richer, amplifying existing wealth inequalities. Some DeFi platforms might retain exclusionary practices, like high transaction fees or services limited to large holders, perpetuating economic and social divides.
So, as we stand at the dawn of another monetary evolution, one driven by bytes rather than stones or metals, we must ask, “Will this new chapter bring a more equitable global financial system or further cement existing disparities?” Just as anthropology teaches us that money is deeply embedded in societal structures, computer science reminds us that the tools we create shape and are shaped by society. Digital currencies, for all their revolutionary potential, carry risks that might inadvertently intensify societal and economic gaps. However, if we can ensure that their integration into the global financial context is equitable, we can prevent the exacerbation of existing disparities going into the new era.