10: The Scent of Money
From Harari — Sapiens: A Brief History of Humankind
This chapter discussed another important symbol of human civilization, money. The author first went through the origin of the money, during hunter-gathering stage and then agricultural revolution. Next, the chapter discussed the features of and principles behind money. Before the end of the chapter, the author brought about the impacts of money to the world, seemingly to prepare further elaboration of the role of money in human history in later chapters. Indeed, money is an essential driving force for many phenomena in human society, it is necessarily to understand the role of it in order to deep understand the human history evolution and how today’s world have been shaped.
Origin of money: in the hunter-gatherer era, the daily life need was satisfied by self producing and sharing through an economy of favors and obligations. This small scale economy was basically self sufficient and independent. However the sharing depended on obligation to give back the favors later on. This nature of reciprocity did not work when the scale of economy grew bigger along with the development of cities and kingdoms. Simply because the trust among neighourhoods was not guaranteed in foreigners. Foreigners may not reciprocate the favors later.
In addition, the improvement of transport also opened more trading possibilities that have been difficult, if not impossible. People during agricultural revolution gradually realized that they should focus on producing goods that they were good at (specialization), i.e. a lower cost and higher quality than others, in order to maximize what they can get. The more complex trading among people require a medium to ease the process of exchange. This gave rise to the concept of money.
According to author, money has two main uses, (1) medium of exchange; and (2) medium to store wealth. “Money is not coin and banknotes.” (pp.197), “Money is thus a universal medium of exchange that enables people to convert almost everything into almost anything else” (pp. 199). From this perspective, again, the concept of money is an imagined order, and does not physically exist. “… it is a psychological construct.” (pp.201). This ties back to one of the backbones throughout the whole book — imagined order. The author then elaborated how money works. “Money is a system of mutual trust, … is the most universal and most efficient system of mutual trust ever devised” (pp.201). “Money is more open minder than language, state law,…” (pp.207). So, the existence and the value of the money also depends on the mutual trust, which is the same as the sharing economy during hunter-gather stage. The two universal principles on which money is based: universal convertibility and universal trust. These two principles help shape the world significantly according to the author.
Nowadays, almost everything can be measured by money, even some spiritual or psychological need can be, to certain extent fulfilled by using money to accomplish. Money, itself is neutral, not bad nor good. However, I believe it is the interactions between human and money lead to many positive and negative impacts to the order of the world, no matter in planned or free market economy. Money is so close to us in the 21st century, it affects our daily lives, from the second we are born, till the moment we are in the coffin. It affects us how we plan for our own life and family at personal level, and how we plan for our companies, cities, and countries at larger levels. We need to ask ourselves, do we decide the way how we use of money? Or money is actually controlling or manipulating us, human? This is an important question for humankind to self reflect, especially, when we question about the future of humankind. What is the correct or appropriate attitude towards this imagined construct, money?
