THE EVOLUTION OF MONEY Columbia University Press Publishers Since 1893 New York Chichester, West Sussex cup.columbia.edu Copyright © 2016 Columbia University Press All rights reserved E-ISBN 978-0-231-54167-1 Library of Congress Cataloging-in-Publication Data Names: Orrell, David, author | Chlupatý, Roman, author Title: The evolution of money / David Orrell and Roman Chlupatý Description: New York : Columbia University Press, [2016] | Includes bibliographical references and index Identifiers: LCCN 2015050683 | ISBN 9780231173728 (cloth : alk paper) Subjects: LCSH: Money—History Classification: LCC HG231 O77 2016 | DDC 332.4/9—dc23 LC record available at http://lccn.loc.gov/2015050683 A Columbia University Press E-book CUP would be pleased to hear about your reading experience with this e-book at cup-ebook@columbia.edu COVER DESIGN: Noah Arlow CONTENTS Acknowledgments Introduction Origins The Money Magnet Virtual Money New World A Wonderful Machine The Money Power Solid Gold Economics New Money Changing the Dominant Monetary Regime, Bit by Bitcoin 10 Utopia Notes Bibliography Index ACKNOWLEDGMENTS Many people contributed to this book We would like to thank Myles Thompson and Robert Lecker for their advice and encouragement, and Stephen Wesley, Irene Pavitt, and Ben Kolstad for their expert editorial and copy-editorial advice Credit also goes to all those who have shared their time and expertise on various subject matters related to The Evolution of Money, especially Parag Khanna, Tomáš Sedláček, Marek Palatinus, and Rob Carnell and James Knightley of ING’s London office Roman would like to thank his dear friend and mentor Roger Tooze for providing him with invaluable advice and serving as a critical voice during the writing of this book He would also like to extend his deepest and sincerest gratitude to his lovely wife, Klara, and his lively daughter, Dominika, for their help, support, and patience (not only) during the time spent writing this book David would like to thank his wife, Beatriz (better than money), and his daughters, Isabel and Emma, who also evolved as this book was written Finally, the authors would like to thank each other for an enjoyable and mutually inspiring collaboration David would like to dedicate this book to Emma, and Roman would like to dedicate it to Sebastian Introduction The thing that differentiates man from animals is money GERTRUDE STEIN, “MONEY” “Money talks” because money is a metaphor, a transfer, and a bridge MARSHALL MCLUHAN, UNDERSTANDING MEDIA: THE EXTENSIONS OF MAN This book is about the nature and future of money—that mercurial substance that dominates so much of our lives, remains strangely elusive and misunderstood, can drive us forward or dash us against the rocks, and whose evolution may play a deciding role in the future success and prosperity of our species Money is one of mankind’s earliest inventions Its history appears to be as old as that of writing, and the two are closely connected—some of the oldest written artifacts in existence are 5,000-year-old clay tablets from Mesopotamia that were used to record grain deposits Both money and writing are a way of using symbols to describe the world Both are used as a means of communication, and thus are fundamentally social and central to the relationship between individuals and the state Money, in many respects, is as closely tied to our way of thinking as words Like language, money is based on social conventions, the most important being agreement on what constitutes a standard of currency In the same way that words for the same thing differ between languages, so the choice of money is flexible, everything from cowrie shells in ancient China to cigarettes in postwar Germany having served as lucre The first metal coins appeared around 600 B.C.E when the small but trade-friendly kingdom of Lydia (in present-day Turkey) introduced tokens made from a naturally occurring alloy of gold and silver Today, money has transcended a physical relationship with precious metals, or for that matter anything else The concept of currency has become increasingly abstract, to the point where actual coins and notes form only a small portion of the money in existence Like words in the cloud, money exists as an abstract set of symbols that can be created or destroyed with the press of a keyboard button or the touch of a screen Cybercurrencies are revolutionizing the financial industry in the same way that e-books are revolutionizing the publishing industry This virtual, ethereal form of money underpins modern capitalism, and its pursuit determines much of the structure of our lives Jobs are often seen largely as a means to obtain it Our houses are seen not just as homes but as stores of wealth—where wealth is defined as something that can be converted, at least in principle, to money An important measure of success for people is the numbers they make or the net worth they accumulate over their lives; for a country, its gross domestic product as measured in its national currency Displays of wealth provide a form of validation within the community, and the pursuit of riches lends shape and meaning to our lives Money, for many people, is not just a necessity of modern life; it is something closer to a religion (indeed, without such faith, the system would collapse) As the British Museum observes, money has become “the main motivating factor behind western culture … the prime focus of political debate and personal endeavor, both despite and because of its increasing elusiveness and power This kind of attitude has been aptly termed ‘fetishistic,’ in the sense that it attributes a quasisupernatural quality to the object of its adulatory devotion, in this case money.”1 Money is also a source of worry According to Gallup, “Half of Americans have substantial financial anxiety.”2 A survey by Britain’s Observer newspaper portrayed a nation “anxious about numbers We are, collectively, twice as worried about money as we are about family or health.”3 And yet, despite its obvious importance in our lives, we often tend to downplay money, saying it is nothing special in itself, no more than a glorified system for exchange and accounting And despite the long history of our relationship with it, we don’t seem to know it very well Its properties are something of a blank page For example, the credit crunch in 2007 that kicked off the ensuing financial crisis was one of a long series of such events caused in large part by the dynamics of money and our inability to understand them Like those other events, it came as a complete surprise to nearly everyone, including major financial institutions such as the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) We appear to be as helpless in the face of financial storms as our ancestors were to more natural cataclysms such as storms or volcanoes Wealth that is built up over decades can seem to vanish into the ether, as if it had no substance A commonly held currency is seen as a unifying force, which bonds people together, like a shared national anthem In Europe, the euro was intended to bring disparate member states together and eliminate the risks of the deadly conflicts that characterized much of its history While that goal has been reached, the common currency has in some respects had the opposite effect, enhancing the differences between north and south, between Greeks and Germans Indeed, money often seems to have a way of pulling people apart even within a single country: a defining feature of modern capitalism is extreme wealth inequality and the resulting threat of social conflict Our ignorance about money is not relieved by the field of economics, which—contrary to what one might expect—is surprisingly mute on the subject Mainstream “neoclassical” economic theory, which has long shaped our attitude toward the economy, is based on the peculiar notion that money is just an inert medium of exchange, a passive facilitator of transactions that are based on rational decisions to optimize utility As a result, most of the models used by economists and policy makers not take money explicitly into account, treating it only as a metric rather than a thing in itself But as marketers and advertisers know, financial decisions are often governed less by reason or calculation than by emotion —and money is about the most emotionally volatile substance imaginable We will go to war for it, marry for it, sacrifice for it, obsess over it, go crazy for it—and never have enough of it! Money is widely associated with happiness and well-being, which is one reason we desire it However, the relationship between wealth and happiness is complicated and often paradoxical For example, experiments show that we are often happier if we give money away than spend it on ourselves.4 At the same time, the quest for wealth has the undesirable side effect of environmental destruction—affecting not just our happiness but the health of the planet Money is like oxygen: a substance that surrounds us, is usually invisible, but is vital for our survival It is also potentially explosive But we often seem about as advanced in our understanding of it as a clumsy nineteenth-century scientist tinkering with the confounding and dangerous properties of phlogiston (believed at the time to be the source of fire) This book investigates the properties of this mysterious substance that so affects our lives—and points the way to a future in which money may play a very different role The book is essentially divided into two main parts The first part (chapters 1–5) traces the development of money from ancient times to the present day, explores its fundamental properties, and shows how modern alternative currencies are just the latest step in a long historical process The evolution of money has involved a number of transitions The first version of money (we’ll call it Money 1.0) appeared as part of an elaborate credit system in ancient Mesopotamia The first actual coins (Money 2.0) were minted in Lydia, and the idea soon spread (or appeared concurrently) around the world In the Middle Ages, a shortage of precious metals, combined with the lack of a strong central government, meant that—like the bitcoins of today—Money 3.0 was more an accounting system than something you could weigh in your pocket The discovery of the New World by Spain—and the plunder of vast quantities of precious metal—marked the beginning of Money 4.0 Mercantilist governments attempted to accumulate the maximum amount of treasure, and value could be explicitly calculated in terms of a weight of gold This led to the creation of a gold standard for currencies, enforced by the British Empire and the Bank of England The collapse of the Bretton Woods agreement in 1971 marked the official end of the gold standard and the early stages of a major bifurcation toward what we call Money 5.0 The second part of the book (chapters 6–10) focuses on the current state of currencies and on new ideas for directing the torrent of money and the accumulation of wealth If money has alternated between virtual and metal-backed forms, then it is now certainly in a virtual regime, where most money is created at the whim of private banks, simply by entering a number into a computer account When the Bank of England released a paper admitting this fact in 2014, it created ripples of shock in the media, even though the practice is not new The British pound and the U.S dollar have more in common with alternative cybercurrencies than appearances suggest We reveal the power relationships that hold the financial system aloft, show how its flaws and instabilities make alternatives particularly attractive, and explore the developments in both technology and economics that are changing the story and opening the door to new currency systems In recent years—especially since the crisis—there has been an explosion of interest in forms of money that not just extend the idea of money but radically rewrite it These range from local time-share schemes, in which people exchange hours spent performing services, to globally traded digital currencies like Bitcoin that exploit technologies such as peer-to-peer computer networks Their development has been enhanced by the ubiquity of mobile computing devices, which in some countries are taking the place of wallets New platforms such as the aptly named Ethereum extend the computer architecture to an ecosystem of cybercurrencies and other forms of transactions and services, thus moving entire business models into the ether Because money so strongly affects our society, and even our own personalities, the development of this new, fifth-generation money will have profound effects not just on business models for the financial sector but also on the way that we behave and interact In fact, many of the new currencies, or alternatives to currencies, are explicitly designed to produce socially positive outcomes These moneys should help provide an answer to some of the issues faced by an increasingly globalized and decentralized world Money has always told us much about human society Today the shape and structure of finance, money, and wealth is being questioned like never before The Evolution of Money will act as a guide to the inherent properties and contradictions of our current system and will make predictions about how it is likely to evolve In ten years’ time, what will be accepted as currency? How will we buy things? What kind of money will our purses, wallets, or mobile devices hold? And how will we measure our place in the economy? The authors are a Canadian mathematician and author (Orrell) and a Czech-Canadian financial journalist (Chlupatý) We met in England and collaborated on a couple of shorter books, including a three-way discussion (The Twilight of Economic Man) with the Czech economist and philosopher Tomáš Sedláček One of the topics we discussed then was how money and economic growth have been fetishized by society Money is considered to be hard and absolute and drives out other values such as aesthetics or ethics that are considered soft and somehow secondary In this book, we argue that money can transcend its role of reducing everything to number and can become, like language, a more open and affirmative means of communication For the world economy to be sustainable, capitalism needs to readjust A first step is to rethink the function and purpose of money and the meaning of wealth As they say, money talks—and soon it will be in a different voice Joachimsthal, Czech Republic, 79 jobs, 171 Joshi, Dhaval, 225 JP Morgan, 123, 193, 210, 232 Jubilee, 18, 263n41 Judas, 23 Judea, 22 Juno Moneta, 24, 115 just price, 62–63, 72, 78, 80, 234, 236 Kahneman, Daniel, 166, 167 Kashkari, Neel, 123 Keen, Steve, 165, 257n31, 258n60, 263n41 Kelly, Brian, 214 Kelton, Stephanie, 30 Kelvin (lord), 40 Kennedy, Joseph, 123 Keynes, John Maynard, 15, 106, 148–50, 223–24, 256n21 Key to Wealth, or, a New Way for Improving of Trade: Lawfull, Easie, Safe and Effectual, The, 84 Khanna, Parag, 131, 183 Kindleberger, Charles Poor, 246nn23–24, 247n1, 249n34, 249nn26–27, 250n2 King, Mervyn, 30, 150 King of Siam, 15 King of Wu, 32 Kirman, Alan, 153 Klein, Naomi, 222, 256n27 Knapp, Georg Friedrich, 42–43, 216, 244n29 Knight, Frank, 181 knights, 61, 68 Knutson, Brian, 41 Kocherlakota, Narayana R., 30 Kohl, Helmut, 132 Kolbert, C F., 28 koruna, 183 Kreider, Tim, 10 Kreuzberg, Germany, 208 Krugman, Paul, 165, 266n45 Kublai Khan, 64–65 Kuhns, 122 Kumhof, Michael, 257n31 Kuwabatake Sanjuro, 199 labor, 140–41, 187–88, 218, 242n44 land, 58 Latvia, 134 Laurium, 23 law (nomos), 27–28, 246n14 Law, John, 91–92, 97, 107, 113, 148, 215 law of supply and demand, 89 Laws of Eshnunna, 17 Laynez, Diego, 67 League of Nations, 131 left hemisphere, 9, 40–41 Legal Tender Act, 103–4 legionary, 242n44 Le Goff, Jacques, 63, 71 Lehman Brothers, 178 lender of last resort, 92–96, 113–14 LETS See Local Exchange Trading System Levitt, Arthur, 124 Lewis, Nathan, 194 Liber abaci See Book of Calculation liberty, Libor See London Interbank Offered Rate libra See pound Libya, 21 Lietaer, Bernard, 44, 116, 169, 176, 188, 194, 252n45 light, 217 Limited (peiron), 35 Lincoln, Abraham, 100, 103–4, 122 See also greenbacks Linton, Michael, 187–88 Lipsey, Richard, 14 lira, 189 Lithuania, 132 Liu, Jack, 192 livre, 59 loans, 111, 114, 241n24 lobbying, 124–25 local currencies, 185–90 Local Exchange Trading System (LETS), 187–88 Locke, John, 87–88, 98–99, 140–41 Loebs, 122 logging camps, logic, London, England, 86, 95 London Gold Fixing, 39 London Interbank Offered Rate (Libor), 149 lottery, 10, 85 Louisiana, 100 Louis IX (king), 59 Louis XIV (king), 98 Louis XV (king), 98 Lovelock, James, 160–61 loyalty programs, 190–91 lubricant in exchange, 10, 29–30 Lucas, Robert, 152, 156 Lucke, Bernd, 183 Luyendijk, Joris, 124, 125, 182 Lydia, 2, 20, 38, 52 Lyon, France, 66 Madan, Geoffrey, 249n29 Made Beaver, 12 main currency, 181–83 Maine, 105 male principle, 37–38, 114–17 Manchester University, 172–73 Mandelbrot, Benoit, 37 Manhattan, New York City, New York, 17–18 Mantega, Guido, 128 Maria Theresa thaler, 79 Maris, Bernard, 143 marketers, 166 market exchanges, 229 markets, 13, 22, 153–54, 155, 156 market value, 46–47 married couples, 165–66 Marshall, Alfred, 40, 157 Martin, Felix, 44 Marx, Karl, 7, 68, 97, 141 Massachusetts Bay Colony, 100–101 MasterCard, 109 material monism, 34 mathematics, 9, 56–57, 78 Matthew 20:2, 242n44 Ma Twan-lin, 95 Maximinus, 242n44 May, Tim, 203–4 Mayans, 75 Mayer, Thomas, 183 Mayweather, Floyd, Jr., 232 McCaleb, Jed, 203 McGee, Alan, 178–79 McGilchrist, Iain, 40–41, 121 McKinsey Global Institute, 119 McLeay, Michael, 94 McLuhan, Marshall, 1, 45, 100, 176, 179, 238, 256n13 McNamara, Frank, 109 media, 256n13 Medicis, 71, 75 Medium is the Massage, The (McLuhan), 176 medium of exchange, 3, 8–9, 42, 43, 159, 165 medium-sized businesses, 184 memory, 30 Menger, Carl, 13, 29, 141–42 “Mephisto” (fictional character), 100 mercantilism, 82–84 Merchant of Venice, The (Shakespeare), 64 Mesopotamia, 20, 22, 28, 39, 42, 56, 241n24; overview of, 15–18; primary creditor, 67 message, 235–38 metal, 77, 82, 140, 161, 248n25 metallism, 42, 217, 244n29 Metaphysics (Aristotle), 34, 48 Mexico, 75–78, 265n36 “Micawber” (fictional character), 58 Midas (king), 20 Middle Ages, 54, 55, 58, 61, 73, 77, 234–35; accounts during, 60; bill of exchange system in, 67, 159; black money during, 59; gift economy in, 72; virtual currency period, 115 migrant workers, 201–2 Miletus, Greece, 33–37 military, 21–22, 24, 26 Mill, John Stuart, 143, 167 Million Adventure, 85 mind, body versus, 35–39 mining, 8, 199–200, 202, 208–9, 212 Minsky, 258n60 Minsky, Hyman, 164–65 mint, 59 Mint, U.S., 79, 79–80 minting, 32 mints, 11, 24 Min Zhu, 108 Mises, Ludwig von, 96 Mississippi Company, 99–100 Mitchell-Innes, Alfred, 14–15, 44 Mithras, 86 mobile phones, 192–93, 266n3 Moctezuma II (emperor), 76–77 models, 155–57, 163, 260n94 Modest Enquiry into the Nature and Necessity of a Paper-Currency, A (Franklin), 101 momentum buyers, 161 Monetae cudendae ratio See On the Minting of Coin monetarism, 144–45 monetary crisis, 32 monetary experiments, in Great Depression, 185–86 monetary policy, fiscal policy as more important than, 148 monetary transactions, money (nomisma), 246n14, 252n36; adoption of, 9; characteristics of, 8–10; creation of, 10–11; definitions of, 7, 42–46, 52; demand for, 137; exactness of, 9; fiat, 30, 42; finality of, 9; first, 12–13; force, 46; as hard, 28–30; illusion, 144; invention of, 10–11; magnet, 31–54; as message, 235–38; metal, 77, 82, 140; as new, 176–95; origins of, 7–30, 16, 23; overview of, 1–5, 7–30, 16, 23, 235–38; points, 39; power, 78, 103–5, 118–38; properties of, 8–10, 31–54; quantum nature of, 174– 75; rationality of, 9; as stable, 120–23; status of, 78; supply, 55, 111, 251n30; as veil, 141 “Money” (Stein), Money: A History (Eagleton and Williams), 250n7, 250n9 Money and the Mechanism of Exchange (Jevons), 12 moneychangers, 64 moneyfication, 146–47 “Money is Memory” (Kocherlakota), 30 moneylenders, 25, 56, 64 Moneyless Man, 227, 267n26 “Moneyless Man, The” (Boyle), 267n26 moneyness, 49–50 money objects, 45–48, 53–54, 66–67, 161, 216, 244n31; creation of, 120; forms taken by, 50, 52 Money: Whence It Came, Where It Went (Galbraith), 97, 249n39, 251n17 More, Thomas, 221, 227 Morgans, 74, 122 Morgan Stanley, 232 mortgages, 61, 146–47 Mosaic, 210 M-Pesa, 192–93 Mt Gox Bitcoin exchange, 203 multiplier, 93–94 Mun, Thomas, 83 Munchau, Wolfgang, 165 Mundell, Robert, 131–32 Mundus Novus See New World Muscatell, Keely, 73 music, 34–35 Muslims, 61 Mystery of Money, The (Lietaer), 116, 252n45 Nakamoto, Satoshi, 196, 197–98, 201, 204, 218 Napster, 213–14 NASDAQ, 108 National City Bank of New York, 122 nation-states, 82–84 Native Americans, 11, 12, 19 natural economy, 29 natural resources, 259n80 negative feedback, 161 negative numbers, 56–57, 137–38 neochartalists, 15, 111–12 neoclassical economics, 3, 138, 142–43, 151–52, 222, 234 neo-classical utility theory, 266n10 Nerburn, Kent, 126 networks, 216, 218 net worth, 41 NeuCoin, 208–9, 218 New Economics Foundation, 124 Newton, Isaac, 88–90, 91–92, 98–99, 105–6, 217 Newtonian physics, 142, 144 New World, 73, 74–96, 79 New World (Vespucci), 75 New York, 17–18, 103, 186–87 Nicomachean Ethics (Aristotle), 32 Nietzsche, Friedrich, 118 Nigeria, 109 Nike, 192 NINJA borrower See no income, no job, no assets borrower Nixon, Richard, 102, 105–8, 112, 114, 127–28, 194 Nobel Prize in Economics, 155 no income, no job, no assets (NINJA) borrower, 164 nomina See bonds nomisma See money nomos See law nonbanking competition, 192 Nordberg, Donald, 168 Normandy, France, 247n34 North, Dudley, 84 North America, 11, 12, 19 Northern Party, 189 Notre Dame, 61 Novartis AG, 167 Nucleus, 205 numbers, 34–37, 43–44, 50–54, 70; Arabic system, 57; economics fascination, 156–57; importance of, 243n8; negative, 56– 57, 137–38; physical world as, 78; power of, 40–42; Roman system, 57; square, 57; value’s relationship with, 229–30, 243n8; as wrong, 226–28; zero, 57 oasis, 228–32 Observer, obverse, 38 Odum, Eugene, 221–22 OECD See Organisation for Economic Co-operation and Development Office of Naval Research, 151 oil, 112 100 percent banking, 181 online gaming, 29 online journals, 231 On the Minting of Coin (Monetae cudendae ratio) (Copernicus), 80 “On the Origins of Money” (Menger), 13 open-access online journals, 231 Opening of the Universe, The (Brahmagupta), 57 open-source software, 230 opposites, 35–36 oracle, 22 ordoliberalism, 96 Oresme, Nicolas, 69, 88, 180 Organisation for Economic Co-operation and Development (OECD), 3, 225, 267n27 Orrell, David, 48 “Other Bitcoin Power Struggle, The” (Clenfield and Alpeyev), 264n5 Outline of Money, An (Crowther), 13 Overstone (baron), 95 Ovid, 25 Oxford University, 62, 225 Pacioli, Luca, 8, 57 Palatinus, Marek, 210–13 Palgrave, R H Inglis, 249n29 pan-Arab currency, 136 Panquetzaliztli, 76 paper currencies, 82, 84–86, 250n6 See also banknotes; fiat currencies paradox of thrift, 148 Paris, France, 61, 62, 208–9 patriarchy, 115 Patterson, Orlando, 27 “Paul A Samuelson, Economist, Dies at 94” (Weinstein), 139 Paulson, Henry, 123 Paym, 193 peiron See Limited Pennsylvania, 101, 188 penny, 59 Pense, Alan, 241n35 People’s Bank of China, 116–17, 129 per capita gross domestic product (GDP), 167 Persia, 22 personal property, 24–26 persons, 243n8 Peru, 77 Peruzzi, 66, 70–71 peso de ocho See piece of eight Pfeffer, Jeffrey, 167 Philadelphia, Pennsylvania, 188 Philip IV (king), 61 Philip of Macedon, 22 physics, 45, 217 See also Newtonian physics; quantum physics piece of eight (peso de ocho), 79 Piff, Paul, 73 Piketty, Thomas, 156, 224 Pingit, 193 Plaso, 214 Plato, 37, 39 pleasure, 166 Pliny the Younger, 25 political influence purchasing, 124–25 politics, 123–26 Politics (Aristotle), 10 Polo, Marco, 64–65 Polyant, Karl, 72 pope, 66 Portugal, 77 positive-feedback mechanism, 161, 181 Post-Crash Economics Society, 172–73 pound (libra), 32 pound sterling, 32, 89–90, 128 power, 52 power relationships, 120–23, 225–26 Pownall (governor), 140 precious metals, 56, 75, 78 See also gold; silver prices: in economics, 154; of gold, 161–63, 162, 242n46, 243n10; as just, 62–63, 72, 78, 80, 234, 236; in neoclassical economics, 151–52; power relationships influencing, 225–26; revolution, 80; theory of, 244n14; value reflected by, 158, 226–27 primary creditor, 67 Princeton University, 180 Principles of Economics (Marshall), 40, 157 Principles of Political Economy (Mill), 143 printing, 84–86 private banks, 103, 121–22 private companies (publicani), 25 private debt, 112, 145, 147 promissory notes, 56, 65 proof-of-stake altcoins, 208–9 property, 24–25, 27–28, 87–88 See also mortgage prosperity certificates, 185–86 prostitutes, 52 publicani See private companies public debt, 111–12 public memory, 209–10 Putin, Vladimir, 128 Pythagoreans, 34–37, 48, 57, 237 Qatar, 136 QE See quantitative easing quachtli See cotton capes quality of life, 68 quantification, quantifying, 52–54 quantitative easing (QE), 177–81, 225 quantity theory of money, 143–45 quantum coin, 45–48 “Quantum Money and the Reserve Question” (Eisenstein), 245n37 quantum physics, 45, 48, 163, 245n33, 260n95 quarters, 38 Quebec, Canada, 172 Quinn, J Kevin, 120, 234 quinto real See royal fifth Ra, 19 Rabot-Blaisantvest area, 188 Radia, Amir, 94 Ragan, Christopher, 14 Rand, 151 rational animal, 62–63, 73 rationality, 62–63, 121 Reagan, Ronald, 145 real estate market, 254n25 reality, number versus, 51 real wealth, virtual wealth confused with, 119 recapitalization, 113–14 recoinage, 69–70 Reconstruction Finance Corporation, 251n17 Records of the Grand Historian, 32 redesign, 222–28 reference currency, 106 Reich, Justin, 171 Reich, Robert, 123, 233–34 relationships, 29, 120–23, 225–26 relative wealth, 167 remittances, 201–2 Renaissance, 70, 78 reserves, 249n39, 250n9 resource curse, 81 Resources for Human Development (RHD), 188 Rethinking Economics, 172–73 Reuters, 136 reverse, 38 revolving-door phenomenon, 123–24 RHD See Resources for Human Development Ricardo, David, 95 Richardson, Gordon, 258n53 Rickards, James, 252n36 right hemisphere, 40 rights, property, 27–28, 87–88 Ripple Labs, 218 risk models, 155–57 Ritschl, Albrecht, 126 Robbins, Lionel, 115–16 Robinson, Joan, 150 robots, 226 Rockefellers, 122 Role of Money, The (Soddy), 121–22 Roman Empire, 24–28, 46, 50, 69, 77, 127; collapse of, 55, 56; soldier, 242n44 Roman Senate, 24 Roman system, 57 Rome, Italy, 56 Roosevelt, Franklin Delano, 8, 106, 123, 185 Rothschild, Mayer Amschel, 139 Rousseau, Jean-Jacques, 215 royal fifth (quinto real), 77–78 Royal Mint, 87, 88–90, 94 ruble, 134, 182, 183 Ruggle, John, 132 Russell, Bertrand, 33 Russia, 106, 134, 182, 193, 227, 250n6 Rutherford, Ernest, 118 Sacred Economics: Money, Gift, and Society in the Age of Transition (Eisenstein), 245n37 Sahagún, Bernardino de, 76 sakk See checks Salvian of Marseille, 127 Samuelson, Paul, 13, 42, 139, 149 Sandel, Michael J., 227 Sargent, Tom, 156 Say, Jean-Baptiste, 141 Scandinavia, 225 scarcity, 169–70, 177 Schneider, Nathan, 218–19 Scholastic economics, 62–63, 78, 80 Schopenhauer, Arthur, 55 Schumpeter, Joseph, 95 science, 78 Scotland, 98–99 Scott, Brett, 215 scrips, 8, 101, 144, 185–86 See also shekels SDRs See special drawing rights seal, 112 Securities and Exchange Commission (SEC), 123, 124 Sedláček, Tomáš, 229, 234, 255n2 seignorage, 58, 69, 200 selling, 246n7 Senate, U.S., 104 SETLcoin, 210 sex, 52 Shakespeare, William, 64 sharing, 232–34 shekels, 17, 18, 32, 39 shepherds, 11 Shiller, Robert, 155 Shock Doctrine: The Rise of Disaster Capitalism, The (Klein), 256n27 shopping therapy, 168 Siam See Thailand Silk Road, 64–65, 70, 199 silver, 11, 22, 23, 54, 59, 75, 76–78, 241n35; China importing, 82, 129; crisis, 86–88; demonetization of, 249n34; denier, 59; dollar, 79, 79–80, 90, 249n32; gold buying, 89; shekels, 17, 18, 32, 39 Silver, Morris, 241n24 simec, 189 Simitiere, Pierre Eugene du, 121 Simms, Andrew, 124 Singer, Peter, 167–68 Singh, Manmohan, 128 single currency, 181–83, 194 60 Minutes, 112 skilled wages, 247n34 slavery, 18, 28, 77 slaves, 23, 27–28 Slump Ahead in Bonds (Angas), 249n28 small businesses, 184 smallpox, 76–77 Smith, Adam, 11, 15, 19, 92, 140–42, 151, 154, 172, 205, 207, 218, 266n45 See also invisible hand Smithin, John, 14 social, 8, 168, 225, 229 Social Credit government, 185 Soddy, Frederick, 118–19, 120, 121–22, 126, 151, 164, 181 solidus, 26 Solow, Robert, 259n80 Somalia, 193 Somaliland, 193 Soto, Hernando de, 209 sous, 59, 65 southern Italy, 35 South Sea Bubble, 91 sovereign, 67, 90 Soviet Union, 67, 183, 233 spaceman economy, 169, 221–22 Spain, 80–81, 82, 129 Spanish Armada, 81 Spanish dollar, 100, 249n32 Sparrow, John, 249n29 Sparta, Greece, 227 special drawing rights (SDRs), 108, 128, 130 Sperry, Roger, 40 square numbers, 57 Srinivasiengar, K R., 40, 244n14 Stallman, Richard, 230–31 Stamp, Josiah, 249n28 stamps, 21, 38, 87, 88, 121, 201; prosperity certificate, 185–86; scrip needing, 144 See also chartalism Stamp Scrip (Fisher), 185 Stanford University, 41 Starbucks, 191, 192 state, 29, 83–84, 85, 179–81 stater, 20 State Theory of Money, The (Knapp), 42–43 Stein, Gertrude, Steuart, James, 83–84, 86 stock market flotations, 91 stores, 8, Strange, Susan, 118, 127 subprime crisis See Great Financial Crisis Subramanian, Arvind, 130 Sumerians, 15–18, 52 Summa de arithmetica (Pacioli), 57 supercoin, 214 superwealthy people, 167 supply chains, 28, 267n26 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 155 Sweat, 192 Sweden, 205 Swiss franc (CHF), 184 Swiss Wirtschaftsring (WIR) Bank, 184 Switzerland, 181, 202 symbol, 38 tails, 38, 243n8 tallies, 60 TARP See Troubled Asset Relief Program taxes, 77–78, 228 Taylor, Geoffrey, 217 teachers, 62 Temple of Artemis, 20 temples, 52, 75, 86, 115 Tencent, 193 Tenochtitlan, Mexico, 76–77 Terpin, Michael, 210 tetradrachm, 23 Texas International Airlines, 190 Thailand, 15 thalers, 79 Thales, 33–34 Thatcher, Margaret, 145 Theory of Political Economy, The (Jevons), 142 things, 243n8, 244n27 This Changes Everything (Klein), 222 Thomas, Ryland, 94 Thus Spoke Zarathustra (Nietzsche), 118 Tietmeyer, Hans, 261n10 tokens, 20–21, 30, 192 Tolstoy, Leo, 220 Toner, Jerry, 27 tool libraries, 232–33 Torekes currency, 188 Toronto Tool Library, 232 total information awareness, 121 trades, 64, 66, 80–82, 84, 246n23 transactions, money object, 47–48 travelers checks, 61 Treasury Department, 202–3, 251n19 TREZOR, 210 Troubled Asset Relief Program (TARP), 123, 146 Truck Acts, See also barter trust, 66–68, 166 Truth or Beauty (Orrell), 48 tulip mania, 91, 116, 163 Turkey See Miletus, Greece Turner, Adair, 111, 155, 180 Tversky, Amos, 166 2007-2008 financial crisis See Great Financial Crisis Two Treatises on Government (Locke), 87–88 Uber, 232, 233–34 UCLA See University of California-Los Angeles U.K Payments Council, 205 Ukrainian crisis, 134 Ulbricht, Ross, 199 unbanked, 202 uncertainty, 160–64, 162, 234 Understanding Media: The Extensions of Man (McLuhan), unemployment, 101, 178–79, 249n46 United Continental, 190 United Kingdom (UK), 109, 113 United States (U.S.), 8, 90, 96, 97, 100–110, 113, 123, 261n11; CEOs in, 225; dollar, 126–28, 136; economics influenced by, 151–52; elite running, 180; eye of providence influencing, 121; on gold, 249n38; gold standard influencing, 106; hyperinflation, 250n7; Louisiana purchased by, 100; QE in, 225; unskilled workers in, 225 units of account, 9, 44, 59 universe, 35–36 university, 62 University of California-Los Angeles (UCLA), 168 University of Los Angeles, 229 Unlimited (apeiron), 34, 35 unskilled workers, 225 upward social mobility, 225 Ur, 16 usury, 62, 63–64, 78, 234, 246n24 utility, 142 utopia, 220–38 Valovaya, Tatiana, 135 value, 40–42, 44, 74, 116; of cybercurrency, 216, 218–19; definition of, 244n14; exchange, 140–41; intrinsic, 86–88, 153–54, 205–6; investors, 161; labor as, 141; number’s relationship with, 229–30, 243n8; prices reflecting, 158, 226–27; quantifying of, 52–54 value at risk (VaR) formula, 154 Varoufakis, Yanis, 228 Vasella, Daniel, 167 Veblen, Thorstein, 168 velocity, 144–45, 185 Venezuela, 202, 214, 233 Venice, Italy, 59, 64, 246n20 Veracruz, Mexico, 75 Vespucci, Amerigo, 75 Vietnam War, 106 Vilks, Andris, 134 Virgin Mary, 115 virtual: credit, 54; currencies, 39, 47, 55, 115; economy, 170–71; money, 39, 45, 55–73, 109, 112–15; particles, 45; wealth, 119 See also female principle; male principle Visa, 109 Vodafone, 19293 Voltaire See Arouet, Franỗois-Marie vouchers, wages, 28, 225, 242n44, 247n34 Wallich, Henry, 226 Walras, Leon, 141–42, 150 war, 19, 21–22, 26, 106, 126, 186 Wära, 185, 186 Warburgs, 122 WAT, 188, 189 water, 33–34 Watt, James, 169 wealth, 56, 80–82; as absolute, 167; brain influenced by, 73; destruction, 119; distribution, 224; happiness’s relationship with, 3, 165–68; real, 119; as relative, 167; virtual, 119 Wealth, Virtual Wealth, and Debt (Soddy), 119, 181 Wealth of Nations, The (Smith), 11, 140–42 weaponization, 126 Weatherford, Jack, 115, 241n28 WeChat, 193 Weinstein, Michael M., 139 Wellink, Nout, 163 Wen (emperor), 32 West African Communauté financière d’Afrique (CFA) franc, 134–35 Western Union, 202 Westminster, 60 West Seattle Tool Library, 232 Whalen, Christopher, 123 What Is Money? (Smithin), 14 “What Is Money?” (Mitchell-Innes), 14–15, 55 “What Shall We Do Then?” (Tolstoy), 220 “What Theory? The Theory In Mad Money” (Strange), 118 wheat, 19 White, William, 153, 172, 257n43, 260n94 white gold, 20 “Why This Crisis? And What To Do About It?” (Lietaer), 176 Wikipedia, 237 William III (king), 85 Williams, Jonathan, 250n7, 250n9 Wilson, Effingham, 42 “Wisdom of Life, The” (Schopenhauer), 55 witches, 70, 115 Wolf, Martin, 156, 181 women, 68, 70, 115–17 Wonderful Wizard of Oz, The (Baum), 90 worgl money, 185, 186 work-on-demand services, 233–34 World Bank, 127 World of Yesterday, The (Zweig), 95–96 World War II (WWII), 186 Wray, L Randall, 15, 111, 133, 164 Xenophanes, 34 Xenophon, 115 XRP, 218 yin-yang system, 35–36 Young, Thomas, 217 yuan, 128–31 Zaad, 193 zero, 57 Zerocoin, 205 Zero Hedge, 190 zero-sum game, 83 Zeus, 22 Zimbabwe, 102, 137 Zimmermann, Werner, 184 Zinser, Michael, 171 Zweig, Stefan, 95–96 ... need[s] from the other, and there is no way of knowing the value of each item of each kind of goods, and of knowing the rate of exchange between one item and another item of a part of the merchandise... hypothetical, logical lines, we should naturally follow the age of barter by the age of commodity money … The age of commodity money gives way to the age of paper money … Finally, along with the. .. sported an image of the goddess Athena on one side and an owl (the symbol of the wise Athenian people) on the other The silver for the coin was extracted from mines such as the ones in Laurium,