Here are my personal notes on the 401 pages of Money: The Unauthorized Biography by Felix Martin (no relation to the great tango dancer Ricky Martin)

Money and money

  • Abstracting disconnects. Abstracting reality disconnects you from its actualities.
    • (× of Montreal (and backup vocalist Rebecca Cash) : “amputated from humanity on some life-long intellectual retreat” (seen live); gemba)
    • Land transactions, impacting hundreds of thousands of people
      • “Spain sold Yap to Germany for the sum of $3.3 million.” (× Colonization of America)
      • Humankind’s tendency to privatize nature, imposing constructs onto nature, and manipulating these constructs among themselves, all the while being completely oblivious to the actualities of the lands being discussed (cf the people living there). Literally “being at the hands of”.
      • Property uses the same mechanisms as money. They rely entirely on people (repeatedly) affirming its validity. If people reject the model, the whole thing crumbles. Money, just as property, relies on people’s arbitrarily agreeing on its validity and sustaining it.
        • “Money exists not by nature but by convention, and it is in our power to change it and make it useless.” (Aristotle)
    • Holocaust as bureaucracy
  • Money reduces everything to a single dimension: economic value.
    • The simplicity of this worldview makes it compelling. Society can be readily organized based on this one criterion.
    • Pursuing the wrong things. When you switch to a paradigm, you come up with goals or possible “achievements” for that paradigm and pursue them — though they might be completely fickle, because you have the wrong paradigm.
      • For example, rich aristocrats in Bologna competing with each other to build the tallest tower in the 13th/14th century; delusions of grandeur (≠ essentialism).
    • Because money extends beyond the physical, money lets one assign objective value to non-physical things.
      • Setting a price to non-physical things is not new: Catholics atoned for sins first through penitence, but later through financial contributions (Catholic indulgences) — one of the reasons for Protestantism.
  • Money transcended its initial field of application (the buying and selling of goods) to govern the whole of life: “what is the price of a life?”
    • On the flip side: Improvise and bringing other domain-specific paradigms into the rest of your life.
  • Two conceptions of money
    • The fallacious one: money is an evolution of barter, solving the problem of having to possess a commodity directly relevant to the other party when buying from them.*
      • This theory purports that money is an evolution over barter; but there is no anthropological record of direct barter ever being prevalent in any historical society.
        • Instead, societies were using gift economies or credit systems ­— already way back.
    • The correct one: money is a system of transferrable credits.
      • Money requires keeping track of credits, the credits being transferrable, and accepted as having value.
  • Keeping track of credits
    • Money doesn’t have to keep track of outstanding balances continuously; it can do so periodically. (× blockchains; Polkadot; Lyons fair)
    • Currency is (non-essential) representation of debt.
      • Some societies have the knowledge (of balances) “in the head” — obviating the need for currencies.
        • In the island of Yap, one family was known by everyone to be rich, in spite of their “fei” (massive boulder (as currency) representing their riches) having sunk to the bottom of the sea.
          • The “fei” (currency) is a recording mechanism, just a “pointer” to the family’s wealth; if the “pointer” (token) is lost, the wealth remains. The real wealth is intangible, abstract; a human construct, independent from physical ownership.
            • Inner treasures follow you everywhere. The good thing about abstract things (“inner treasures”) is that you cannot lose it just because of losing or damaging something physical. The bad thing is that it’s hard to get rid of and follows you everywhere. You cannot clear a debt just by “losing” the IOU.
      • Societies followed that trend and relied progressively less on physical ownership to represent credit (and all the more so today, with the disappearance of cash).
        • Money started with “bearer securities” (as opposed to registered securities) (e.g. Exchequer split tally sticks representing a debt from the government, 1100-1800 England; cash, precious metals, vouchers, cryptocurrency private keys)
          • Bearer securities have the benefit of being anonymous and requiring no paperwork, at the cost of risking theft.
        • Manipulating abstract concepts of ownership: “Our silver dollars stacked in the Treasury in Washington, which we never see or touch, but trade with on the strength of a printed certificate that they are there.”
        • Currency purely as tokens: “For a century or more, the ‘civilized’ world regarded as a manifestation of its wealth metal dug from deep in the ground, refined at great labor, and transported over great distances to be buried again in elaborate vaults deep under the ground.”
        • Much of today’s money is not backed physically.
      • Money is not about the coins and banknotes but about the underlying system.
  • Credits being transferrable
    • Money requires a mechanism to prove the authenticity and validity of the credit to be transferred or redeemed — a means to dispel forgery.
      • For example, bringing a split tally stick to the Exchequer’s to verify its authenticity or redeem it.
      • This can be done in a centralized (sovereign; banks) or decentralized (cryptocurrencies/blockchains) way.
      • “What matters is that there are issuers whom the public considers creditworthy, and a wide enough belief that their obligations will be accepted by third parties.” (liquidity)
    • Failing that, money requires trusting the people you are doing business with (or having an institution or person to vouch for them).
      • Alternative moneys can emerge most easily in tight-knit communities where everybody knows each other and their creditworthiness — or through the mediation of somebody who does (“the local bartender”): neighbourhood bars and community spaces as exchequers (Ireland).
    • “Without transferrability, it’s just a loan.”
  • Money accepted as having value
    • “Anyone can issue their own money — the problem is getting it accepted.”
    • Money is a social technology and only has value within society.
      • Money is very much context-dependent and has little use in a society where its role has been relegated (USSR; The Golden Calf)
    • “Credit is an opinion generated by circumstances and varying with those circumstances.”
      • Preventing inflation is not enough — credit is just as important.
    • Elementary services / commodities as the “standard currency” (the final thing against which you can redeem things) in certain Russian trade networks.
      • “Take away its social context and a wealthy man might just die of hunger.”
        • Money doesn’t make you self-sufficient.

Money and society

  • Money transformed social obligations into economic ones. From tradition, honour and duty to an explicit monetary obligations (× from “in the head”, to “in the world”, Design)
    • Civic duties became remunerated
      • Greeks’ voting at the assembly.
      • French corvées. Money became an ever more visible binding element: in France, corvées (duty to work a certain amount of days a year for the sovereign) were first replaced by paid corvées, and eventually by tax (to pay hired workers).
  • Money is political. Defining the value of things is political (who you decide gets “rich”, based on what; what you decide to value in a society). Such political questions is the precinct of the government — hence currencies following national boundaries; alternative worlds.
    • Using a money (supporting a money) can be an ideological, political statement. (Refusing to play into a certain system of values.)
  • Money doesn’t have to rule a society. In post-WWI USSR, workers were paid in (food) vouchers; thereby containing the role of money in society (rationing).
    • Industries across a supply chain can collaborate to create a monetary system. (× “in-group” (nudge); create clubs)
    • Polkadot as a sovereign money, with different sub-sovereign “moneys” living inside it, settling internal balances themselves.
    • Private moneys / value networks (e.g. gift economies, anti-capitalist/volunteer-run organizations) can be a means to rebel against the sovereign money and government (x parallel institutions (Zapatistas, Sering, Black Panthers, etc.))
    • Imposing duties on the rich, as a way to not lose sight of what is important, what the end goal is; to not make money be the be-all and end-all: Greek liturgies, where wealthier citizens would be selected at random each year to fully fund a community project. (× Greek philosophers’ “the wealthy shouldn’t use money”)
      • Demanding to fund; rather than simply taxing (wealth tax), as a way to make more immediately visible the use of the money being “taken” — and with the added benefit of the “funder” taking ownership of the project (though in the case of Greek liturgies, not having the choice of the project).
    • Constraining the government by regulating seigniorage; constraining banks by distinguishing investment banks from commercial (popular) banks.
  • Money is a peer-to-peer technology (though only in part, as controlled by financial institutions or the government), enabling people to trade among themselves.
  • Because there is no intrinsic limit to how much money one can acquire, money activates avarice and greed in people — and if money becomes one’s paradigm, corruption, as the end justifies the means.
    • Money is never something you can have “too much of” — money is not perishable, provides a stable ground.
  • Money enables social mobility (though can increase disparities); people can now work their way up social classes using money.
    • On the flip side, a lot more is dependent on your money. If you lose your money, you now lose your value, status, friends.
  • The advent of money created profitable positions based on purely abstract manipulation (× hands-off traders, A Splendid Exchange): bankers. (“Rigging the game.”) (× division of labour; high-value added jobs/transformations (× Toyota) (hence also: being smart about money, understanding it and making use of it)
  • “Lending money at interest is unnatural” (Aristotle); isn’t an act out of “good will”; is “interested”.

Money and government

  • The government benefits from everybody using its money, as a means to have more leverage over its citizens (e.g. seigniorage).
    • Only a single entity is allowed to mint money.
    • Because of this, governments tend to oppose alternative monetary systems, as they threaten their power.
  • The government (sovereign) is (the most) creditworthy because of its ability to deploy authority to “gain money”…
    • …through taxation — infinite money — though is a lot of overhead
    • …through seignorage: readjusting the face value of (already minted) coins.
      • A coin’s face value needs to be higher than its melt value.
  • The government’s authority in internal markets gives it an advantage in external markets (e.g. generating more money internally to buy more foreign riches)
  • Having a fallback makes you more likely to take risks. (× foam pits) — for better or for worse.
    • Knowledge of a fallback reduces engagement and full commitment (“skin in the game”). Assume no God.
      • (Or assume God, and go all Untethered Soul)
    • Abusing fallbacks. (Moral hazard.) If banks know that the government has their back to cover losses if things go wrong, what prevents them from deliberately using this, rather than only as an emergency solution?
      • Banks took more and more risks because they knew the government would support them if things went wrong; it eventually led to the Great Recession.
        • The Great Recession was also caused by “shadow banking”: parallel unregulated trading of (rated) credits.
      • Make failures costly, though offer a fallback.
        • Being assisted has to be a worse deal than being sustainable.
  • There is tension between who money is controlled by and whom it should serve. Banks and the government have authority over money, though it should work in the interest of the people.
    • Safeguards can be put in place to address that. “What if the sovereign were to use its near-monopoly on money for its own gain – for example by over-issuing money in order to fund spending simply to secure its popularity or re-election?”
    • Just like money can be seen as a system of transferrable credits against the sovereign, can it be seen as a system of transferrable credits against society as a whole.
    • Because of government emergency relief, taxpayers unwittingly share in the losses (though not the gains) of banks’ blunders.
  • Favouring equity over debt (John Law’s strategy): letting creditors replace their debt claims towards the sovereign, with equity in new government ventures (e.g. French North America)
    • From purely transactional dynamics, to being involved with (having a vested interest in).
    • “Because money (debt) is linked to production (and endeavours), and the world is an uncertain place.”
  • Money is imperfect, undergoes crises, with debts eventually becoming unsustainable, needing a clearing (crisis; intervention).
    • Jubilee (periodical clearing of debts every 50 years for Hebrews) as divine intervention (× Lyon’s Fair periodic clearing)
    • Jubilees as fresh starts; tabula rasa; renewing oneself.

Money and banks

  • A typical business possesses a lot of assets, trades a little bit. For a bank, it’s the opposite.
  • A bank’s job is to manage the synchronization between deferred loan returns and due payments, so as to always have cash on hand.
  • One of the bank’s secondary jobs is to manage the (un)creditworthiness of loans by bundling them with more creditworthy loans. This job is being increasingly deferred to specialized institutions (credit rating agencies).
    • The “in-group” trading of such “rated” credits brought about an unregulated, parallel trade (money), which eventually led to the subprime mortgage crisis.
  • Public banks as a splendid exchange: marrying the authority of the State with the expertise of bankers.

Counting 101

  • Accounting required recording time and sped up progress in timekepeing, just like maritime travel (needs expedite progress)
  • Use symbols to reason about more effectively and more simply. (Mathematics as simplifying thinking through abstracting into symbols and manipulating symbols (by means of intuited theorems) — layers of abstraction) Symbols are more malleable and easier to reason about. (× numbers, music theory, and many other models — coming up with a simple model for things — incidentally as how the brain works, seeing patterns, x conceptual models — (effective) models as how expert minds reason and understand some thing))
    • Successively:
      • From correspondence counting using physical tokens, to using inscriptions on wet clay
      • From one-to-one inscriptions to symbols for “5”, “10”, etc. (“macros”; grouping; seeing as a unit). Makes reasoning about (and manipulating) big numbers easier.
      • Decoupling the quantity from the object being counted: from “5 sheep” to “5” “sheep” (the beginning of abstract numbers a.o.t. concrete numbers).
        • From abstract numbers to abstract units. The General Conference on Weights and Measures (1960) put an end to different units being used in different domains.
          • Domain-specific units made more intuitive sense historically, and to an extent still do and can still be useful or more relevant…
            • …though are in the way of trade and international commerce, necessitating standard units.
              • Collaboration requires a common language. Trade needs standard units. (× The Toyota Way & standardizing processes)
          • Beyond just using different units for different purposes, pre-Napoleonic France had different standards for one same unit within the same region — the definition of a mess.
            • Napoleon was influenced by the Roman Empire’s standardization across the board to rule effectively over its vast empire (× The Toyota Way)
    • Increasing the malleability of the symbols: differentiating between what is being counted first through the physical medium, later through a written symbol.
    • Clear thinking cuts across time, space and domains. Counting evolved to be analogous to functional programming, Unix philosophy, etc. The hallmarks and characteristics of clear thinking (simplicity, structure, standardization, acuity) have always been the same everywhere and everywhen. Universal principles of good thinking.
    • Writing enabled the creation of symbols (as well as their recording and clearer manipulation) — a very powerful tool. (× magick, psychodrama, etc: as other types of symbols one manipulates)
  • Economic value is a property of social reality (while SI units are properties of physical reality) — as such more difficult to measure, more subjective.

Vermicelli Miscellaneous

  • Sparta as the epitome of totalitarianism: young babies unfit for military exterminated; children separated from their parents to enter the military from age 12 (communal/military living trumping the family institution)
    • “An ideal State doesn’t need money” (e.g. totalitarian) => Sparta as an example, very opposed to it.
  • Travel to gain new knowledge. The Greeks learned literacy and numeracy from the Phoenicians, “business partners”.
    • Appropriate methods from other cultures or domains, transplant them into your environment and bring them to new heights.
      • Because of their own specific culture, the Greeks managed to use literacy and numeracy (learned from the Phoenicians) to develop scientific thinking, philosophy, mathematics, law, rationality. (× philosophers and their mentors) (cultural appropriation revisited; à la manière de)
  • We only become aware of ubiquitous things taken for granted when they get disrupted — health, money, safety.
  • Money (just as existence, pleasure, relationships and many others) – as a force, a spirit of its own, existing since time immemorial and coming up time and again throughout history — as a character in a play, with its own idiosyncracies and mysteries, and which we are trying to understand, progressively make sense of.
  • “Never let a serious crisis go to waste”