Tuesday, August 2, 2016

Money is a fairytale

 I recently read a book by Yuval Noah Harari called "Sapiens a Brief History of Humankind". It is one of the best books I have ever read and a real eye-opener. Here is also a link to mr. Hararis TED talk where he explains the rise of the human race.
 The main reason why humans managed to be more successful than any other animal races is our capability to imagine things, believe in fantasies and to tell each other about them. It is our capability to understand the abstract concepts without the need to see or touch them. In most they even don't have a physical form. You might think that what is so important in believing in Snow White and Red Riding Hood, but these are not the game changing fairytales. The really important ones that we firmly believe are fairytales like religion, nationality, human rights, capitalism, ownership, socialism etc. By far the most important of all fairytales is Money. All our systems and agreements are based on the belief of the common story of money. Only humans are happy to give away real useful things like apples, tools, cars, computers, houses for money - a fairytale.

In the modern technology-age the fairytale of Money has risen to a new level. Now it is not even a paper, but a number on a screen that you see when you log into your bank account or it is a number with a minus sign on your credit card account. A negative number in itself is a philosophical concept that only humans are capable of handling. More and more money nowadays is something in the bits and bites on a disk in a database in a server somewhere in a cloud. Miraculously humans have true trust that if they log into the bank account tomorrow then the number will be there. Even more wonderful is the fact that if you go and buy groceries at a self-service grocery store then you just take the shop owners things and the numbers on your account are changed. The shop owner is even happy than he traded his real milk, bread, meat and eggs to a virtual number in a database. :-)

The financial sector, central banks, Bitcoin miners and stock markets have done even more interesting things - they have built multiple fairytale layers on the fairytale of Money. Think how far from the real physical world is a fond of currency futures. :-)

I am not advocating against it. I think it is all very interesting and wonderful. :-)