> [!summary] Progressive Summary # Structured Notes ## Definitions ## Chapter Summaries ### Chapter 1 - Origins #### The left-brain dominance of money > One of the most fundamental characteristics of money is that it acts as an easily transportable store of value. The fruits of our labor can be held in a crystallised form – instead of exchanging work directly for goods, we exchange it for cash, which can then be spent at our convenience. Money therefore holds value the same way a battery holds energy, and makes it movable both in time and space (unlike some other stores of value such as land). Fyodor Dostoevsly - "Money is coined liberty." > The adoption of money was part of a generalized shift toward the dominance of calculation in our lives. The main difference between monetary transactions and other social transactions such as gift exchange is that the former involved an exact amount – you can put a number on them. They therefore emphasize the left-brain functions of logic and quantification. As we'll see, money has a tendency to colonise and take over everything that comes into contact with it, because like mathematics it is based on reducing the world to a common, self-contained system of thought. Like pure numbers, money has shed any physical attributes – luster, texture, weight – and now exists only on the higher plane of abstraction and mathematics. > > This cold rationality and exactness introduces a note of finality to transactions, because once an exchange is complete, there's nothing left over – the numbers on either side of the ledger cancel out to zero. Money builds commercial relationships, but it can terminate them in a flash. By acting as a kind of prosthetic for trust, it also removes some of our need for creating and maintaining real trust with human beings. We trust in money more than we trust in one another. Our bond is with the bank. #### Aristotle's creation myth In *Politics*, Aristotle started the myth that money replaced barter: > The more complex form of exchange [money] grew, as might have been inferred, out of the simpler [barter]. ... For the various necessaries of life are not easily carried about, and hence men agreed to employ in their dealings with each other something which was intrinsically useful and easily applicable to the purposes of life, for example, iron, silver, and the like. Of this the value was at first measured simply by size and weight, but in process of time they put a stamp upon it, to save the trouble of weighing and to mark the value. This story was picked up by medieval schoolmen in the first universities, and carried well into the 18th-century by Adam Smith in *Wealth of Nations*. In 1875, the neoclassical economist William Stanley Jevons (the same man behind [[The Jevons Paradox sets limits on gains from efficiency|the Jevons Paradox]]) introduced the notion of the "double coincidence of wants" in *Money and the Mechanism of Exchange*: "A hunter having returned from a successful chase has plenty of game, and may want arms and ammunition to renew the chase. But those who have arms may happen to be well supplied with game, so that no direct exchange is possible." In 1892, Austrian economist Carl Menger argued in *Origins of Money* that it was markets, not governments, that produced money: "Money has not been generated by law. In its origin it is a social, and not a state institution. Sanction by the authority of the state is a notion alien to it. On the other hand, however, by state recognition and state regulation, this social institution of money has been perfected and adjusted to the manifold and varying needs of an evolving commerce." Almost every major textbook, including Paul Samuelson's bestseller *Economics*, tells the same story. There is a striking continuity from Aristotle to the present day. Unlike other sciences, which have been updated since his time, the mainstream economics account of the emergence of money has remained unchanged for over 2000 years. #### Chartalism In 1914, British economist Alfred Mitchell-Innes wrote an article [[What is Money?]] # Quotes