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September 13 - September 25, 2018
For the merchants, the entire world was a single market and all humans were potential customers.
We begin with the story of the greatest conqueror in history, a conqueror possessed of extreme tolerance and adaptability, thereby turning people into ardent disciples. This conqueror is money.
Hunter-gatherers had no money. Each band hunted, gathered and manufactured almost everything it required, from meat to medicine, from sandals to sorcery.
The rise of cities and kingdoms and the improvement in transport infrastructure brought about new opportunities for specialisation.
And if 1,000 different commodities are traded, buyers and sellers must juggle 499,500 different exchange rates!
‘Everyone would work according to their abilities, and receive according to their needs’ turned out in practice into ‘everyone would work as little as they can get away with, and receive as much as they could grab’. More moderate and more successful experiments were made on other occasions, for example in the Inca Empire. Yet most societies found a more easy way to connect large numbers of experts – they developed money.
Money was created many times in many places. Its development required no technological breakthroughs – it was a purely mental revolution. It involved the creation of a new inter-subjective reality that exists solely in people’s shared imagination.
Money is not coins and banknotes. Money is anything that people are willing to use in order to represent systematically the value of other things for the purpose of exchanging goods and services.
The sum total of money in the world is about $60 trillion, yet the sum total of coins and banknotes is less than $6 trillion.7 More than 90 per cent of all money – more than $50 trillion appearing in our accounts – exists only on computer servers.
Everyone always wants money because everyone else also always wants money, which means you can exchange money for whatever you want or need.
Their worth is not inherent in the chemical structure of the shells and paper, or their colour, or their shape. In other words, money isn’t a material reality – it is a psychological construct.
Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised.
The crucial role of trust explains why our financial systems are so tightly bound up with our political, social and ideological systems, why financial crises are often triggered by political developments, and why the stock market can rise or fall depending on the way traders feel on a particular morning.
The real breakthrough in monetary history occurred when people gained trust in money that lacked inherent value, but was easier to store and transport.
When they are used for anything, silver and gold are made into jewellery, crowns and other status symbols – luxury goods that members of a particular culture identify with high social status. Their value is purely cultural.
Coins had two important advantages over unmarked metal ingots. First, the latter had to be weighed for every transaction. Second, weighing the ingot is not enough.
That’s why counterfeiting money has always been considered a much more serious crime than other acts of deception. Counterfeiting is not just cheating – it’s a breach of sovereignty, an act of subversion against the power, privileges and person of the king.
even though the closest Roman legion was thousands of miles away. The Indians had such a strong confidence in the denarius and the image of the emperor that when local rulers struck coins of their own they closely imitated the denarius, down to the portrait of the Roman emperor!
The appearance of a single transnational and transcultural monetary zone laid the foundation for the unification of Afro-Asia, and eventually of the entire globe, into a single economic and political sphere.
Christians and Muslims who could not agree on religious beliefs could nevertheless agree on a monetary belief, because whereas religion asks us to believe in something, money asks us to believe that other people believe in something.
For thousands of years, philosophers, thinkers and prophets have besmirched money and called it the root of all evil. Be that as it may, money is also the apogee of human tolerance. Money is more open-minded than language, state laws, cultural codes, religious beliefs and social habits.
Money is the only trust system created by humans that can bridge almost any cultural gap, and that does not discriminate on the basis of religion,...
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a. Universal convertibility: with money as an alchemist, you can turn land into loyalty, justice into health, and violence into knowledge. b. Universal trust: with money as a go-between, any two people can cooperate on any project.
But these seemingly benign principles have a dark side. When everything is convertible, and when trust depends on anonymous coins and cowry shells, it corrodes local traditions, intimate relations and human values, replacing them with the cold laws of supply and demand.
For although money builds universal trust between strangers, this trust is invested not in humans, communities or sacred values, but in money itself and in the impersonal systems that back it.
We do not trust the stranger, or the next-door neighbour – we trust the coin they hold. If they run out of coins, we run out of trust. As money brings down the dams of community, religion and state, the world is in danger of becoming one big and rather heartless marketplace.
Brutal warriors, religious fanatics and concerned citizens have repeatedly managed to trounce calculating merchants, and even to reshape the economy.
It is therefore impossible to understand the unification of humankind as a purely economic process. In order to understand how thousands of isolated cultures coalesced over time to form the global village of today, we must take into account the role of gold and silver, but we cannot disregard the equally crucial role of steel.
THE ANCIENT ROMANS WERE USED TO being defeated. Like the rulers of most of history’s great empires, they could lose battle after battle but still win the war.
It’s not our kind of story. We like to see underdogs win. But there is no justice in history. Most past cultures have sooner or later fallen prey to the armies of some ruthless empire, which have consigned them to oblivion.
Nowhere has this been more obvious than in the Middle East. The current political constellation in that region – a balance of power between many independent political entities with more or less stable borders – is almost without parallel any time in the last several millennia.
It goes without saying that the political, economic and social practices of modern Jews, for example, owe far more to the empires under which they lived during the past two millennia than to the traditions of the ancient kingdom of Judaea.
If King David were to show up in an ultra-Orthodox synagogue in present-day Jerusalem, he would be utterly bewildered to find people dressed in East European clothes, speaking in a German dialect (Yiddish) and having endless arguments about the meaning of a Babylonian text (the Talmud).
Imperial elites used the profits of conquest to finance not only armies and forts but also philosophy, art, justice and charity. A significant proportion of humanity’s cultural achievements owe their existence to the exploitation of conquered populations.
Even if we look beyond elite culture and high art, and focus instead on the world of common people, we find imperial legacies in the majority of modern cultures.
In contradiction to the modern Western view that a just world is composed of separate nation states, in China periods of political fragmentation were seen as dark ages of chaos and injustice.
This perception has had far-reaching implications for Chinese history. Every time an empire collapsed, the dominant political theory goaded the powers that be not to settle for paltry independent principalities, but to attempt reunification. Sooner or later these attempts always succeeded.
The benefits were sometimes salient – law enforcement, urban planning, standardisation of weights and measures – and sometimes questionable – taxes, conscription, emperor worship.
The Mandate of Heaven was bestowed upon the emperor not in order to exploit the world, but in order to educate humanity. The Romans, too, justified their dominion by arguing that they were endowing the barbarians with peace, justice and refinement. The wild Germans and painted Gauls had lived in squalor and ignorance until the Romans tamed them with law, cleaned them up in public bathhouses, and improved them with philosophy. The Mauryan Empire in the third century BC took as its mission the dissemination of Buddha’s teachings to an ignorant world. The Muslim caliphs received a divine mandate
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The cultural ideas spread by empire were seldom the exclusive creation of the ruling elite.
The process of assimilation was often painful and traumatic. It is not easy to give up a familiar and loved local tradition, just as it is difficult and stressful to understand and adopt a new culture.
The old Arab elite looked upon these parvenus with deep hostility, fearing to lose its unique status and identity. The frustrated converts clamoured for an equal share within the empire and in the world of Islam. Eventually they got their way.
There are schools of thought and political movements that seek to purge human culture of imperialism, leaving behind what they claim is a pure, authentic civilisation, untainted by sin. These ideologies are at best naïve; at worst they serve as disingenuous window-dressing for crude nationalism and bigotry.
Nevertheless, the modern Indian state is a child of the British Empire. The British killed, injured and persecuted the inhabitants of the subcontinent, but they also united a bewildering mosaic of warring kingdoms, principalities and tribes, creating a shared national consciousness and a country that functioned more or less as a single political unit. They laid the foundations of the Indian judicial system, created its administrative structure, and built the railroad network that was critical for economic integration.
Even if we were to completely disavow the legacy of a brutal empire in the hope of reconstructing and safeguarding the ‘authentic’ cultures that preceded it, in all probability what we will be defending is nothing but the legacy of an older and no less brutal empire.
nationality, and that safeguarding human rights and protecting the interests of the entire human species should be the guiding light of politics.
Today religion is often considered a source of discrimination, disagreement and disunion. Yet, in fact, religion has been the third great unifier of humankind, alongside money and empires. Since all social orders and hierarchies are imagined, they are all fragile, and the larger the society, the more fragile it is.
The crucial historical role of religion has been to give superhuman legitimacy to these fragile structures.
Religion can thus be defined as a system of human norms and values that is founded on a belief in a superhuman order.
The best-known religions of history, such as Islam and Buddhism, are universal and missionary. Consequently people tend to believe that all religions are like them. In fact, the majority of ancient religions were local and exclusive.
