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Money: Another Religion Created by Men

Kirjoittanut: Flóra Lang - tiimistä SYNTRE.

Esseen tyyppi: Yksilöessee / 2 esseepistettä.

Money: The True Story of a Made-Up Thing
Jacob Goldstein
Esseen arvioitu lukuaika on 6 minuuttia.

I just experienced one of the most eventful journeys of my life. I travelled through a historic timeline focusing on money. How we came from trading to bitcoins through IOUs, gold and silver coins, the first stock market and many failed attempts (by men) on establishing a system that, to this day is still not perfect. Let me take you along and show you around!

At first people didn’t have to believe in money. Although there was a token of paying someone, it wasn’t so theoretical. Later, even until the late 1800s, money was still backed by gold and silver. So, when the regular citizen went to buy the bread, in their head they exchanged (in other words just traded) the piece of paper they got from the bank. They thought that money is money. That the “dollar today is the same as the dollar 1 year ago”. They didn’t see the big picture, but at that point in time, they needed that peace of mind.

Over time people in Europe started to think that there is more. There had to be more. One of the first famous and maybe most interesting character to me was called John Law. He was born in Scotland (1671), into a rich family. He was a bright young man, who excelled in mathematics. His father died early on, so Law suddenly got a big chunk of money from the heritance, which he gambled away just as quick. Details are unknown, but he basically got into a duel with a man named, Edward Wilson. Law won, but as dueling was illegal in Scotland at the time, he was still sentenced to death. Fortunately for us, he escaped and that is how his fascinating, but somewhat tragic life story would become so well-known. After he ran away, he started “gambling” his way through Europe. The book’s word was gambling, I would disagree. He was using mathematics, mostly probability counting to get money, which he applied later at insurances. His lifegoal was to solve the economical problems of a nation, any nation’s really. To speed the story up a bit, he arrived at France, made friends with the Regent of the country, who had the all the power (until the new King Louis would grow up) and then created the Royal Bank for France, which was although backed by gold, but people couldn’t use it, so everyone would use the paper. To take something smart from the Dutch, he introduced the stock market of France, that was stationed in New Orleans, Mississippi, right until he made a mistake. The bank went bankrupt, the country was in debt again and he once again had gone into exile and died a few years later.

For some reason, Law’s story stuck with me throughout the book. He did all the good things, but he still failed, because of something he couldn’t control. The system he created was great, but he wasn’t perfect as an individual. And of course, no one is perfect, but that usually doesn’t mean nationwide chaos. The true reason for the chaos coming after him, was France itself. In England he might have been very successful, but in France, as it was an absolute monarchy and the regent himself gave him power, there was nobody (besides the regent himself) to hold him accountable. Nobody to correct him, nobody to really supervise him. He was all alone, making one mistake that cost him his freedom in not just one country, but two. In my opinion he was a genius, and I am looking forward to learning more about his life and learning from his mistakes.

Another interesting inquiry that the book mentions, is how light has affected the economy. People in ancient Babylon could only afford only about 10 minutes of artificial light, using sesame oil, on a day’s worth of salary. It meant that they could only work from dawn to dusk, thus their productivity was limited. However, since Thomas Eddison and his invention of the lightbulb, for a day’s salary people were now getting 20 000 hours of artificial light. The productivity has grown.

In the past few thousand years money came and went. It was like a ridiculously long Groundhog Day re-introducing and adding things to a previous concept. “Development is not a one-way street. Civilizations don’t just get richer or stay the same. Sometimes they become poorer, generation after generation. Sometimes money itself disappears.” To me it was mind-blowing to read that by 1200 AD, China had already used a similar way of paying as today and that they had the most advanced economy and technology in the world. Then came the new emperor from a poor family who wanted everything back, so after about 250 years of using paper money (longer than us, nowadays), China went back to the past. Similar things happened in the USA in 1828 concerning the central bank, and a bit earlier in France when we look at the life of John Law. A brilliant quote from the book: “What is the thing that is like a piece of paper from a goldsmith in 1690, or a deposit in a bank in 1930, or a money-market fund balance in 2007? When everybody who holds that thing decides to cash in at once, the world will get very ugly very fast”. History tends to repeat itself.

Moving forward from 1925 in Europe (1933 in the US), when the gold standard was left behind, money became more of an abstruse thing. In my mind it had become a religion. Money from now on was just a piece of paper that everyone agreed (or was forced to agree) to use. It became something, that had to be used and had no physical thing behind it. Just a token with the true value behind the curtains. “Money is an enigma. It only exists because we believe in it”.

I was born in the 21st century. I do not question money. It is something precious, it has a higher power that I cannot understand. It is above me. It is something that for what, I put most of my life up to get. It is exactly like a religion. A religion that I was born into. But think about the people 100 years ago, who were overnight made to believe in a thing that they couldn’t really measure, that seemed cold and impersonal, and what banks could suddenly create with even less effort, than they could before. It must have felt like magic, magic of the dark kind. I feel for those people, but to me money is not impersonal. One of my favorite paragraphs from the book exactly describes how I feel: “Money isn’t just some accounting device that makes exchange and saving more convenient. It’s a deep part of the social fabric, bound up with blood and lust. No wonder we get so worked up over it.”

And just like any other religion that stuck, money and the whole process of getting where we are today in the economy, was created by men. I am not saying it is bad. We’ve come a long way and the men along the way have contributed a lot. Even the once that have failed. Every step, we took led up to this moment, to this pretty okay moment. I could be wondering what would have happened if women would have gotten the opportunity to contribute as well, but I would never get the answer to that. So instead of wondering, I want to see more women take the directive on these important matters, and for it not to be obvious everything new and great, will be created by men. I hope the next and extended edition of the book will be more diverse.

Goldstein woke my thoughts, which led to a topic that he only partially discussed but left the reader to continue the process. And that topic was the relation of money and culture. When he was writing about how and why euro, the currency was introduced, both my heart and my brain stopped a beat. Is it worth giving part of your autonomy and a piece of who you are, only to protect yourself and possibly the coming generations? France and many other countries thought so, because not long after the Berlin Wall went down, Germany was given an ultimatum, which would later drive them to join this new and unified economic system, the eurozone. This got me thinking about globalization and past historical events from a new perspective. How many times has a nation gave up something for the greater good? For humanity? Is culture even important, having all these countries, languages, and traditions?

Jacob Goldstein is not just a writer; he is a teacher to me. I never thought the book was boring or too difficult. He explains terms at a relative ease, terms that I have heard before but could never wrap my head around. His style is gripping and entertaining. He uses easy and everyday words, but in a way that they would construct something beautiful.

I believe this book wasn’t the regular book of choice for this course. I didn’t learn anything practical from it. I haven’t received any great tips or tricks from the author. I cannot include myself in the stock market, even getting a loan might be difficult. But I think I got a lot more. Besides understanding and learning a bunch of terms, concepts, and historical facts about money, I discovered deep, almost religious-like emotions that connects me to it. Money used to scare to me. What if I lose it or mess up something? What if I have too little? What if I have too much on me? Just like in a religion, I wanted to be good at, be worthy. But I think I am not that scared of it anymore. I think we can live side-by-side, in true symbiosis.



Goldstein, J. 2020. Money: The True Story of a Made-Up Thing

  • soonie

    I learned a lot from this essay! Your essay wants me to read this book. Really great job!

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