Primitive money and Monetary Theory I

1 .- Primitive money and Monetary Theory.

 

1.1.- Notes about the ecology of money.

Translation of an article published in Spanish: “El Eco Filatélico y Numismático”

(January 2003). Vol. 59 (n. 1104): pp. 46-47.

 

Before the invention of coins, in the form that we know today, and which serves a purely economic function, there were other types of currency (which are still used in some regions of the world) that served to maintain and develop social reproduction, ensuring a balance of relations between individuals in the group and with other different groups over time. These "noneconomic" coins were used on certain occasions and for a specific purpose, such as marriage dowry (bride money), compensation for assault ("blood money"), ritual gifts, to involve reciprocity or not (the "Potlatch" of American Indians or "Soulava" and "Mwali" among Melanesians) etc ... These coins are objects full of symbolic value, which soften the social relationships between different populations, making "hostility" into "hospitality" and "competition" in "partnership", playing an important ecological role in the intra-specific relationships, in the “Homo sapiens” species.

 

Over time, the "economic" money or our real money has been imposed (the Spanish word "dinero" comes from the Roman monetary unit "denarius"), and replaced all other types of currency appropriating their functions. Asia Minor metallic coins spread rapidly throughout the Mediterranean from the eighth century BC., becoming an essential tool in the process of expansion and conquest of the Persians, Alexander the Great and, later, Roman, Carolingian, Muslims, etc ... The conventional economic currency (Phoenicians and Carthaginians shekels, Greek drachma, Roman ases, sesterces and denarii, Muslims dirhams and dinars, Carolingian deniers ...) was a very important instrument in the fiscal strategy of established power, while at same time, also favored commercial development. Therefore, it is not surprising this initial success of its implementation in the places where an empire or a powerful state exercised its authority or influence.

 

The other types of currency (not commercial), were being relegated to the unknown regions of the world, but in some remote corners of the planet, they are still used daily (such as "Tambú" shells from the Tolai people, the "shell money" used in the Trobriand Islands or  the "Kina" used in the ceremony of Moka, in the highlands of Papua New Guinea.

 

However, in recent years we have lived, without realizing it, one of the most important revolutions experimented by the currency throughout its history. It is the sudden appearance of the "electronic money" or "information currency". If we calculate the millions of dollars (or other currency) changing hands in world trade in 24 hours, we can see that all the money coined or printed (ie, all notes and coins in circulation that exist in the different countries of the planet), would hardly present a small percentage of what circulates daily. Where is the rest of the money from?, it does not physically exist, ie does not have a material existence in notes or coins, but is an electronic information contained in michochips of credit cards or in the bank information systems. Our coin besides has a strong traditional and conventional symbolic content, although originally it was gold and silver, but now it doesn’t exist physically, and never before has there been so much faith in the world (as the Catechism says, faith is believing what is not shown). So, paradoxically, when religious beliefs are in decline, it when we have more faith (in the money) in the world.

 

E-commerce spreads rapidly throughout the planet, and today through many companies (like Paypal which has more than twenty million users worldwide), we can make a payment or make a charge from a remote Spanish village to a trading house in Singapore or New Zealand in tenths of seconds, because this "money" can travel at nearly the speed of light.

 

This is one of the advantages / disadvantages of Globalization (or McDonaldization “sensu” G. Ritzer), a phenomenon that although, at first glance, seems positive and symbolizes the progress of humanity, satisfies, as in nature, and generally in all systems (especially in the ecological system or ecosystems and the economic system) the famous principle of "St. Matthew": “Those who have more” (money, resources, information, power, ...) “will be increasingly at the expense of those who have less”, that increasingly will have less (based on a parable from the Gospel of St. Matthew).

 

There are affinities between Ecology and Economy, words almost synonymous, and before the invention of the word "ecology" (Haeckel, 1869), some naturalist as Linnaeus used the expression "Economy of Nature" in the XVIII Century.

 

Five millennia away between primitives “cowrie shells”, used as currency in China, and our virtual money, stored in credit cards and computer systems.

Focussing again on the role of money in the "economic wealth" of a society, this wealth does not depend only on the amount of existing money, money must circulate, and if the flow is faster, better. Economic growth means more production of goods and services, with a greater and more rapid flow of money and this can be done through a grant of energy (fossil fuels) that accelerates the system. Moreover, current technology has also maximized the mobility of money and its speed of travel from one place to another. Natural systems are ultimately a cycle of materials, that maintained and developed its internal structures due to a continuous flow of external energy (sunlight), that enters and flows through the system. Identically, the economic system structures are maintained by a "money flow" that circulates in the opposite direction of goods and services.  Curiously this "economic money", was invented 28 centuries ago by the Ionians bankers, using little metallic pieces of "electron" made only of matter (atoms of gold and silver), but now, money is pure energy, transmitted from one place to another, by the atomic "electrons". Some ecologists (E. Odum, 1988) have even come to establish an equivalence between the U.S. dollar and the amount of solar energy  (1 $ U.S. = 2.6 billion joules of solar energy).