The origins of money and its role in modernity

Abstract

Money is a human creation arising from organic, technological, and symbolic resources. The complexity of its operations makes it difficult to comprehend. The origins of money can be dated with some accuracy, but the social and symbolic processes that led to this world-changing invention are poorly understood. One of the most persistent misunderstandings that adversely affects modern economic thinking is that money emerged from barter. As will be discussed, the origins of money have more fundamental symbolic, social, and political foundations in statecraft, warfare, religion, and gift-giving. Moreover, money develops among beings capable of considerable flexibility in combining or “blending” ideas from diverse, sometimes incommensurate, domains of knowledge and experience, and specifically among a species for whom institutions—socially constructed habits of thought and action—are ontologically criterial. This chapter aims to provide a foundation for thinking about money as an institutional semiotic system. Topics covered include money and barter; sovereign money; money and gift-giving; money and violence; the money/language analogy; and international monetary exchanges.