Money Makes The World Go Round

In my previous blog You Don’t Own Me I cited the work of anthropologist David Graeber and his very big book Debt: The First 5000 Years. It’s not quite 5000 pages long but in his tome he explores the origins of money in debt, war and slavery. He suggests that debt existed before money and human societies have been divided between debtors and creditors for a long time. Debt peonage is when someone has to pay off their debts by working for someone else (i.e. if they can’t afford to pay off their debt with cash). It’s also known as debt slavery and people have been doing it throughout history – the priests of Sumerian temples would make peasants work the land and pay with produce in return for being able to live on the land and the Romans would often enslave those they captured and make them work in their houses. Slavery is the ultimate form of ‘ownership’ whereby someone has complete power over someone else’s life (the slave ‘owes’ their life to the their master). However, slavery wasn’t the only way to increase one’s power, money was also a good mechanism.

Let’s say the Roman Empire is expanding and they’ve just conquered Britain, the Roman Emperor won’t want to kill all the Britons because not only will many of them make good house slaves but they can also be used to ensure the British economy keeps going. Of course, that’s a British economy that now serves Rome. What the Emperor does is issue all his soldiers with Roman coins which he can let them spend in Britain. The soldiers will be expected to pay tax and they have to do that with Roman coins, so coinage in this regards is a good way of ensuring the soldier’s money goes back into the Roman Empire’s economy. Meanwhile, the Britons that haven’t been enslaved will want to attract the custom of the soldiers so they’ll get busy making and selling stuff for the soldiers, which will be paid for with Roman coins. Furthermore, the Emperor might also wish to impose a debt on Britain – the war machine costs a lot of money and invading Britain proved quite expensive, so he’ll make them pay it back. Yup, the conqueror is enforcing a debt on the people he just conquered. He can do this because he’s the winner and he’s got all the power in terms of brute military strength (the soldiers) and economically (in terms of all the Roman coins). So this is how you grow an Empire – conquer people, expand your currency and force your conquests into debt. It adds a twist to the famous phrase “man is born free but everywhere he is in chains”…or in debt perhaps.

And so on and so on for thousands of years argues Graeber. Even now we still live in a time of debt – whether it’s the banks offering giant loans to help people buy houses or it’s the World Bank loaning money to developing nations to help them get on their feet whilst ensuring they’ll be in debt for years. However, things are different now because the value of a currency is no longer defined in terms of some underlying precious material (i.e. gold) for which it could be exchanged. It’s not as if for every £5 we have there’s a £5 amount of gold hidden in a vault somewhere. We don’t have real money anymore, instead we have virtual money that exists as numbers on a screen. Sure, we still use coins and notes but those things themselves are worthless, it’s what they stand for that counts. However, as money is virtual it theoretically means there is no limit to how much money we can have – numbers on a screen are limitless after all. So we can keep spending more and more and getting in bigger and bigger amounts of debt for longer and longer, hurrah!

But why this brief history of money? Because money has been and continues to be a big deal – it makes the world go round, or so Liza Minelli sings in Cabaret. Currently, the US dollar is the most powerful currency in the world and the States put a lot of effort into ensuring it remains so (read that as military force, foreign policy and diplomatic effort). Money is one of the most important numbers we’ve got – it’s how we value almost everything, from the price of a lemon through to the price of an hour of someone’s labour. And because money has been such a big part of our societies for so long its effects have reached far beyond the economic realm into the political and personal realms as well. To be continued…