Money shares with things like time and space the sort of obvious-mysterious quality that can utterly puzzle us. Do we need a philosophy of money? I think we do. Today’s financial crisis reminds me of the case of Bill #240 introduced in the Indiana legislature in 1897, which attempted to define Π (pi) as having the value 3.2, a kind of deep silliness that arises from understanding mathematics technically without understanding it philosophically. Imagine if we’d lacked an intuitive visual understanding of the idea of a circle, and the wheel had evolved like money in a universe where the Indiana episode was not a historical joke:
When you attempt to impose the arbitrary and contingent on things which have a hidden fundamental character, you run into trouble. In our hypothetical hexagonal-wheel world (one with no natural circles to inspire us, with Π set to 3), I imagine sophistry would have reigned. People might have been tried as criminals for traffic accidents caused by a too-hasty adoption of heptagonal or octagonal wheels (complaints in legislatures about “obscure derivative wheels that nobody understands”). Ayn-Rand-like wheel philosophers would have argued for a return to square wheels. This is not to condone crime, greed and stupidity but to point out that in hexagonal-wheel world, it would be easier to be criminal, greedy or stupid. Better truths mitigate all human failings. Einstein noted that the significant problems of life are not solved at the same level that we create them. Do we need to elevate the notion of money from the level of cultural construct, where we created our problems, to the level of universal fundamental, where we might be able to solve them? I think we do, and the first step is to start thinking of money as something yet to be discovered, like the concept of zero, or the idea of Π (or equivalently, circularity). It is not something to be invented.
Towards a Real Philosophy of Money
When philosophers consider money at all, they seem to think of it merely as an example of the construction of social reality. John Searle, in a book of that name, talks money-metaphysics, but really, he talks about language and communication, and money merely serves as an example of how we create and sometimes physically manifest shared meaning. There is one book apparently considered the classic, George Simmel’s The Philosophy of Money, which is available on Google Books. I’ve started reading it, but I find its approach dissatisfying; there is not as much ontology or metaphysics as I think is necessary. We hint at money being different when we say things like “time is money” or “money is power” or “money is the root of all evil,” but generally we don’t poke to see if there is more to these epigrams. Money is unique among human creations in attracting such metaphysical remarks. We do not remark that the wheel is the root of all evil.
We don’t seriously suspect that money might have fundamental characteristics because it seems like an invention. Designing a currency seems like a practical-aesthetic endeavor, like designing a car, that is only distantly constrained by physics, logic and mathematics. With cars, you have to dig quite a bit before you get to the underlying physics constraints (from wheels with bearings, axles and tires to the geometry of the circle; from the internal combustion engine through the Carnot cycle to the laws of thermodynamics). With money, we hit a wall pretty quickly as we dig deeper. Much of the complexity of money is in the direction of emergence: stocks, debt, derivatives, banking systems and so forth, phenomena analogous to the impact of automobiles on the sociology of suburbia and the distribution of gas stations. You have to assume a basic notion of currency as a given.
Money is closer to something like the wheel. There is much less meaningful/functional diversity possible in wheels than in cars. While money shares this low-diversity characteristic, it is not merely closer to the fundamentals. It is a fundamental. This is clear from the evolutionary direction towards simplicity. Originally, wheels were presumably just sections of round trees. Things got more complex with axles, bearings, rim-grooves, spokes and tires. With money, things went the other way, groping towards a simpler, more fundamental essence. Where possible money has shed the arbitrary and gotten simpler. In the move from barter to commodity, it shed most of its diversity. From commodity to token (backed by commodities like gold, but otherwise of nominal value), it traded intrinsic value (a variable number) for the simpler number ‘zero’ (at least as a design target). As communication improved, geographically-enforced diversity in otherwise economically-integrable regions gave way to unified currencies. From token to fiat, money shed its commodity backing and association with an arbitrary contingent reality (the scarcity of gold on earth). Each of these simplifications has had its discontents, but the evolution seems to me to arise from natural dynamics rather than some sort of political “ever simpler” camp winning.
Inventions differentiate, specialize, cross-breed and proliferate by natural selection. Fundamental discoveries converge (to cite Einstein once more) to “as simple as possible but not too simple” ideal. When your fundamentals are wrong (as with the five elements of alchemy that preceded the periodic table), your efforts to engineer an ecosystem of invention around them end up deeply flawed. Something like that seems to be happening today. We are engaged in fruitless quests for miraculous means to turn lead into gold and find elixirs of immortality.
If we reframe our exploration of money as a process of fundamental discovery rather than creative invention, we will, I believe, have achieved the right elevation of context to solve our problems. An example of the problems inherent in thinking “invention” is the following. Local currency advocate Thomas Greco said in an interview (as best as I can recollect the quote), “Money has gone from being our slave to being our master, and we have to make it our slave once more.” This sort of moralizing is just barely defensible for true inventions (such as automobiles), but it is entirely indefensible for discoveries. This sort of attitude turns metaphysical problems into moral ones, and engineering decisions (the optimal degree of localization of currency systems) into religious ones. Money can be neither our master, nor our slave, any more than time can.
So yes, we need a philosophy of money, just as we have a philosophies of other conceptual primitives like time, space, consciousness and information. To finish the analogy to the wheel, money already has the equivalent of physics (economics), engineering (banking) and technical-vocational knowledge (accounting). To start with, we must ask, as we do of any discovery quest, what is the most natural concept of money. The question we’ve been asking so far (and have never gotten beyond) what is the best design for money? is the wrong first question.
p.s. my opinion of Simmel’s book is tentative. I might change my mind as I read more
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