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Notes on video lecture:
The Essence of Money
Choose from these words to fill the blanks below:
barter, Africa, 5000, bits, Uganda, cigarettes, coral, favors, health, complex, exchange, technological, subjective, seashells, villages, empires
three main forces that drove humans to unify: money,               , and universal religions
the history of money
hunters and gathers had no money
each band hunted, gathered, and manufactured almost everything it needed
they didn't buy and sell anything
some members had skills that others did not but they lived in an economy of              and obligations
e.g. boot repair from one person who can make boots
some items needed to be obtained from other bands, but this could be done by simple barter
e.g.                    for flint
the agricultural revolutions in the beginning changed very little in these arrangements
most people continued to live in small communities
ancient villages self-sufficient with a little              with outsiders
rise of cities          years ago
brought about opportunities for people to specialize in doing just one thing well
professional shoemakers, carpenters, priests and soldiers
small                  did not offer enough market for people to only be a shoemaker, but cities offered this
in villages peasants began to specialize more and more
one village would produce mainly olive oil
based on geography: your area is not good for wheat but for olive trees
bartner could never form the basis of a                economy
you produce the best apples in the entire province
one day you need shoes
you take your best apples to get new shoes
1. too many                  rates
need to know how many apples equal a pair of shoes
with 100 commodities, 4950 exchange rates have to be known
1000 commodities, 499500 exchange rates need to be known
2. barter is not always possible
shoemaker may not need apples when you need shoes, he may need medical car
three and four-way transactions become to complex
the solution to barter which led to complex economies was the invention and development of money
money was developed many times and in many places in history
money required no                            breakthrough, it was a purely mental and psychological revolution
the creation of money simply meant the creation of a new inter-                     reality, something that many people believe in together (that specific paper and coins have a specific worth)
money is not coins and money is not bank notes
money is anything that people are willing to us in order to represent the value of other things for the purpose of exchanging goods and services
the value of money depends on our imagination, not on the worth of the material from which money is made
there have been many types of money
for us the most standard type of money is a metal coin and a paper bill
but money existed long before the invention of the first coins or bills
many cultures had complex economies without coins or bills, e.g. shells, cattle hide, grain, beads, clothes
coral shells were used as money all over             , South Asia, East Asia and Oceania
even in the early 20th century in             , then part of the British Empire, you could still pay taxes with coral shells
in Chinese script, the initial sign for money was the sign of the            shell
in prisons, money often thrives in the form of                     , and is accepted currency even for prisoners who do not smoke since they know they can trade them for good and services among the prisoners
in fact, coins and bank notes has become a very rare form of money
most of the economic activity done today is not done with coins and bank notes
in 2006, the sum total of money in the world was estimated at about $473 trillion, today it is somewhere in excess of $500 trillion
yet if you take the sum total of all the coins and bank notes in the world, they are worth only about $50 trillion, so only about 10% of the money exists as physical cash whereas $450 trillion exists only on computer servers
the overwhelming majority of money today exists as electronic bits which we move from here to there
most business transactions today are done by moving electronic data, which is the dominant form of money today
if everyone at one time were to go to the bank and demand to have their money in the shape of bills and coins, banks would collapse, since there are not enough coins and bills to do that
we still hear in the news about governments printing money, but they often don't really print the paper bills or create coins, what actually happens is e.g. the Chief of the Federal Bank in the United States goes to a computer and where there is a number $50,000,000, he changes the first zero to a two and, hocus pocus, it now says $52,000,000. This is how money is printed today.
as long as people are willing to exchange goods and services for moving          from one place to another, this is perfectly valid money
in order to have complex markets, you must have money, since money enables you to tell the relative value of goods and services in the market
the most basic quality of money is that everybody always wants it, and the reason they want it is because everybody else wants it, since when you have money, you can exchange it for anything you like
money is a universal medium of exchange that allows you to convert almost anything into almost anything else, e.g. with money, you can transform money into shoes, or more abstract entities such as transforming              into justice, e.g. a doctor treats someone illness, then takes the money and hires a lawyer for some issue
money can also be stored and transported easily
The Context of History and Our Extended Human Family
How Walking Upright Led to Better Social and Cooperative Skills
The Importance of Fire and Cooking
Why Did Other Human Species Become Extinct?
The Cognitive Revolution and the Beginning of Human History
The Language of Homo Sapiens
How Fictive Language Enabled Larger Social Groups
The Power of Imagined Realities
How the Ability to Tell Stories Enabled Humans to Cooperate in Massive Groups
The Cognitive Revolution and the Variety of Human Communities
Spiritual Beliefs of Early Humans
Politics and Warfare of Pre-Agricultural Societies
45,000 Years Ago: Human's Decimation of Australia's Large Mammals
14,000 BC: Human Migration to the Americas
Agriculture: The Good and the Bad
10,000 BC: Agricultural Revolution
The Origins of Agriculture
The Code of Hammurabi and Other Imagined Realities
Inter-Subjective Reality and Romantic Consumerism
The Human Brain's Outsourcing of Mathematics
Unjust and Imagined Hierarchies
Imagined Hierarchies in History
Culturally Defined Gender
Three Theories of Gender Domination
The Direction of Humankind: Global Unity
The Essence of Money
The History of Money
The Historical Definition of Empire
The Relationship between Science, European Imperialism and Capitalism
Science, Capitalism and European Imperialism
Columbus: Last Man of the Middle Ages, Vespucci: First Man of the Modern Age
European Empires, Science, and Capitalism
How Capitalism is Based on Trust in the Future
On the Interdependence of Science and Capitalism
How Capitalism Enabled Small European Countries to Explore and Conquer the World
The Relationship Between Capitalism, the Slave Trade, and Free Market Forces
Industrialization, Energy and Raw Materials
The Second Agricultural Revolution and its Effect on Animal Treatment
The Ethics of Capitalism and Consumerism
On Limitless Energy Resources and the Hegemony of Modern Time Schedules
State/Market vs. Family/Community
Humankind's Rigid and Violent Past, and Flexible and Peaceful Present
Reasons for Our Current Unprecedented Era of International Peace
Three Theories on the History of Happiness
Psychological and Biological Happiness
Measuring Human Happiness
The Future of Cyborgs and Robots
What Do We Want to Want?