This week I read the two required readings from The Social Life of Money by Nigel Dodd and Paper Promises by Phillip Coggan as well as the first two chapters of Benjamin Cohen’s The Geography of Money. The required readings give a very interesting account of the history of money as a concept in society and I was especially interested in the various accounts of money’s origins given by Dodd. The origin story — as an evolution from a bartering system — that I was aware of and was taught in my first year Introduction to Economics class is explored in detail by Dodd and also revealed to be a myth. He declares that there is no empirical evidence to suggest there was ever a widespread bartering system from which a monetary system could evolve and yet this origin myth remains widely regarded as fact — by economists, by policy makers, and by the general public (including Coggan who provides this origin story in Paper Promises). I can understand why, it seems obvious that at some point in the past there was no money and a point in the past where people exchanged things and a point in the past where they decided to make trading things easier. The story is too good and seems like a logical trajectory for the evolution of paper money and the system we use today. By contrast, I found the rival theory explained by Dodd — an evolution from a tribute system, an origin as debt rather than as a means to exchange — less satisfying. If money originated as a fine that needed to be paid, where did the first person to be fined get the money to pay the fine? If you are in the habit of sacrificing sheep to please the Gods how do you get to the point where you instead give the Gods a piece of paper representing the dead sheep? Nevertheless, I appreciated this perspective, and the other perspectives Dodd elaborates on in the chapter. His ultimate point seems to be that a clear origin story is not possible. Money is so dominant in society, serves many purposes and its social role is so complex that we must take into account all possible stories in order to think about and understand money. I found this chapter very interesting and am eager to read more of The Social Life of Money over the coming weeks.
One of the recommended readings this week was The Geography of Money, a 1998 exploration of the role money plays in international relations. As I am studying International Relations I found this reading very interesting and it gave me some ideas for what I would like to write about for our essay. Cohen argues that while money was formerly under the control of nation states and an important component of state power, the situation has changed and now markets and other forces have a huge impact on monetary policy — a change that “generates mounting tensions and insecurities — potential threats to global stability as well as promising opportunities for cooperation.” Cohen states that the adoption of a common European currency challenges the traditional One Nation/One Money narrative and is a prime example of the changing nature of money. According to Cohen, money is a “potent political symbol to promote a sense of national identity” and I would like to explore both the political role of the euro — how it has affected integration and a sense of a European identity — and the economic role — what was the economic logic in adopting a common currency, who has benefited and who has not. This is just initial reflections but I hope to some more reading on this topic in the next few weeks and decide on a essay question.
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