What is money? If you think you know the answer, then you may not have thought hard enough about it, a problem that kings and commoners alike have shared throughout history.
The Micronesian residents of the island of Yap, long a case study in the history of money, reckon currency by giant stones that, even if sunk in the ocean and therefore inaccessible, nonetheless have value. Their system matches the symbolic abstraction of money with a concrete basis for it. However, writes investor/economist Martin in this improbably lively account, that concreteness no longer underlies our modern economy: “The vast majority of our national money—around 90 percent in the US, for example, and 97 percent in the UK—has no physical existence at all.” So is money merely symbolic? By one measure, perhaps. But Martin seeks a deeper understanding, relating money especially to power: If on one hand it served as an instrument of rule for sovereigns, it also reined in those sovereigns as something even mightier than they. By that light, as one medieval philosopher formulated it, money “is not the property of the sovereign but of the entire community that uses it.” Martin expands on this provocative idea, suggesting that money is a system for allocating economic risk “by making a simultaneous promise of stability and freedom.” All this talk can get quite heady, and that's not to mention the ancient Chinese proverb that “the fish is the last to know water”—i.e., those of us who use money are so deeply steeped in it that it’s hard to think about, let alone answer the more important question: How much power should money have to govern our lives?
Refreshingly free of jargon and long on ideas—including the thought that if it’s money that got us into our current mess, it’s money that can get us out of it.