Michael Perelman quoted Nicholas Dunbar:
Dunbar, Nicholas. 2000. Inventing Money: The Story of Long-Term
Capital Management
and the Legends Behind It (NY: Wiley).
46: "The most important possession people had was livestock, but
animals have a
unique property they breed. If you borrow a herd of cattle for a
year, you probably
will end up with more than you started with. The number of calves
represents the
time value of cows."
46: "In the first cities of the ancient Middle East, where money
was invented,
interest was devised according to the same principle. Indeed, the
Sumerian lord for
interest was the same as the word for calves. This is also the
case in Greek. Over
time, money breeds money, and this principle was established as
early as 5000 years
ago. By the time of Hammurabi, 2000 years later, Babylonian
children were even
being set problems on calculating interest in school!"
The accumulation of cattle, though, was to a significant degree an
end in itself and not simply a means to other rational ends.
"Money" originates as a store of value, not as a medium of exchange.
The "exchanges" for which it is initially used are as an equivalent
in lex talionis systems of justice ("blood money") and in marriage
("bride price") (see Philip Grierson's The Origins of Money).
The association with avarice, sadistic violence and fertility is
consistent with a psychoanalytic interpretation of money and its
origins, i.e. with the interpretation of money as a "symbol" of
instinctive interests made unconscious by the mechanisms of defence
employed to escape the anxiety provoked by their direct pursuit.
There is a theory of money based on this interpretation: Keynes's.
It underpins the passages I recently quoted, e.g.
"dangerous human proclivities can be canalised into comparatively
harmless channels by the existence of opportunities for money-making
and private wealth, which, if they cannot be satisfied in this way,
may find their outlet in cruelty, the reckless pursuit of personal
power and authority, and other forms of self-aggrandisement. It is
better that a man should tyrannise over his bank balance than over
his fellow-citizens; and whilst the former is sometimes denounced as
being but a means to the latter, sometimes at least it is an
alternative."
The summary account of this theory Keynes provides in his 1937
Quarterly Journal of Economics paper, "The General Theory of
Employment", emphasizes this aspect:
“Why should anyone outside a lunatic asylum wish to use money as a
store of wealth?
"Because, partly on reasonable and partly on instinctive
grounds, our desire to hold money as a store of wealth is a barometer
of the degree of our distrust of our own calculations and conventions
concerning the future. Even though this feeling about money is
itself conventional or instinctive, it operates, so to speak, at a
deeper level of our motivation. It takes charge at the moments when
the higher, more precarious conventions have weakened. The
possession of actual money lulls our disquietude; and the premium
which we require to make us part with money is the measure of the
degree of our disquietude”. (Collected Writings, vol. XIV, p. 116
Ted
