A Tale of Three Cavemen and The First “Currency”

Continueing on with the Meekonomics Project this is part 2 of Chapter One; A Brief History of Money

Once upon a time there was a caveman named Zork.  Zork was very good at clubbing rabbits as they ran out of the thicket of bushes near his cave.  He would sit for hours perched on a rock just above where the rabbits lived waiting for one of them to emerge and when they did; “BAM!” Zork’s life was very boring, some days he would grow very tired waiting for the rabbits to come out and would instead go off in search of blueberries to satisfy his hunger.  Zork liked blueberries but he was colour blind and not very good at finding them.  I guess you could say to Zork they were really just berries.  Every so often he would eat some that tasted funny and get sick.

One day Zork met Kronk.  Kronk was very good at finding blueberries and for some reason he never got sick on them but he very rarely ate meat because he just wasn’t very good with a club.  Zork and Kronk made a deal.  If Kronk would give Zork a basket of blueberries Zork would club a rabbit for him.  And thus was the first transaction of goods ever made.  Of course Kronk was a terrible basket weaver but we’ll get to that in a minute.

Pre-historic trade was based on the exchange of goods of equal value.  Long before Adam Smith observed the division of labour people were specializing in what they do best and trading their skill and expertise in one area for the results of someone else’s.  Pre-historic trade made for a better society as a whole but no one individual really profited in this scenario.  As a result of their little deal Zork got
sick less often and Kronk was able to get stronger by the addition of more protein in his diet; who’s to say one profited more that then other?

It wasn’t until Kronk realized that his other neighbour Urg was a particularly skilled basket weaver who had trouble keeping warm at night that anything close to profit entered into the equation.  Kronk made a separate deal with Urg.  For every rabbit skin I give you, you make me a basket.  This allowed Kronk to deliver more berries to Zork for which Zork gave him more rabbits which he ate and then turned into more skins for Urg.  By working both sides of the transaction Kronk was profiting more from the arrangement than either Zork or Urg and the rabbit skin which neither Kronk, nor Zork had much use for became a kind of currency to further facilitate trade in other goods.

Essentially that’s what currency was in the beginning.   A raw material that could be passed easily through a number of individuals from its source to an end user who may be two, three or several hundred people removed from the person who first produced it.  By slowing down the flow of that “currency” one individual could profit by demanding more of what they produced before allowing it to continue on or speed it up by requiring less.

In order for a commodity to gain the status of currency it must be rare, uniquely useful and small enough to be stored and transported
over large distances.  Perhaps the first raw material to be traded in this way was a black volcanic glass known as Obsidian.

Obsidian was used by stone-age cultures and early civilization beginning at around the end of the last Ice-Age.  It was desirable before the advent of metal because it could be fractured into a sharp edge or point and used as a blade both in the household or as a weapon.
The earliest Obsidian mines date back to approximately 14,000 BC and are to be found in South East and Central Turkey with traces of the material showing up all along trade routes throughout the middle-east.  By 6500 BC it is believed that Obsidian from central Turkey had found its way over land all the way to Egypt, had crossed the Mediterranean to Cyprus and travelled down the Euphrates and Tigris Rivers to the Persian Gulf. It`s no coincidence that this is also the region known as the Fertile Crescent which gave rise to agriculture and some of the earliest city states.  Obsidian blades would have been an essential tool for early farmers both for harvesting crops and fending off wild animals.

Although Obsidian is still used today in surgical tools due to its superior hardness and ability to hold an edge better than steel, it`s
ability to be traded as currency collapsed as other materials were discovered which were more abundant and easier to use.  Obsidian lost one of the three ingredients required to achieve the status of currency in the pre-historic world, its uniqueness and thus became vulnerable to advances in technology.  Had it not been for the discovery of another mineral necessary for the expansion of agriculture the entire economy of the Fertile Crescent may well have been destroyed before it really got going; that new mineral was salt.

My next installment will walk through the growth and dominance of salt cartels from ancient Egypt through the middle ages right up to the Hapsburg Dynasty of Central Europe.

Meekonomics; Chapter One; A Brief History of Money, Part One

You’re just a number.

Despite what the advertising says, when you walk into a bank  today, you’re no longer human you’re nothing more than a number on a screen.

Psychologists and self help books tell us that we are more than that.  That our value is made up of our life experience, our personalities, our innate or learned skills, but when you walk into a bank, nothing matters but the number on that screen.  How that number is arrived at may have something to do with all those things but in the end it all comes down to that number.  To a banker your number means everything.  Your number determines where you get to live, what you get to eat, the car you get to drive, and the level of education you get to give your children.  To our children our number therefore has a huge impact on the things they get to experience, the formation of their personalities, and how their skills, both innate and learned get developed.  And so it goes, from generation to generation.

Numbers are easily manipulated.  They can be placed in various configurations, sorted, separated and combined, valued and devalued and they never complain about it.  Why; because numbers aren’t people.

Our society has reduced each and every person on this planet to a number on computer screen.  It’s degrading, dehumanizing and completely contrary to our psychological make-up.    By assigning value to human lives in this way those with the money get to make decisions that affect the lives of each and every other human being on earth without so much as a second thought.  We used to call it trickle-down economics and convinced ourselves that it was a good thing but with over a billion people living on less than $1 per day it’s now clear the that what was once a steady stream of money moving about the world has slowed not just to a trickle but in many of the most desperate places, it has stopped altogether.

The unequal way in which money is distributed throughout the world is staggering.  According to published statistics as recently as 2003, the top 1 percent of Americans controlled nearly 40% of all the wealth.[1]  In real numbers that is an annual income of
approximately $12.5 million dollars.  On a global scale, the average American household, who in 2003 had an annual income of $62,000, placed within the top one percent of the entire world.  We may not think in those terms here at home in the west but we are not only wealthy, we are rich beyond the wildest dreams of more than half the world and as the population continues to increase the gap is only going to widen.

As I will show in the next few pages the way in which that has happened has as much to do with the way we track and report money as it has to do with any real value we may create. In prehistoric times wealth had to do with physical possessions, the number of sheep in a heard or the size of your field. In those days everyone was on relatively equal footing because a man could only accumulate what he
himself could control.  As societies moved from trading those physical possessions, I’ll give you one of my sheep for that bushel of wheat, into the invention of currency it became easier to transport money but for the most part it still had to be tied to a physical possession, this piece of gold represents my sheep, that peace of gold represents your wheat, etc.  So long as wealth was tied to physical possessions even though it was easier for some to transfer ownership than others you were still limited to accumulating only what you could personally control.  In the last century, as governments have moved away from the so called “Gold Standard” money itself has been released from any connection to physical possessions and now flows freely.

It used to be that the controlling of assets led to the control of money, now money itself has become the most freely traded asset on
earth.  Currencies are bought and sold, speculated on and transferred around the globe in the blink of an eye and at the click of a mouse. Their value goes up and down effecting the lives and lively hoods of individuals communities and even entire countries based not on the tangible price of goods that are produced or the amount of gold reserves a country my hold but on far more subjective criteria that have little to do with true economics and more to do with the political climate.

If we are to regain an equitable distribution of money we need to remember one fundamental truth that has been lost in our world-wide frenzy to accumulate wealth.  At the end of the day money is just a number on a screen, it was invented to represent
value but it has no value on its own!  To understand true value, and true cost we have to start by rolling back the clock a few millennia and take a look at the early dawn of civilization and the invention of trade.

Meekonomics – How to Inherit The Earth and Live Life to The Fullest Under God’s Economy

I realize that it is an act of sheer hubris to attempt to write a book called Meekonomics.  The meek don’t write books do they?  Especially Mennonite kids from Southern Ontario with no formal education in either economics or theology.

This book is the result of 6 years of prayer, research and reflection on two things that have driven me for almost as long as I can remember; God and Money.

Although I have always held a strong faith my relationship with money has been an extreme roller-coaster from the highest of highs to the lowest of lows.  I’m an entrepreneur.  I started my first business at the age of the age of 10; I had an opportunity to become a millionaire before my 26th birthday only to fall victim to an unscrupulous fraudster and ended up bankrupt at 33.

My drive to understand money and reconcile economics with my faith started to take root in the fall of 2007 not long after I first filed for bankruptcy.  What I soon realized is that reconciliation of the God and Money issue is not just a personal question, although personal finance is a big part of it, it’s really required on both a micro and macro-economic scale if our society is to survive.

Call it what you will; estate or retirement planning, investments, pension plans etc.  It all comes down to the storing up of treasures on earth just as Jesus warned us not to do.

Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.

The eye is the lamp of the body. If your eyes are good, your whole body will be full of light. But if your eyes are bad, your whole body will be full of darkness. If then the light within you is darkness, how great is that darkness!

No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money. [Matthew 6:19-24]

Meekonomics is a new way of looking at our relationship with God and Money.  As Jesus said, the meek shall inherit the earth but in God’s economy that means something completely different than what many people might think.  And if we don’t fundamentally change the way we steward the earth there won’t be anything left to inherit anyway.

I have a confession to make.

The more research I put in to this idea the more I realized that my relationship with money was the result of a constant striving to serve two masters and has led to a myriad of sin.  I’m not ashamed to admit it or use such strong words.  Sin is sin.  In my drive for money I have lied, cheated, committed fraud and outright theft.  Of course I always managed to convince myself that I was just borrowing, but borrowing without permission is theft, even if you pay it back before anyone notices.  So the hours I have spent in research and writing, and the hours I continue to spend in this pursuit are in some way my penance for the people I’ve hurt and the damage I have done in my relentless pursuit of money.

It was when I began to realize just how sinful my love of money had made me that I found in Proverbs the Pray of Agur;

O God, I beg of you two favours before I die.
First, help me never to tell a lie.
Second, give me neither poverty nor riches!
Give me just enough to satisfy my needs.
For if I grow rich, I may deny you and say, “Who is the Lord?”
And if I am too poor, I may steal and thus insult God’s holy name. [Proverbs 30:7-9]

This has become my mantra.  It’s taped to the inside of my wallet so I can see it every time I reached for one of my many credit cards.  I’ve had to replace that piece of paper a few times, it’s gotten ripped and beaten up pretty badly but as I’ve said that prayer almost every day for the last 6 years, it’s changed me.  I no longer view money as a right, I don’t even view it as a privilege, or a tool; I view it as a responsibility. Repeating the prayer of Agur, requesting neither poverty nor riches, is really a prayer that God in his infinite grace and wisdom will not give me more than I can handle.  I’ve been on the verge of riches and I squandered it, I’ve been in the depths of poverty and I stole in order to achieve those things I thought were my right, I clearly cannot be trusted, not without the grace of God at least.

So as I journey through my relationship with God and Money I am trying to look at the world of economics through the rubric of three broad perspectives.

First; I want to explore a theological study of the issue from an Anabaptist perspective and look at how it has related to traditional economic theories throughout history.  In the 16th century a group of Christian leaders rebelled against their own religion calling for a total separation of church and state, a rejection of violence in all its forms and a way of life that respected the economic realities of stewardship and community.  When most people think of Anabaptists today they think of the Amish and Quakers clinging to a way of life that is separate from western society and rejects modern conveniences but Anabaptists are so much more than that.  I will explore how the Anabaptist faith led to the invention of community based banking such as Credit Unions and Mutual Insurance as a way of sharing risk and making the protection of personal property the responsibility of the entire community.

Second; I want to undertake an in-depth study of the so-called market economy and capitalism, how it started, what it has become and how it is radically different from what the first capitalists ever intended.  It has been said that history is written by the victors.  That is just as true for the history of conflict and war as it is for the history of development and wealth.  But what if we told history from the perspective of the vanquished?  What if we looked at wealth and development from the perspective of the poor?  It’s no secret that free market capitalism has emerged as the dominant form of economics the world over, but what does that really mean and what does it say about our society as a whole?  What has the free market done to isolated communities?  What has it done to one industry towns?  And was does it do to individuals?

Third; I want to look at economics from an ecological perspective.  As I mentioned earlier there isn’t much point in any of this if there isn’t much of an earth left to inherit.  The Iroquois of North America used to make decisions for their communities based on the impact it would have to the seventh generation.  Today, driven by forces of the market and the need for immediate profit, decisions are made with no regard at all for future generations, indeed very little consideration is given beyond the next quarterly earnings report.  This has put an unbelievable strain on the balance of God’s very creation and it begins with a misinterpretation of man’s role as spelled out in Genesis.

Lastly; I want to tie it all together in a clear and coherent plan for life in accordance with the teaching of Jesus and God’s will for the stewardship of our assets, our planet and the protection of the weakest members of our communities.  This must be looked at from both a financial and spiritual perspective so that we may all live a life of abundance secure in the grace of God and loving support of our communities.

As fate would have it, as I was formulating this introduction I glanced at my smart phone and saw that Rick Warren, author of The Purpose Driven Life and founder of Saddleback Church in Lake Forest, California had posted his economic theory through on twitter.

“Capitalism: What’s mine is mine & I Keep it.  Socialism: What’s yours is mine & I can take it.  Bible: It’s all God’s and I share it.” (@RickWarren)

Unbeknownst to him in less than 140 characters Mr. Warren created the perfect definition of Meekonomics.  With that in mind I’m ready to dive in to what I hope and pray will be as eye-opening and life changing for you, my readers and it was and continues to be for me in researching and writing it.