History of humankind includes section on economics

Sapiens: A Brief History of Humankind by Yuval Noah Harari; Translated from the Hebrew by the author, with the help of Haim Watsman and John Purcell,  Harper Collins, 2014
By Dorothea Shefer-Vanson

Dorothea Shefer-Vanson

Dorothea Shefer-Vanson

MEVASSERET ZION, Israel — First, kudos to the author for using the term ‘humankind’ rather than ‘mankind’ as used by Neil Armstrong when he stepped on the moon. Harari often uses ‘her’ and ‘she’ when referring to humans in general, and for that refusal to accede to stereotypical sexist usage he is to be congratulated.

Harari provides the reader with a stunning, all-encompassing birds-eye-view of the history of the world, displaying a breath-taking breadth of knowledge in any number of scientific and other areas while at the same time formulating his discourse in a language that is both accessible and peppered with humor – no easy task in a tome of this nature. In so doing he provides us with an overall perspective of human development and humankind’s place in the world in the past and the present.

Especially endearing are his throw-away asides and use of familiar and even irreverent language without ever descending to a level that is insulting to the reader’s intelligence, as well as inserting references to modern life when describing historical events. Thus, for example, in explaining the rationale for Captain Cook’s 18th century expedition to the Antipodes he considers whether it was intended for military or scientific purposes, then says “That’s like asking whether your petrol tank is half empty of half full. It was both.” This little departure from the dry academic tone gives the reader the  feeling that she is simply having a conversation with a knowledgeable friend or relative.

And the book abounds in similar examples, so that the bitter pill of abstract or abstruse factual knowledge is sweetened by a generous dose of humor and even irreverence.

In Part 3, The Unification of Humankind, Harari devotes a chapter to ‘The Scent of Money.’ Since it is impossible to review the book as a whole, I have chosen to focus on his treatment of economics as a seminal aspect of human development. Coins were minted and used as currency in ancient societies several millennia ago (Sumer, Rome, Judea, Greece, etc.) and money represented a crucial aspect of the transition from the barter system of the hunter-gatherer to the settled farming societies of the agricultural revolution. Nonetheless,  it did not constitute an important step in the development of modern society, Harari claims, asserting that it was a purely mental revolution, involving ‘the creation of a new inter-subjective reality that existed solely in people’s shared imagination.

Money does, however, enable people to ascribe a value to objects that previously could not be measured very easily. Harari points out that coins and banknotes are a rare form of money today, as more than 90 percent of all money exists only on computer servers, and most transactions are executed by electronic means. It is banks and financial institutions that enable these flows to take place, and behind Harari’s light-hearted account of the way money works lies a wealth (sorry about the pun) of complex economic theory and data.

In the segment entitled ‘How Does Money work?’ Harari points out that without trust the system would be unworkable. The concept of credit, which is based on trust, is the mechanism by which the economic system operates in the modern world, and it is only in the last five hundred years, the period during which the modern world emerged, that the economic system based on credit and trust, has developed.

Harari notes that trust was created in the course of a long and complex network of political, social and economic relations. When coins were first used they had a standardized weight and value, guaranteed as such by the ruler. This is not quite the case with modern paper money, which constitutes more of an i.o.u. whose value is guaranteed by the central bank.  Without trust in the power of the central financial authority the system wouldn’t work.  This concept enabled the Roman Empire to rule many different and distant lands, and in modern times allows different countries to trade with one another, and large political entities to function financially.

Money is based on two universal principles: universal convertibility and universal trust.  While this system has benefits it also serves to undermine local traditions, intimate relations and human values, replacing them with the laws of supply and demand. The trust system relates not to individuals but to money itself. Notwithstanding,  determined armed groups or nations can overthrow the rule of money and impose a different system of values (e.g., Marxism, Islam). The desire to rule others gave rise to imperial domination both in ancient Rome and in sixteenth century Europe.  But it is commerce, empire and universal religions that have led to the ‘global village’ we live in today (Chapter 13, ‘The Secret of Success’). The modern world of the last five hundred years is the product of intellectual curiosity (as exemplified by the Scientific Revolution), geographical exploration (Imperial Expansion) and their attendants – greed, or more nicely put, the profit motive.

In Chapter 16, ‘The Capitalist Creed,’ Harari uses a simple analogy to illustrate the role played by credit (and therefore trust) in the economic system, with the end-product being the financial credit that oils the wheels of the economy and enables economic progress. The idea of progress, of scientific discovery, has enabled our world to move forward at an astonishing pace in the last 500 years. This has brought people to place increasing trust in the future rather than looking back to and longing for an idealized past. Despite bumps in the road and setbacks along the way, there is ever-growing credit and economic growth, bringing greater prosperity to more and more people all over the world.

Capitalism involves the investment of money, goods and resources in production. Harari considers this relatively recent concept to be a new religion, one that is supported by governments and financial institutions. Keeping the economy growing has become the sine qua non of ruling bodies, and even led to wars in the nineteenth century in order to sustain the preservation of imperial (and hence economic) interests). Politics and economics are today inextricably interconnected, and a country’s credit rating is at least as important for its economic wellbeing as its natural resources.

However, belief in the free market can lead to the cynical exploitation of human beings, as it does of animals today. Harari gives all-too-graphic accounts of the way animals are treated as part of the process of food production. Human slavery, which was widespread in the past, was eventually overcome on ethical, not economic, grounds.

In Chapter 17, ‘The Wheels of Industry,’  Harari tackles the problem of the creation and conversion of energy. This was originally provided by muscle power, whether of humans or animals, until in the nineteenth century steam power, and later electricity, were discovered and harnessed, facilitating the Industrial Revolution that has made our modern world. Other forms of energy have emerged – oil, nuclear power and solar power – and there may well be others as yet unknown and untapped. As Harari points out, people invented and imagined many things, but no one foresaw the internet and the way it would revolutionise our lives.

All this progress has brought us to a point where a great many things are being produced and the main function of many industries is to produce more and more. In order to create a market for their goods an entire industry of advertising and marketing has arisen, with its ideology of consumerism, or what Harari calls ‘The Age of Shopping.’ We are all victims or subjects of this ideology and resist its wiles at our peril. Harari defines this as another religion, and the first one whose followers actually do what they are asked to do. “How do we know that we’ll really get paradise in return?” he asks, and answers: “We’ve seen it on television.”

According to Harari, the modern world is one of unparalleled peace and prosperity, especially in the last seven decades,  but over the last two centuries it has led to the collapse of family and community. Today there is far greater emphasis on the individual, and what has emerged alongside this approach are imagined communities (Facebook, for example). But that is more a sociological and psychological  issue than an economic one, and it is to this that Harari devotes the last portion of his book.

*
Shefer-Vanson is an author and freelance writer based in the Jerusalem suburb of Mevasseret Zion, Israel.  She may be reached via [email protected]

 

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