Money is a token of cooperation: the biology of indirect exchanges

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Author: Jose Maanmieli


Abstract: I propose a clear definition of money, as opposed to credit, by elaborating on the distinction between the biological concepts of cooperation and altruism. I argue that these aspects of animal sociality are often confused because they are evaluated from an anthropocentric perspective. Ecologically speaking, the function of a monetary token is to mediate interactions that are more constructive than reciprocal altruism. This focus on proximate mechanisms explains the challenges typically encountered by monetary theorists, whose conflicting views emphasise utility versus symbolism. The invention of Bitcoin provides empirical support. Indeed, the value of bitcoins does not come from any intrinsic utility nor does it come from an institution. This form of digital money has simply emerged on the internet, a social environment akin to the ecological environment in which trade has evolved. Like Bitcoin and other cryptocurrencies, money is naturally created by humans as a store of value for indirect exchanges. Its cooperative potential is then seized by processes of cultural group selection that transform money into credit.

 

Keywords: game theory, evolutionary social psychology, economic anthropology, definition of morality, social evolution, Stag Hunt, history of money

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