macroeconomics Part I: Mnemosyne’s Revenge
It is human nature to take things for granted. Our ancient ancestors created fantastical myths to explain the rising of the sun, but could there have been any doubt that the sun would always rise the next day? Te reigns of ancient pharaohs were considered as much a part of life as life itself. in
Advances technology,
too, are taken for granted. For the most part we’re addicted to our mobile devices but have little knowledge of how or why they function. It works and that’s all that matters. Te same may be said of money. Tere’s product, a want and a price. Pay up and it’s yours. What more there to know?
is
originate from Moneta, an ancient name associated with two different goddesses. Etymologists attribute the derivation of the word money to Juno Moneta, wife of the all-powerful Jupiter. Equating money and mythical power would make sense for an etymologist. However, the other goddess’ name for whom credit is sometimes given
currency-money its value.
Currency-money is the means to extend barter1
over time and distance. A barter
transaction requires two parties at the same time in the same place. However, there are many transactions for which that’s not possible. If a laborer helps sow a field in exchange for a share of the crop, the work is provided first and the
counterparty
makes good at harvest time. In other words, the barter remains incomplete. A written agreement preserves
the Figure 1: Mnemosyne, goddess of memory
Stop for a moment and think about what has occurred in a purchase. An exchange has taken place; a trade. In the case of cash, the product has been traded for paper, which doesn’t make a whole lot of sense. It’s even more absurd if you had used a plastic card. Although totally cool but no less irrational would be if you had used your mobile device. Te word money is said to have
There’s no single term to express both ancient meanings of currency and money together: flowing-memory
is Mnemosyne, goddess of memory.
Tis should make more sense to an economist. Te term currency also has ancient origins having descended from the Latin ‘currere’, to run, as does a river. It’s too bad there’s no single term to express both ancient meanings of currency and money together: flowing- memory. For this is precisely what gives
memory of the barter agreement; a written agreement spans time. While waiting for the harvest, the laborer who has since gone on to another job could conceivably exchange
written note for something else2
the ; a
written agreement spans
distance. Te new bearer
of the note may now claim the original counterparty’s promise. Te memory of the transaction is preserved and its value circulates through the successive transactions. Te written note is currency.
Expansion of global trade demanded an increased use
of paper notes. FX TRADER MAGAZINE April - June 2016 43
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