Genius of Money Post 1

Chapter 5 

John Bloom begins Chapter 5 with a commentary on Adam Smith, an eighteenth century economist and philosopher famous for creating the economic theory known as the “invisible hand”. This idea encompasses the notion of social benefits as a result of individual actions. “Self interest” on the other hand may lead to negative results when a condition he calls “never enoughness” is present. This is an unhealthy state where the individual or single corporation excludes the interest of others for “the benefit of a few”.  Bloom notes that this critique isn’t the main focus of his commentary before proceeding to discuss a speech given by Bill Gates. 

During a speech Gates gave in Davos, he referred to Adam Smith’s teachings with regard to breakthroughs in technology. Gates stated, “the genius of capitalism lies in its ability to make self-interest serve the wider interest”. In other words, by creating a free market and using the genius of money, individuals are able to work and be rewarded for their work while contributing to the overall economy or society. With regard to technology, an individual’s creation will improve the lives of the wider community and that individual will in turn receive recognition for that contribution. 

Chapter 13

Chapter 13 begins by discussing the genius behind inventing money. Before its creation, there was no way to value an item or service except through bartering. Now, money influences the thoughts and actions of everyone since it our main driver of value. 

Bloom discusses an instance when J.S.G Boogs, a contemporary artist, had no money to pay for a meal so he drew a $20 bill on a napkin in exchange. This creates an interesting situation where if the restaurant accepts this drawing, they must return Boogs’ change in cash. Boogs has not only used his drawings for food but also rent and clothing which questions our notion of what money actually is. Technically paper money is just a drawing that we accept to have a certain value just as the digits within our bank account are accepted to have another value. Boogs questioned the notion of money by “inverting the system on itself” and we should also question our understanding of money and the decisions we make to gain more of it.