• If the global pie stayed the same size, there
was no margin for credit. Credit is the
difference between today’s pie and
tomorrow’s pie. If the pie stays the same,
why extend credit?
• People seldom wanted to extend much credit
because they didn’t trust that the future
would be better than the present.
• Business looked like a zero-sum game.
• You could cut the pie in many different ways,
but it never got bigger.
• That’s why many cultures concluded that
making bundles of money was sinful.
• It was lose-lose.
– Because credit was limited, people had troubled
financing new businesses.
– Because there were few new businesses, the
economy did not grow.
– Because it did not grow, people assumed it never
• The expectation of stagnation fulfilled itself.
• All this depends, however, on the rich using
their profits to open new factories and hire
new employees, rather than wasting them on
• A crucial part of the modern capitalist
economy was the emergence of a new ethic,
according to which profits ought to be
reinvested in production.
• That’s why capitalism is called “capitalism”.
• Money isn’t a material reality – it is a
• Money is a system of mutual trust, and not
just any system of mutual trust: money is the
most universal and most efficient system of
mutual trust ever devised.
• What created this trust was a very complex
and long-term network of political, social and
• Whereas religion asks us to believe in
something, money asks us to believe that
other people believe in something.
• Money is the only trust system created by
humans that can bridge almost any cultural
gap, and that does not discriminate on the
basis of religion, gender, race, age or sexual
• Thanks to money, even people who don’t
know each other and don’t trust each other
can nevertheless cooperate effectively.
• When everything is convertible (with money),
and when trust depends on anonymous coins
and cowry shells, it corrodes local traditions,
intimate relations and human values,
replacing them with the cold laws of supply
• Money has always tried to break through
these barriers, like water seeping through
cracks in a dam.
• For although money builds universal trust
between strangers, this trust is invested not
in humans, communities or sacred values, but
in money itself.
• As money brings down the dams of
community, religion and state, the world is in
danger of becoming one big and rather
• People rely on money to facilitate
cooperation with strangers, but they’re
afraid it will corrupt human values and
• Capitalism distinguishes “capital” from mere
– Capital consists of money, goods and resources
that are invested in production.
– Wealth, on the other hand, is buried in the
ground or wasted on unproductive activities.
• In the modern era, the nobility has been
overtaken by new elite whose members are
true believers in the capitalist creed.