Made in Taiwan:
Most people in the world know virtually nothing about Taiwan. It is an extraordinary country: politically treacherous, as it claims independence from the People’s Republic of China, and physically vulnerable, as it is susceptible to earthquakes. Unwittingly, we are more dependent today on Taiwan than on Arab oil. Around 60 per cent of the world’s semiconductors are produced in Taiwan; this is a far greater market share of an essential component of the technology industry than Saudi Arabia’s share of our global energy needs.
A precarious relationship
Interdependence is perhaps the most important property of money.
Money, finance and trade have created an unprecedented level of interdependence between individuals and across nations. We now depend on others whom we may not know or like and, because our interests are mutual and overlap, we have an incentive to cooperate with them, however impersonally.
The interdependence created by money has three effects: it forces us to be moral, it increases our resources, and it creates a vulnerability to fear. Money is valueless unless it is recognised and accepted by others. It is a social contract, perhaps the social contract of modern societies. The division of labour, systems of finance and trade – complex, detailed, relationships between people – depend on money. Through their efforts on our productivity, they free us from scarcity. Throughout the evolution of human organisation, from family-based clans of hunter-gatherers to contemporary market democracies, caring for others requires a surplus of resources: some form of saving. A surplus must exist at an individual or collective level to provide for those who are in need or unlucky. The anthropological origins of money and credit are acts of sharing and care. Finance provides a more formal substitute for many of the functions that were provided by extended families and clans in the past, which is equally essential in large and complex societies.
The theme of interdependence is discussed in more detail in Eric Lonergan’s book, Money (Acumen Publishing)