Money’s allure


Whoever created Pokémon cards was a strange genius. He identified the necessary properties of money and created his very own printing press. The cards can be used to play a board game, but in practice they are just collected by children, and are a form of private money. I became aware of this when my daughter informed me that children exchange food at lunchtime, or toys, for Pokémon cards.

If we are honest, we can relate to children’s vulnerability to the peculiar allure of valuable pieces of paper. A freshly printed note can have a similar effect: the quiet pleasure of the ATM.



Conquistadors and Indians

Money’s attraction is hard to pin down. It is not aesthetic, and cannot be explained just by money’s usefulness. It is surely a consequence of all of money’s properties, but also something independent.

The various forms of freedom that money make possible can be seen as less obvious forms of the insurance that money provides. But the allure of money runs deeper than this. Monetary value lies not in usefulness but in scarcity. We experience awe when we encounter rarity, even useless or valueless rare things. Perhaps evolution has taught us that something useless today could be useful tomorrow, so a rare object is like a patented technology whose time is yet to come; after all, human beings will even preserve rare bacteria. A rare object has option value. The more unique it is, the higher the option value.

Religion has formalised this instinctive attraction to rare and valuable things, and very often creatively developed and used it. Émile Durkheim defined religion using the distinction between the sacred and the profane. Sacred objects or texts are typically rare and often precious. Places of worship are often beautiful. The use of blessings in religious contexts to render the commonplace unique is an inspired device. Holy water is the ultimate transformation of something plentiful and costless into something rare and special.

The theme of time and money is discussed in more detail in Money (Acumen Publishing)

Also recommended:

Becker G.S., Murphy K.M. and Werning I., “Status, lotteries and inequality”. May 2000.

Stephen E.G. Lea and Webley P. “Money as tool, money as drug: the biological psychology of a strong incentive”. Behavioral and Brain Sciences (2006), 29:2:161-209 Cambridge University Press

About The Author

Eric Lonergan is a macro hedge fund manager, economist, and writer. His most recent book is Supercharge Me, co-authored with Corinne Sawers. He is also author of the international bestseller, Angrynomics, co-written with Mark Blyth, and published by Agenda. It was listed on the Financial Times must reads for Summer 2020. Prior to Angrynomics, he has written Money (2nd ed) published by Routledge. He has written for Foreign AffairsThe Financial Times, and The Economist. He also advises governments and policymakers. He first advocated expanding the tools of central banks to including cash transfers to households in the Financial Times in 2002. In December 2008, he advocated the policy as the most efficient way out of recession post-financial crisis, contributing to a growing debate over the need for ‘helicopter money’.

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