Fear , money and other illusions

For a very long time all exchanges between people were handled through barter. It was inconvenient and required a near-philosophical ability to determine equivalences between the non-equivalent (how many of your hogs for one barrel of my wine?) - but at least everyone ended up with physical goods and tangible value.

And even, much later, when money was invented, the face value of a coin was supposed to be identical to the value of the metal composed of it - hence the use of gold for British sovereigns, French louis d'or, etc. - and even banknotes were nominally linked to gold. A hundred years ago you could , in theory, have walked into the Federal Reserve Bank brandishing a $10 bill and insisted on ten dollars' worth of precious metal - until, in the 1920s, the world's major currencies were taken off the gold standard.

So now the value definition of money has become circular, or rather notional: you can only spend your dollars, or pounds, or euros to the extent that other people believe that they can use them. And this even more so now that we no longer deal with bills and coins very much; our money is electronic; it's numbers on a screen, digital impulses transferred across wires.

It's all strangely Buddhist for the product of such a ruthlessly materialist and competitive culture: we've created a world in which wealth is quite literally Maya, illusion. What happens to "my money" when the bank switches off its computers? Where is "my money" after I've pressed "send" but before it reaches "your account" and becomes "your money"? We've come a very long way from hogs and barrels of wine.

The problem with illusions is that they require lots of people to share them in order not to be exposed as such - the message of Hans Christian Andersen's "The Emperor's New Clothes". Specifically, to share in the illusion of wealth people need faith - once they cease to believe that those numbers on a screen can be converted into hogs and barrels of wine, they panic. Primitive crowd-level emotions take over, and supposedly sophisticated investors start to behave like animals trapped in a burning building, running hither and thither searching for the way out.

Yet of course on a deeper level electronic money and virtual wealth are no more and no less illusory than the hogs and barrels of wine they're supposed to stand for - everything we do and everything we are requires a calm and sustained faith, to be renewed every day. The greed and panic that we constantly see in the workings of the financial markets are fundamentally manifestations of lack of faith - in the capacity of the physical universe to provide for our needs, and that enough is really enough.

It's time we created a world order where the mood-swings of a tiny group of people in New York, London, Tokyo, Paris and Frankfurt were no longer able to up-end the lives and livelihoods of millions of innocent people.